There are many reasons why China’s involvement in building nuclear power stations in Britain is wrong, yet those who oppose it, or question it, have struggled to articulate their unease without sounding racist, paranoid or Little-English, or getting bogged down in arcane financial minutiae.
One obstacle to exposing the British government’s error is language. In the case of China and the nukes, politicians, journalists and finance professionals are complicit in misleading usage of the words investment and tax. George Osborne, a master of such lexical abuse, maintains that Britain needs Chinese investment, and that the planned Chinese-French reactors won’t cost the British taxpayer a penny. Both propositions are false.
Investment is a greedy word, swallowing many different meanings. It can mean ‘buying a thing in the hope it’ll be worth more money when you sell it later’. It can mean ‘buying a thing in the hope it’ll generate a steady income’. Or it can mean ‘spending money to make a new, improved thing, in the hope people will feel the benefit, and pay enough to use it to recoup the money spent'. Sometimes it can mean all three. Take the example of a house in London. A wealthy person buys it, hoping to sell it later for a profit. She ‘buys it as an investment’. While she owns it, she lets it out. She is ‘investing in the rental market'. She builds a second house in the back garden: she is ‘investing in the demand for housing.’
In the British government’s presentation, construction of the Chinese-French reactors correspond to the third category – a new, improved thing. Just as Britain needs more houses, and should be grateful for those who build them, Britain needs the security of the low-carbon electricity supply that nuclear power offers, and China will provide it. Thank you, Beijing – Chinese investment!
But what if the hope that people use and pay for your new thing isn’t a hope? What if it’s a certainty, guaranteed by the government? And what if it isn't so much a new thing you build – like our imaginary housing investor’s second house – but simply a replacement of an existing, non-optional thing? Then it becomes a different kind of investment. In terms of the housing comparison, it’s like a house with a tenant who has no choice but to live there for ever, and is compelled to pay the rent the government sets on the owner’s behalf. Then the main investment isn’t in the house; it’s in the tenant. The government isn't encouraging Chinese investment in Britain’s electricity industry so much as selling China and France a captive market of British electricity users.
If investment is semantically bloated, tax is semantically starved. In Britain it has acquired the narrow meaning of ‘that percentage of a person or firm’s income compulsorily levied to finance public spending'. Income tax, in other words, or corporation tax. But there are other compulsory levies. The electricity bill is one of them. Electricity is a universal network: everyone must always have it, and everyone must pay.
British electricity customers can shop around for who supplies their electricity, but they will have no choice about whether they subsidise, through their bills, the new nuclear stations, which wouldn’t be built in pure market conditions. The provision of electricity is public spending, even if it is carried out by private companies, or, in the case of the Chinese-French reactors, foreign state companies. The electricity bill is, accordingly, a tax – a privatised tax.
The British taxpayer will pay to subsidise the new nuclear power stations. Whether that money goes through the Inland Revenue and the Treasury, or through private electricity companies, it is still a tax.
Britain does not, in reality, need Chinese investment in nuclear power stations. It needs safe, cheap, reliable, efficient electricity – and if the best way to generate it happens to be Chinese-built, French-designed nuclear reactors, great. It needs money to pay for them – and if a government-backed bond, issued by a non-profit trust set up to commission low-carbon power sources, were to be bought by China’s sovereign wealth fund, great again. Instead of which, citizens are bundled up, the rights to tax them sold to unelected foreign governments, and the domestic government is reduced to the role of steward, minding the master’s estate.