Home / News and Insights / Insights / Pausing Hinkley C has made Theresa May look tough – but in the end she can’t afford not to approve it
Stuart Thomson Stuart Thomson Head of Public Affairs
15 September 2016

Pausing Hinkley C has made Theresa May look tough – but in the end she can’t afford not to approve it

This article was first published in The Guardian, 14 September 2016.

If Wedneday’s reports are to be believed, Hinkley C nuclear power station will get the go-ahead this week after the project’s eleventh hour postponement in June – a sequence of events which has as much to do with politics as with energy policy.

In her first months as Prime Minister, Theresa May has wanted to show she has a firm grip on all the big decisions facing her government and that just because David or George had said “yes” to something does not automatically mean that policy would go ahead unchallenged. Whether it’s over the chair of the BBC Trust, grammar schools or Hinkley, there is clear blue water between the approach taken by Mrs May and the previous administration.

No-one should be too surprised by this. New Prime Ministers, even when from the same party as their predecessor, often change tack. One of the first things John Major did on taking over from Margaret Thatcher was to dump the poll tax. Gordon Brown promised MPs a vote on going to war to show that he wasn’t Tony Blair.

While an obvious ripple of apprehension went through the investor community at the initial decision to reconsider the deal, this was matched by an appreciation of the changed political landscape that Mrs May faced. Any initial embarrassment in France and China will fade very quickly. Given the timescales involved, a delay of weeks matters little.

Perception is important when dealing with international investors and world leaders, and May has demonstrated to the Chinese that she is a serious decision-maker who is not to be lightly dismissed. We are a long way away from a Mrs Thatcher style “handbagging” in this case.

But crucially, everything the Government does at the moment must be viewed through the prism of Brexit.

By taking the difficult path of reviewing the Hinkley agreement, May set a tone of toughness which will be essential if her government is to make a success out of Brexit. The role of the French government in the Hinkley project should not be ignored in this context.

The initial economic figures since the vote to leave are holding up, but the good news is inconsistent. This leaves the Government vulnerable. The Hinkley Point decision is aimed at building up a head of steam for investment which will deliver economic and energy benefits but also build a valuable skills base.

The investment is for the long-term, a clear sign that Britain remains a big global player and a friend of China and all potential inward investors. It reinforces the Government’s message about the benefits of working with Britain, blessed with its stable financial, legal and political systems.

A green light for the power station will inspire confidence in global markets about investing in different parts of the UK’s infrastructure – HS2 is one obvious example, further energy projects and shale gas exploitation would be others.

There are party management benefits, too, for Mrs May. Approving the project this week would set the backdrop for Liam Fox’s global trade negotiations and gives David Davis more weight across Europe and Boris Johnson something to shout about on his world tour to promote British business.

Whatever decision is taken on Hinkley, Mrs May would be bound to face some criticism but by reassuring investors and securing skilled jobs, she is sidelining many of those voices. A go-ahead would be clear direction on a policy that has long been called for.

What is critical now is that the Government maintains momentum on infrastructure and investment. Next in the Prime Minister’s in-tray is a decision on aviation capacity. If she deals with that one, May really will prove that she means business in an area where her predecessor was distinctly lacking.

Meanwhile, countries around the world will now see a British Prime Minister who deserves respect.

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