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The Gulf Crisis has quite simply transformed the perceptions of nuclear
power among many politicians. Don’t press me as to whether this is rational.
It’s occurred. I also think that a contributory cause of these changed perceptions
has been Dr Bill Wilkinson, who is deputy chief executive of British Nuclear
Fuels, addressing the British Nuclear Forum on the economics and environmental
impact of nuclear power. Wilkinson told the all-party group: ‘There are
many contributions to the overall cost of nuclear power, notably capital,
operating costs and nuclear fuel cycle costs. I will deal here only with
fuel cycle costs.

‘For Sizewell B the indicative fuel cost will be about 0.5 p per kilowatt
hour, or about one-eighth of the total. This should be compared with the
cost of coal for coal-fired stations which is at least 1.5 p/kWh, that is,
three times as much. Nuclear fuel costs will not therefore cripple the nuclear
power industry.

‘We can achieve these costs and, as shown by our recent press briefing,
THORP (BNFL’s new nuclear fuel reprocessing plant) will be a very profitable
venture for UK Ltd. It will make a profit of 500 million Pounds and capital
and decommissioning costs have been covered.’

Wilkinson then addressed himself to the question of the environment.
He claimed: ‘Nuclear power reduces CO₂ emissions and therefore
reduces the greenhouse problem and acid rain. Sixteen per cent of the world’s
electricity is nuclear generated. This avoids the emission of two billion
tonnes of CO₂ per year.

‘Discharges of radioactivity are no longer a cause for concern – the
new effluent treatment plants at Sellafield are reducing discharges to ‘near
zero’. The remaining problem is the management and disposal of nuclear waste.’

It’s the emission of CO₂, avoided by nuclear stations, which
has really struck home.

* * *

I first knew Kit McMahon (the chairman of Midland Bank) when, after
I was appointed to the Budget Committee of the European Parliament, he was
asked by Harold Wilson, then Prime Minister, to brief me, in the way that
the Bundesbank so well looked after my German colleagues. McMahon, a superb
technical central banker, and a senior figure in the Bank of England, was
later to renegotiate the financial aspects of the Algerian mediation for
the American hostages in Iran.

Against this background, and having met him recently in Brasilia, I
was surprised at Tim Rickman’s contribution to Forum of 24 November, ‘Sellout
of the century’, attacking inter alia the Midland Bank. So I asked McMahon
what he thought. In his reply, he commented first on the Midland’s relationship
with Living Earth, the environmental charity featured in Tim Rickman’s article
as one of the beneficiaries of the Midland’s Care Card scheme.

He pointed out: ‘Living Earth is just one of 19 charities from which
customers can choose as beneficiary for the donations. Other charities
. include the Terence Higgins Trust, the Samaritans, and Save the Children
Fund. Interestingly, Save the Children Fund has been quite critical of the
banks’ role in the debt crisis. It makes little sense, therefore, for Mr
Rickman to suggest we are making ‘destructive use’ out of our support for
Living Earth.’

McMahon went on: ‘Mr Rickman’s article supports the view that developing
countries’ debt is ‘one of the root causes’ of rainforest destruction. I
assume that the only reason Mr Rickman produces no evidence for this claim
is that there is none. The causes of rainforest destruction are highly complex,
and predate the debt crisis by several decades.

‘Throughout the developing world, rainforest destruction has a long
history that is best explained by the pressures of population density, land
distribution and poverty. There is no simple trade off between rainforest
and debt.’

He concluded: ‘It is not true that the banks have ‘shown a consistent
lack of interest in finding a solution to the (debt) crisis’. We fully admit
that the debt burden of many developing countries is considerable, and that
the banks ought to do what they can to alleviate these burdens. It would
be neither fair nor effective to simply ‘cancel the debt’, as Friends of
the Earth suggest we should. However, banks have already offered debt relief
to a number of countries under the auspices of the Brady initiative.

‘What the Brady initiative does is to allow banks to offer certain countries
a reduction in their debt and/or debt service payments. For their part,
countries agree to implement some fundamental – if painful – economic reforms,
which are supported by funds from international financial institutions.

‘These funds are also used to allow the countries to be more sure of
paying the banks the reduced level of payments. So far, debt reduction of
this kind has been offered to Mexico, Venezuela, Costa Rica, the Philippines
and Morocco; it is quite likely that many other countries will receive similar
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I find Sir Kit pretty convincing.