Month: May 2022

Kwasi Kwarteng said there might be a “small effect” on bills under a new model to fund nuclear projects.

But he said in the long-term, nuclear would provide cheaper power and energy security.

He said financial help had been offered to reduce bills in the short-term.

Mr Kwarteng said “nothing should be taken off the table” to ease pressures on the cost of living, including a windfall tax on the excess profits of oil and gas companies.

The BBC spoke to Mr Kwarteng as he visited north Wales on Thursday, where the government has pledged to build a new nuclear power station at Wylfa on Anglesey.

A previous plan for a new nuclear power station at Wylfa collapsed in 2020, but last month, Prime Minister Boris Johnson said he wanted to revive the idea “as fast as possible”.

Investing in nuclear power is one of the key focuses of the government’s energy strategy, released in April.

The government plans to reduce the UK’s reliance on oil and gas by investing in alternative sources of energy, including nuclear, wind and hydrogen power.

The strategy contains an ambition to deliver up to eight new nuclear reactors before 2030, including two at Sizewell in Suffolk.

The government wants nuclear to supply 24 gigawatts (GW) of electricity by 2050 – about 25% of the UK’s predicted energy demand.

Mr Kwarteng said he thought investing in nuclear was “part of the solution” to the UK’s energy needs.

He said “nuclear is back on the table” because it provides more decarbonised power and a sustainable energy source.

But building new nuclear power plants can be vastly more expensive than renewables and can take decades to build.

A new law means new nuclear reactors can be funded by adding a small levy to people’s bills during their construction.

The government says this will lead to savings for consumers in the long run, as developers can have more money upfront, and are less likely to take out loans.

But critics argue this shifts the risk of building new nuclear reactors onto the consumer, without knowing how long projects will take or how much they will cost.

When asked whether putting bills up in the short-term was worth the political gamble, Mr Kwarteng said: “Absolutely. People here really want to see new investment, jobs, opportunity for their kids and their community.”

The government’s own public attitudes research shows while 86% of people support renewable energy, public support is lower for nuclear energy (37%).

Nuclear plants are extremely expensive to build, although the overall cost is comparable to other forms of power.

Hinkley C – the newest of the UK’s planned nuclear power stations – is expected to cost £22-26bn.

When asked if he thought the public supported investment in nuclear, the business secretary suggested “nuclear’s more popular now than it’s been for a while”.

He said there were two reasons why we want to see more nuclear – “security of supply here in the UK” and “what experts call firm power”.

“What that means is, if you look at renewables the sun doesn’t always shine, and the wind doesn’t always blow,” he said. “The great thing about nuclear power is that it’s continuous power.”

In a community like Wylfa, he said, “there’s actually broad public support”.

“Now the nuclear power won’t be everywhere in the UK, it will only be on sites where there is a history, a tradition.”

The government’s plan for a new nuclear power station at Wylfa has split opinion among local people.

Jo Fosbrook, a local holiday business owner, said she reluctantly accepted that investing in nuclear power was necessary.

“You can’t say, ‘that I don’t want nuclear power’, because what else are you going to have?” she said. “What are you going to say to everybody, have a candle on in the eve instead?”

But Emlyn Richards, a retired Methodist minister, was less keen on the idea, expressing a preference for renewable sources of energy.

“Anglesey is noted for its wind,” he said. “Why don’t they harness that and turn it to power”.

He said Wylfa was the “most beautiful spot on the island”. “I don’t want them to spoil that beauty for the generation that’s coming after us,” he added.

As part of its plan, the government opened a £120m fund designed to stimulate the development of nuclear technologies on Friday.

As well as large, traditional nuclear reactors, the government is also supporting the development of small nuclear reactors (SMRs), which are smaller and can be assembled in factories – making for a simpler construction project.

Tom Samson, CEO of Rolls Royce SMR, who wants to build some in the UK, told the BBC they hoped to finance their SMRs through a combination of private financing and government support.

Mr Samson said: “Generating electricity from nuclear is a much better way to keep consumers’ costs as low as possible.”

He added the government’s model of funding nuclear projects, which can add levies to people’s bills while they are in construction, would reduce the costs of delivering nuclear projects.

“We have to finance the build and we have to find ways to finance that build most economically,” he said.

It is understood the PM wants to see civil service staffing levels drop to 2016 levels.

Government sources suggested the plan is about cutting people not needed and it could save £3.6bn a year.

A civil service union warned an “ill thought-out” plan could affect services.

Jacob Rees Mogg – the minister in charge of efficiency – told the BBC that they were trying to get back to 2016 levels of staffing before Brexit and the pandemic.

Mr Johnson told the Daily Mail: “We have got to cut the cost of government to reduce the cost of living.”

At an away day in Stoke-on-Trent on Thursday, the prime minister gave ministers a month to produce plans to drastically shrink the civil service, as the government comes under increasing pressure over the rising cost of living.

There were 384,000 civil servants employed in 2016 – the lowest number since World War Two – but as the UK prepared to leave the EU numbers steadily rose until they reached 475,000 at the end of last year.

While large-scale job cuts are likely to take time, a government source said “instant savings” could be achieved by imposing a recruitment freeze in Whitehall and abolishing any vacancies which had not been signed off by a minister.

Examples include the passport office and 70 staff said to be still working on climate change conference COP26.

A source said the cuts were “not ideological” but about “good housekeeping”.

The prime minister suggested to the Daily Mail that the savings could be used for tax cuts, saying: “Every pound the government pre-empts from the taxpayer is money they can spend on their own priorities, on their own lives.”

But civil service union the FDA said the expansion of Whitehall since 2016 had been necessary to tackle “two unprecedented events”, Brexit and the Covid-19 pandemic.

FDA general secretary Dave Penman said the government could decide to cut the civil service back to 2016 levels, but he said it would also have to choose “what the reduced civil service will no longer have the capacity to do” which may affect services such as passports, border control or health.

“Without an accompanying strategy, these cuts appear more like a continuation of the government’s civil service culture wars – or even worse, ill-thought out, rushed job slashes that won’t lead to a more cost-effective government,” he said.

Major job reductions through natural wastage – waiting for people to resign or retire rather than enforcing redundancies – would take many years, Mr Penman warned.

Labour accused the government of “pointless rhetoric and lack of action” instead of implementing an emergency budget to offer more support to people struggling with bills.

A government spokesperson said that the prime minister and ministers were “clear that the civil service does an outstanding job delivering for the public and driving progress on the government’s priorities”.

But they added when people are facing rising costs, they “rightly expect their government to lead by example and run as efficiently as possible”.

In his first national address since protests began last month, he offered to cede some of the presidency’s power to parliament, but set no timetable.

Sri Lankans who have been calling for him to resign over an unprecedented economic crisis were unimpressed.

Many said the speech failed to address the real issues.

“Where were you for the last 30 days? People don’t have medicine, people don’t have food, the entire country’s at a standstill,” Kavindya Thennakoon, a protester in Colombo, told the BBC.

“The reforms he’s suggesting are not what we need. What we need right now is for [the president] to resign from office… It baffles my mind that Gotabaya Rajapaksa doesn’t understand that.”

On social media, many referred to the resignation of Prime Minister Mahinda Rajapaksa – the president’s brother – earlier this week as they called for him to quit too. “One down. One more to kick out,” read one tweet on Thursday morning.

“You should have advised your ministers and your own brother Mahinda against influencing their goons to initiate a wave of terror. If not for their stupidity, Sri Lanka would not have experienced a wave of violence,” another tweet read.

Weeks of peaceful protests against the government turned violent on Monday, after supporters of Mahinda Rajapaksa attacked anti-government demonstrators and destroyed two protest sites where thousands had congregated.

Though the older Rajapaksa brother quit as PM shortly after, angry mobs have since been targeting property belonging to the family and other politicians supporting them.

Violence was reported on both Monday and Tuesday nights. Shops near Colombo were torched, as well as a resort owned by one of Mahinda’s sons.

The two-time former president is now holed up in a naval base in the north-east of the country for his own safety, the military has confirmed.

Security forces are deployed across Sri Lanka with orders to shoot looters on sight.

Gotabaya Rajapaksa made no mention of the role of pro-government supporters in triggering the violence, only condemning the actions of the mobs and vowing to bring down the full force of the law against them.

A nationwide curfew that shut shops, businesses and offices was lifted for a few hours on Thursday morning, but will be reimposed in the afternoon.

The BBC’s Anbarasan Ethirajan, in Colombo, reports that residents started lining up outside petrol stations even before the curfew was lifted. More vehicles could be seen on the roads as people rushed out to buy essentials.

Sri Lankans are desperate as basic items like food and fuel run out or become unaffordable.

Its dire financial situation has caused the Sri Lankan rupee to plunge, provoking severe shortages of basic items such as food, fuel and medical supplies.

The government blames the Covid pandemic, which all but killed off Sri Lanka’s tourist trade – one of its biggest foreign currency earners.

It also says tourists were frightened off by a series of deadly bomb attacks on churches three years ago.

However, many experts say economic mismanagement is to blame.

There is a great deal of anger against the Rajapaksa family. Many people believe Mahinda Rajapaksa paved the way for his relatives to plunder the country’s wealth for their own financial gain.

All the president’s brothers, as well as some of his nephews, held key positions in the government before continued protests forced them to step down.

During his nationwide address, Mr Rajapaksa said he would appoint a new prime minister who commanded the majority of support in parliament, as well as a new cabinet.

He had said earlier he was holding talks with other political parties aimed at forming a unity government. But the main opposition has said it will not be part of the interim administration unless the president stands down.

At present, there is no clarity on which political parties might come together to form such a government.

The political stalemate comes as Sri Lanka attempts to iron out a bailout package with the International Monetary Fund (IMF) – the island’s $81bn economy is near bankruptcy.

It has suspended its foreign debt payments, largely because it cannot service loans from China that paid for massive infrastructure projects.

While the pandemic hit the vital tourism sector and shrank Sri Lanka’s earnings and foreign exchange reserves, experts say problems have been exacerbated by populist tax cuts in 2019 and a disastrous ban on chemical fertilisers in 2021 that devastated crop yields.

UK Prime Minister Boris Johnson visited both countries to sign the deals, amid debate about them joining Nato.

The pacts also state that Finland and Sweden would assist the UK in a crisis.

Mr Johnson and Swedish PM Magdalena Andersson said co-operation was “even more important” given Russia’s invasion of Ukraine.

The second deal was announced in a joint press conference with Finnish President Sauli Niinistö.

Mr Johnson said the “solemn declaration” between the UK and Finland was reflective of the “extreme difficulty of the times we are in”.

He emphasised the deal was “not a short-term stop gap” while Finland considered whether to join the Nato defensive alliance, but rather a “enduring assurance between two nations”.

Asked if there would be “British boots on the ground” in Finland should a conflict break out, Mr Johnson said military assistance would be offered, but that the “nature of that assistance” would depend upon the “request of the other party”.

Mr Johnson added the agreement would become the “foundation of an intensification of our security and our defence relationship in other ways as well”.

Mr Niinistö said his nation appreciated the UK’s “strong support” of Nato’s open-door policy to Finland’s potential membership.

He said joining Nato would not be “against anybody” and the UK deal was intended to “maximise our security one way or another” while considering joining the defensive alliance.

However, when asked if the possible move could provoke President Vladimir Putin, Mr Niinistö said Russia would be responsible if Sweden or Finland joined Nato.

He said Russia was suggesting the two nations did not have their “own will” by threatening them against applying for membership.

“They are ready to attack their neighbouring country, so… my response would be that ‘you caused this – look at the mirror'”.

Speaking earlier in Sweden Mr Johnson said: “If Sweden were attacked and looked to us for help and support, then we would provide it.”

Asked by the BBC to spell out exactly what the UK would do if Russia attacked Sweden, Mr Johnson said the deal meant that “upon request from the other party, we would come to the other party’s assistance”.

Ms Andersson argued her country would be safer as a result of the mutual assistance agreement with the UK, adding: “Of course this means something. This is important whatever policy choice we make in Sweden.”

She also explained the country was “exploring all possible options and Nato is one of them that is on the table”.

Finland says applying to join Nato is all about defence. But Vladimir Putin doesn’t see it that way. He’s always viewed Nato’s eastern expansion as a threat.

Finland shares an 800 mile (1300km) long border with Russia, bringing the alliance’s military might that much closer Moscow.

Finnish and Swedish membership will make Nato more robust too – boosting its eastern flank and presence in the Baltic Sea. And the Kremlin has threatened retaliation.

Some fear it might deploy targeted nuclear weapons. But Finnish diplomats I’ve spoken to believe Russia has its military hands full in Ukraine and that it will instead focus on cyber and disinformation campaigns.

They say President Putin has himself to blame for Nato expanding. Before Russia invaded Ukraine, most Finns and Swedes preferred to work alongside, but not inside, Nato.

Russia’s aggression – its expansionist zeal – changed all that.

The agreements with Sweden and Finland are not a legal or automatic security guarantee but a political declaration that the UK would come to their aid, if requested.

In an interview with the UnewsUK, Mr Johnson described the deal with Sweden as stating something that “should be implicit” in the countries’ relationship anyway.

Asked if he thought Sweden should join Nato, Mr Johnson said it was “not for the UK to intervene” in their internal debate over whether to apply to become a member of the alliance.

But he added: “We would strongly support Sweden’s accession, if that’s what the Swedes chose to do. We’d certainly try to make things go smoothly and easily as possible.”

Nato – the North Atlantic Treaty Organisation – is a 30-nation defensive alliance founded shortly after the end of World War Two.

It has its headquarters in Brussels, but is dominated by the massive military and nuclear missile power of the US.

Support for joining the Nato has increased in both Sweden and Finland since Russia invaded Ukraine, despite their long history of pursuing policies of military neutrality to avoid conflict with regional powers.

Finland and Sweden are both modern, democratic countries that fulfil the criteria for membership.

Nato’s chief, secretary general Jens Stoltenberg, has said the alliance would welcome them with open arms and there would be minimum delay in processing their membership.

Russia has previously warned both nations not to join Nato and threatened “a military technical response” if they do try to become members.

Kremlin spokesman Dmitry Peskov stressed that Moscow would have to “rebalance the situation” with its own measures if any bid went ahead.