The various Companies Acts, and equivalent legislation in other countries, place statutory responsibilities on directors of companies to act at all times in a way which protects the interests of their companies, and even more so, their shareholders. This can sometimes be ‘inconvenient’ for those of a more reckless bent, and one of the reasons for some of the more spectacular company failures over the years has been the willingness of directors to either fall in line or allow themselves to be browbeaten into compliance with the will of others rather than raise a challenge at the appropriate time.
When a director holds out against such pressure, it's an event notable for its rarity. The resignation of the Finance Director at EDF is one such example. Now I don’t know, nor do I pretend to know, the detail of the financial state of the company, or the extent to which that company would really be jeopardized by a decision to proceed with the construction of a new nuclear plant at Hinkley. And it’s always possible that his judgement is simply wrong, and that the judgement of others is better.
Nevertheless, it concerns me – and I think it should concern us all – that the reaction of the UK and French governments has been not that his concerns should be examined in more detail, but more a sense of relief that a perceived ‘obstacle’ has been removed. From the outside, it looks like a case of political will triumphing over financial reality.
At one level, whether a particular company succeeds or fails isn’t the issue; companies fail regularly. But at another, we are dealing here with a construction project with very long term implications. I’ve long been sceptical about the reality of the promises that the companies which build and operate nuclear power stations will be around long enough, and have the available reserves put aside from operating profit, to be able to pay the clean-up and decommissioning costs of nuclear power plants.If those stations have been built on shaky financial grounds in the first place, it becomes even more likely that we as taxpayers will end up picking up the tab. For an economy the size of the UK, it will be a substantial cost; for an economy the size of Wales, it would be a crippling cost. Hinkley, the current example where this issue comes to the fore, isn’t in Wales. But Wylfa is – and it would be a mistake to assume that the economics of that project are any more likely to stack up than those of Hinkley. Rather than seeing the resignation of M. Piquemal as an opportunity, governments really should be looking into his concerns rather more thoroughly.