Chris Huhne dims his nuclear doubts?

From The Sunday Times May 30, 2010


Energy minister dims his nuclear doubtsJonathan Oliver


Chris Huhne said rising gas and oil prices would make nuclear power more attractive

CHRIS HUHNE, the Liberal Democrat energy secretary, last night signalled a softening of his opposition to nuclear power, insisting he was no “ideological ayatollah”.

Huhne, who once described nuclear power as a “failed” technology, claimed that plants would be built despite the government’s refusal to subsidise the industry.

“It is very clear from the coalition agreement that there will be a new generation of nuclear power,” he said in an interview with The Sunday Times.

Last year the government identified 10 sites where nuclear reactors could be built.

The arrival of Huhne, the most radical of the five Lib Dem cabinet ministers, at the Department of Energy and Climate Change had sparked concern that the entire civil nuclear programme might be put on hold. But he insisted that despite budgetary restrictions there was an appetite to build plants.

“The investors who are most interested in this issue accept the situation where there will be no subsidy,” he said.

He said the likely rise in gas and oil prices over the next few years would make nuclear more attractive to private finance. “They are looking at the likely rise in the carbon price. That will provide an incentive to all low-carbon and zero-carbon forms of energy.”

Huhne, who worked in the City before entering politics, added: “I am not an ideological ayatollah against nuclear power per se.

“I am simply a sceptical economist about the record of nuclear power on delivering on time and to budget in a way that can make returns for investors.”

Huhne’s background as an economist means that he is unafraid of entering the debate on capital gains tax. He delivered a blunt warning to the Tory malcontents who are calling for planned capital gains tax (CGT) rises to be watered down.

Taunting the backbench rebel leaders, he said: “What I don’t see in the debate from David Davis and John Redwood is an awareness of the constraints that we’re facing and the sense of competing priorities. It is terribly easy to run a single-issue campaign saying we don’t like this but that doesn’t take account of the world of government.”

That last remark will particularly irritate Davis and Redwood, who were both ministers in the previous Tory government.

The row over CGT is turning into the first big test of coalition unity. During the pre-deal negotiations, the Lib Dems argued successfully for an increase in the levy, now 18%, to nearer the higher-rate income tax level of 40%.

The extra money raised is to be used to help fund the Lib Dems’ key goal of cutting the burden on the low paid by raising the starting income tax threshold.

However, many Tories fear that increasing CGT will hit people who plan to sell shares or second homes to fund their retirement.

Huhne said any watering-down of the pledge on increasing CGT would seriously undermine the coalition deal.

“One of the things people might say is ‘I don’t like that’, so they pull at that little piece of string and you find that all the rest of the woolly jumper is unravelling,” he said. “You have to be very, very careful. If you move something, everything else changes.”

Huhne, a member of the four-man coalition negotiation team for the Lib Dems, reminded the Tory rebels that the party’s failure to win the election was the reason why they now needed to compromise.

“The coalition agreement is a good agreement,” he said. “You have to remember why it’s there — remember the context. We can’t take one bit of it and say we don’t like that.

“One thing I do think is missing from the debate on CGT is a reminder of what the strategy actually is. The strategy is to lift lower and middle income people out of income tax ... We all want to see people facing relatively low marginal rates of tax and obviously nobody wants to raise rates of tax if we can possibly help it.

“But the change that might be happening on CGT from 18% to 40% needs to be put in context of the sorts of marginal rates that low-income people are facing when they go from benefit into work.”

He pointed out that they often faced marginal rates of approaching 60% on their new earnings.

In another provocative remark targeted at the Tory right wing, he pointed out that Margaret Thatcher’s favourite cabinet minister had been an outspoken backer of Lib Dem tax policy. “One of our greatest supporters on raising the low-income threshold, who will be a pin-up to both John Redwood and David Davis, is Norman Tebbit,” said Huhne.

While the coalition has been described as an “austerity” or “hairshirt” government, the climate change secretary insisted nobody needed to cancel their bank holiday mini-breaks.

He said that the planned shift in aviation taxation to a “greener” per plane levy would not prompt the demise of the budget airlines. “My guess is airlines like Flybe, Ryanair and easyJet will have relatively little to fear,” he said.

However, he warned that other airlines, such as British Airways, which fly emptier jets, would be hard hit. “The flights which are frankly going to be hit hardest are the ones on scheduled routes which have very low load factors,” he said.

Huhne, although a committed environmentalist, insisted that motorists should not be alarmed by the new government. “We are in a time of transition,” he said. “We will be moving to an economy where pretty much everything you and I enjoy doing — even everything that Jeremy Clarkson enjoys doing — will still be able to be done but can be done in a different way.

“Look at the Tesla which is an electric car that does 0-60mph in four seconds.”

Of more immediate concern will be the furore surrounding David Laws, Huhne’s Lib Dem colleague, and his parliamentary expenses claims relating to his boyfriend’s flat.

Huhne said: “This obviously is an extremely regrettable situation. Clearly David did not set out to profit from the taxpayer; his claims were always low. This was about him protecting his privacy.

“He has an enormous talent and I hope we can look beyond this immediate issue. I hope the [standards] commissioner will see it in the round.”

Chilly wife

Chris Huhne revealed how his quest to cut his carbon footprint was frequently thwarted by his wife Vicky Pryce.

The energy secretary said his Greek-born spouse resisted his attempts to turn down the central heating in their draughty five-storey Georgian house in south London.

“Since my wife has Mediterranean blood, our tolerance for cold is slightly different,” he said. “Our London home is more difficult to heat than our Eastleigh home. It is problematic from the point of view of English Heritage, since it is a listed building.”

In addition to homes in Clapham and his Hampshire constituency, the minister owns five buy-to-let properties.

Huhne, who has three children and two stepchildren, is one of the wealthiest men in the cabinet, with a fortune estimated at £3m.

Pryce works as chief economist at the Department for Business, Innovation and Skills.
cycles into his Whitehall office some days, but he insisted:

I don’t have a car with a red box following me.”