Only a few short weeks ago, those leading the campaign to take the UK out of the EU were boasting of how Brexit would set the British economy free, allowing it to take advantage of the global opportunities offered by free trade with markets such as China.
Those promises looked empty yesterday as figures showed the economy slowing down and China upped the pressure on the UK to go ahead with the hugely expensive Hinkley Point nuclear station in Somerset, which it had been due to provide around a third of the finance for. French energy giant EDF was to fund the rest, selling back electricity to UK consumers at exorbitant cost.
A few days ago, Prime Minister Theresa May surprised many by saying the government would review the £18 billion project. According to some, she does not share former Prime Minister David Cameron’s “gung-ho” approach to deals with China. Yesterday, the Chinese ambassador to the UK upped the ante by warning the relationship between the two countries would be severely damaged if the project does not go ahead.
There are sound security reasons for not wanting to hand a sizeable chunk of your nation’s energy production over to a country you may have reservations about, politically and economically. But going back on the deal could puts other, less risky collaborations in jeopardy, at a time when the UK’s standing in the world has just taken a tumble, and it needs all the friends – and investors – it can get.
And with figures from the National Institute of Economic and Social Research estimating GDP fell by 0.2 per cent month-on-month in July, highlighting a “marked economic slowdown”, the stakes could not be higher.
As far as Hinkley Point is concerned, Mrs May is in a difficult position made all the more complicated by Brexit. It will not be the last difficult decision she will make in the months to come.
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