Rachel Reeves eyes cuts to nuclear in spending review

Energy industry insiders fear the Chancellor could target Britain’s mini-nuke programme

Matt Oliver, Industry Editor, Telegraph 28th Feb 2025

Rachel Reeves is eyeing cuts to Britain’s £20bn mini-nuclear reactor programme amid a scramble to slash government expenditure, insiders fear.

Sources believe the Chancellor is considering approving a smaller number of reactors than previously expected in an attempt to reduce the costs of the programme, which is part of wider efforts to transform Britain’s power grid.

The competition to design and build the first small modular reactors (SMRs) entered its last phase on Friday, with four finalists – Rolls-Royce, GE-Hitachi, Westinghouse and Holtec – told to submit final bids by mid-April.

It was previously suggested that up to three winners would be chosen by Great British Nuclear (GBN), the quango in charge of running the contest.

But sources said there was concern this has quietly been scaled back to a “maximum” of two – raising the possibility that only one winner will be chosen. Fewer reactors would be built overall as a result………………………………………

The Chancellor is struggling to balance the books as weak economic growth makes it harder to meet her self-imposed “fiscal rules” for borrowing.

Everything is on the table’

Industry sources said there had as yet been no suggestion that ministers had decided to scale back the SMR programme.

But the final outcome has been linked to the spending review and there remains uncertainty about how many vendors will be chosen.

One person briefed on the discussions warned: “It all comes down to the spending review. Everything is on the table.”……………………..

the nascent technology remains commercially unproven, with a string of European countries and the US all currently pursuing their own individual competitions to fund the first examples of the technology.

Scaling back Britain’s SMR programme would represent a significant retreat for Sir Keir Starmer, the Prime Minister, who this month announced plans to speed up the development of the mini reactors and vowed to “build, baby, build”.

………there are fears that Mr Miliband, the Energy Secretary, is under pressure to choose which energy schemes he will prioritise as he scrambles to deliver Labour’s promise…

………….The competition has suffered repeated delays, with ministers in the previous Conservative government originally suggesting it would be concluded last spring.

This week it emerged there had been yet another delay, with the deadline for final bid submissions moved back from the end of March to mid-April.

……………………….The Treasury was contacted for comment.
https://www.telegraph.co.uk/business/2025/02/28/reeves-eyes-cuts-to-nuclear-in-spending-review/