Nuclear power, climate change and UK security

Britain's gas and electricity supplies could be at the mercy of unstable governments or politically motivated investors unless the UK achieves energy independence, John Hutton, the Business and Enterprise Secretary, has warned. In a major speech yesterday, Mr Hutton laid bare why he thinks Britain must overhaul its energy industry to ensure security of future needs.

The speech comes just weeks before the Government is due to announce whether to give the go-ahead for a programme to build new nuclear power stations.

Although Mr Hutton said no final decision had been made, the tone of his speech suggests he is starting to lay the groundwork for what will be a controversial announcement that Britain is to become more dependent on nuclear power for its energy needs.

Mr Hutton said: "Climate change and soaring energy demand are combining to create a perfect storm during the next half century. A storm in which access to secure and competitively priced energy is like to become the major political headache in capitals across the world.

"Hydro-carbon resources, particularly gas and oil, are concentrated in regions which include some of the least stable parts of the world. As a country we must now decide how we respond to the inevitable politicisation of energy in the coming half century," he said.

"Whether, in the face of the challenge of climate change and the risks of energy insecurity, more must be done to create a modern form of energy independence for the UK in the 21st century." In a world where global competition for energy is intensifying, the emergence of "resource nationalism" and "state-owned monopolies" would add to the instability of supplies, as could the growth of rich and powerful state-run investment houses.

Mr Hutton said: "The huge growth of sovereign wealth funds - now valued by the IMF at between $2,000bn to $3,000bn (£990m to £1,490bn) and set to grow by perhaps $800bn to $900bn a year - is increasing fears that these funds could be used to exercise political leverage.