Five questions answered on comments from Ineos boss that Hinkley power will be "expensive"

How much will energy from Hinkley cost?

The boss of manufacturers Ineos - one of the UK's biggest energy consumers - has warned that energy produced from the planned Hinkley Point C power station will be too expensive for business. We answer five questions on Ineos’s boss’s comments.

What exactly has Ineos boss Jim Ratcliffe said?

Speaking to the BBC Ratcliffe said UK manufacturers would not find the price of energy from Hinkley affordable.

Mr Ratcliffe said: "The UK probably has the most expensive energy in the world."

"It is more expensive than Germany, it is more expensive than France, it is much, much, more expensive than America. It is not competitive at all, on the energy front, I am afraid."

How much will energy from Hinkley cost?

The government has signed a deal with France-based EdF to pay a guaranteed price of £92.50 per megawatt hour (Mwh) for 35 years. EdF is developing the station with the backing of Chinese investors.

Ineos owns the Grangemouth power plant in Scotland and has recently agreed a deal for nuclear power in France at 45 euros (£37.94) per Mwh. However, the world nuclear association pointed out this deal was for an unknown duration whereas the government’s deal with EdF is for 35 years.

What have other experts said?

The World Nuclear Association told the BBC: "It should be pointed out that France has the highest proportion of nuclear in its generation mix and lower than average EU power prices, so there is nothing automatically expensive about nuclear power.”

In October John Cridland, director-general of business lobby group the CBI, speaking to the BBC said:

"It's important to remember this investment will help mitigate the impact of increasing costs. The fact is whatever we do, energy prices are going to have to go up to replace ageing infrastructure and meet climate change targets - unless we build new nuclear as part of a diverse energy mix."

However, Dr Paul Dorfman, from the Energy Institute at University College London, added: "what it equates to actually is a subsidy and the coalition said they would never subsidise nuclear".

How much energy will Hinkley provide when it is up and running?

Once developed Hinkley will provide 7 per cent of the UK’s energy mix. It will cost £16 billion to build and is expected to be ready by 2023.

How is Ineos currently doing, wasn’t it going to close a short while ago?

Yes, the company had announced in October the permanent closure of the Grangemouth plant in Scotland, which would have affected 800 jobs. However, when a bitter dispute between Ineos and the unions was called off it was announced that the plant would stay open.

However, Ratcliffe has said that Ineos, which will be the first company to import shale gas from the UK, was on a “knife edge” since that troublesome time.

He told the BBC: "I think Grangemouth has the prospect of a very good future if it can get through the next three years."

"Attitude on the site is much more positive and you can see people are really anxious to move on."

Grangemouth provides 70 per cent of the fuel used at Scotland's filling stations.

Chairman of INEOS, Jim Ratcliffe. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Photo: Getty Images
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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.