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Theresa May 'seeking strong relationship' with China despite nuclear plant pause

Published 01/08/2016

Former energy secretary Ed Davey says George Osborne rejected his proposal without explanation
Former energy secretary Ed Davey says George Osborne rejected his proposal without explanation

Theresa May will continue to seek a strong relationship with China, Downing Street insisted despite claims the new Prime Minister has a "suspicious approach" to dealing with the country.

Mrs May shocked the business world when she ordered a last-minute halt to finalising the Hinkley Point nuclear power plant project - in which China has a one-third stake - so the situation could be reviewed.

It is thought there are security concerns about the role of the Chinese state investing in critical infrastructure in the UK.

Former business secretary Sir Vince Cable has said Mrs May was unhappy with what she saw as the government's "gung-ho" approach to doing deals with Beijing when they were in the coalition cabinet together.

The Liberal Democrat claimed she had a "general prejudice" against investment from the Asian giant due to national security issues.

"It came up in all kinds of different ways," Sir Vince told The Sunday Telegraph.

"(George) Osborne kept pushing for more liberal treatment of visas for Chinese businessmen and she was very reluctant to go along with that. So I think she has form in adopting a more suspicious approach, more in line with the American position."

But Mrs May's official spokeswoman said: "Of course with the role that China has to play on world affairs, on the global economy, on a whole range of international issues, we are going to continue to seek a strong relationship with China."

And after the Financial Times reported that Treasury minister Lord (Jim) O'Neill could quit the Government over Mrs May's approach to China, the spokeswoman stressed he "has a role to play."

Another Lib Dem former cabinet minister, ex-energy secretary Sir Ed Davey, claimed George Osborne blocked moves intended to provide extra protection from potential national security threats posed by China.

He said no explanation was given for the then chancellor's decision to reject a pivotal "special share" in the Somerset project.

"Concerns on Chinese involvement didn't stand up to scrutiny last time round, but if the Treasury had adopted my proposal for a special share we could have included extra safeguards. But Osborne rejected it without explanation," Sir Ed told the Daily Telegraph.

The proposed special share in the consortium would have enabled the Government to intervene on certain decisions to protect the national interest, he said.

Another factor in Mrs May's delay to the £18 billion project may be fear of a backlash over prices due to the unusually large amount of money French energy giant EDF will be paid for generating power from Hinkley - £92.50 per megawatt hour of electricity generated.

Labour leader Jeremy Corbyn described the price levels as "disturbing" and backed a review.

But the boss of EDF, Vincent de Rivaz, has tried to calm the fears of workers by insisting he understands why Mrs May wanted more time to consider the project, while insisting the deal was still "strong".

The company's board voted narrowly to give the final go-ahead for the long-delayed project but the Government pulled back from signing the contract, saying it would make a decision in the early autumn.

Business and Energy Secretary Greg Clark has insisted the Government will "carefully consider" all the component parts of the project.

Chinese state media said the country "cannot tolerate" accusations that Britain's national security may be put at risk by the Asian giant's involvement in Hinkley Point.

A comment piece for the official Xinhua news agency reportedly said the delay to the project "adds uncertainties to the 'Golden Era' of China-UK ties".

"China can wait for a rational British government to make responsible decisions, but cannot tolerate any unwanted accusation against its sincere and benign willingness for win-win cooperation," it added.

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