Putin providing ‘masterclass’ on risks of foreign energy dependence

Vladimir Putin is providing a “masterclass” in the economic risks of being heavily dependent on international energy markets, a former chairman of the Joint Intelligence Committee (JIC) has warned.

During a House of Lords debate earlier this week on the government’s legislation to create a new financing mechanism for nuclear power, which took place before the Russian president ordered the invasion of neighbouring Ukraine, Baroness Neville-Jones called for the UK to have greater energy self-reliance.

She said: “If ever the world needed a demonstration that high dependence on international energy markets carries a considerable risk to the economy, Mr Putin is giving us a masterclass. Do we really need more persuasion that we must exploit our undoubted ability to become more self-reliant in energy?”

The Tory peer, who oversaw the security service as chair of the JIC in the mid-1990s, also warned that while not in favour of a “blanket ban” on foreign state investment in funding nuclear, the UK must be “vigilant” about the issue.

“The government need to be vigilant on the issue and use, if necessary, the power of the special share and the terms of the recently passed foreign investment act.”

Lord Rooker, a former energy minister in the last Labour government, urged the government to bar Chinese and Russian investment in the UK nuclear industry.

He said: “There is no reason at all why the UK, along with other democratic states, cannot ensure security and stability of nuclear technology and get control of it itself. My view is that there should be no finance from China or Russia at all. They cannot be trusted with commercial contracts these days.”

Lord Callanan, junior energy and business minister, responded on behalf of government that while investment is welcome, this should “never at the expense of our national security”, referring to recently passed legislation clamping down on foreign ownership of critical national infrastructure.

“We recognise the importance of having appropriate protections and scrutiny in place to ensure that any investment aligns with our core interests. The National Security and Investment Act gives the government significant oversight of acquisitions of control in a nuclear project. It is also important to note that national security considerations will form part of the wider approvals process.”

Following its second reading in the Lords, the Nuclear Energy (Financing) Bill will now be scrutinised by a committee of peers. The bill has already been passed by the House of Commons.