Theresa May has been prime minister of the United Kingdom for just a month – but she's done more than the previous three British leaders did to champion free-market capitalism. Other would-be Western leaders could look to May to understand: voters need their elected officials to employ calm actions, not demagoguery.
“British editorialists have fretted that cancelling the project would send the wrong post-Brexit signal: That Britain isn't open for business. But Hinkley Point has – or had – a fatal flaw: its chief owners are the French and Chinese governments. ”
May, a Conservative, became Britain's second female prime minister not because she won election, but because her predecessor had to leave four years ahead of schedule.
David Cameron, also a Conservative, won re-election last year by making a promise to the people in his party who have long opposed Britain's membership in the European Union. Cameron promised that he'd hold a referendum on Britain's role in Europe.
Cameron, a pragmatist, promised this vote – "Brexit" – because he thought that Britain would vote to stay in.
But in June a majority voted to leave. And so Cameron, who had campaigned to stay, decided that he had to leave, too.
Until she replaced him, May was unknown in America. A vicar's daughter who served Cameron as Home Secretary (responsible for national security), she had less of a public profile than, say, former London mayor Boris Johnson.
Johnson served as the Donald Trump of the Brexit campaign, railing against immigration. But he lost the party's leadership fight.
In one of her first actions as prime minister, May demonstrated that she deserved to win. Upon taking office, she announced that she might halt a major project supported by the Cameron government: a $23 billion nuclear-power project to be built along England's southwest coast.
It's hard to overstate how important this project, Hinkley Point C, is to Britain's political class.
Three successive governments – from Tony Blair and Gordon Brown in the Labour Party to Cameron in the Conservative Party – supported it. The project was supposed to provide 13 percent of Britain's electricity.
After May said she was re-considering the deal, Peter Mandelson, a top official in the Blair government, said that killing the plan would go against Britain's interests. British editorialists have fretted that cancelling the project would send the wrong post-Brexit signal: That Britain isn't open for business.
But Hinkley Point has – or had – a fatal flaw: its chief owners are the French and Chinese governments. Électricité de France (EdF), owned by the French state, would build and operate the project. EdF's partner is China General Nuclear Power, a state firm.
France and China have a common goal: to create jobs for their citizens by exporting the expertise it takes to build something as complex as a nuclear project.
But even these state-backed companies need additional state support. They asked the British government to guarantee that customers would pay twice the going rate for energy. (And the British government would have to figure out what to do with nuclear waste – something no government has yet done.)
If private companies were willing to build a nuclear project in Britain, taking the risk that they wouldn't recoup their investments and that they wouldn't know what to do with the waste, that would be a different situation.
But Hinkley Point has nothing to do with real free markets.
If she does kill this scheme, May would be sticking up for free-market capitalism: that is, where private companies and their investors take such measured risks and profit or lose by their calculations.
That's something that Britain needs. Our closest ally, like us, has not been good at free-market ideals over the past decade.
Just as America bailed out its largest banks in 2008, so did Britain. The British government still owns the country's third-largest bank.
It's hard to think of what's more wrong with the economy than companies owned by foreign governments controlling such a basic economic element as the power supply.
This piece originally appeared at the Washington Examiner
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Nicole Gelinas is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow her on Twitter here.
Photo by WPA Pool / Getty
This piece originally appeared in Washington Examiner