After much deliberation, Hinkley Point finally received government approval – in principle – on Thursday.
The prime minister gave the go-ahead to the £18bn power plant under a revised agreement, which has been welcomed by the French developer and Chinese state-owned investor behind what is now Europe’s biggest energy project.
The approval came with conditions that the government described as a “new legal framework for future foreign investment in British critical infrastructure”.
It’s a shrewd move by the government to try to replace the existing legal framework with one that allows for more control over ownership of UK infrastructure projects.
What is the ‘golden share’?
This ‘golden share’ proposal will seek to ensure that significant stakes in major infrastructure projects cannot be sold without the government’s knowledge or consent.
In effect, the Office for Nuclear Regulation (ONR) will require notice from developers and operators of nuclear sites before any change of ownership, or part-ownership, can take place.
“It’s a shrewd move by the government to try and replace the existing legal framework”
The principle behind this is to allow the government, where required, to advise the ONR to take action to protect national security as a result of a change in ownership.
There are also proposals to review the public interest regime in the Enterprise Act 2002 and to introduce a national security requirement for continuing government approval of the ownership and control of critical infrastructure.
Other major economies have similar legal frameworks in place to protect their national security.
The ‘golden share’ proposal seems to have eased concerns around Hinkley. Hopefully with the new legal framework in place, the government will be able to continue to drive forward major infrastructure projects within the UK.
However, after the government shelved plans to give independence to the National Infrastructure Commission and empower it to oversee and co-ordinate key projects over the next three decades, doubts still remain over the progress the government will make with driving forward much-needed development of UK infrastructure.
Liz Jenkins is a partner at global law firm Clyde & Co