Wednesday, September 24, 2008

Nuke Family Silver Sold Off To French

The government has finally sold off the nuclear silver to the French government after the deal was put on hold to stave of the embarrassment of an announcement at the same time as a huge hike in gas bills. Hiking up gas prices, reporting huge profits, then buying nuclear plants, just wouldn't look good. 

Now the nuclear power company, British Energy - one of the few part publicly-owned firms left to sell - has been sold to French firm, EDF, in a £12 billion deal with around £4 billion of that filling the coffers to prop up Brown's ailing economy.

In addition, British Gas owner Centrica, which also announced huge profits and an equally huge rise in gas bills, will take a 25% stake in all new nuclear plants built by EDF.

British Energy, which owns eight UK nuclear power stations, has been on the books for months.

French government-owned EDF, along with British Gas owner, Centrica, had been widely expected to announce it was buying British Energy in August. 

Then, shortly after announcing huge profits and a steep rise in gas bills, out of the blue, EDF put out a statement in the middle of the night, saying "conditions were not right" to proceed with the deal. 

Brown had hoped to tap into the Saudis £500 billion Sovereign Wealth Fund when he tried to sell it off to the Saudis on his visit in June. That deal didn't come off. Maybe selling out nuclear industry to the Middle East was just too politically sensitive. 

So instead it is set to be sold off to the French government-owned EDF - and a lot of groundwork has been done to make this possible. 

British Energy is the last business part-owned by the state which has 37% stake and by law required a UK boss. So the rules were changed so a foreign firm and boss can take it over. 

Then, there would be opposition and long planning delays in building and replacing nuclear power stations. The planning laws are due to be changed with an unelected and unaccountable quango brought in to push it through.

It's a victory too for the nuclear lobby and in particular Gordon Brown's brother Andrew Brown, who is Head of Corporate Communications at EDF Energy.

EDF, with an 87% French government stake, is already one of the big six energy suppliers in the UK, along with Centrica.

Regardless of a Centrica stake in the company, the deal is still likely to be controversial, particularly over whether EDF should be able to develop new power plants on existing British Energy sites. 

And there's also the vexed issue of whether the UK's nuclear power industry should be placed in the hands of a firm run by a French government company.

The government has finally sold off the last thing we owned, the family silver.

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