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Small nuclear reactors will get a £210 million government investment boost in the hope of moving to clean household energy “more quickly”.

Business Secretary Kwasi Kwarteng said the money for developer Rolls-Royce, matched by at least £250m of private sector funding, is a “once in a lifetime opportunity” for the UK.

The announcement, which comes in the middle of the COP26 climate talks in Glasgow, is part of the government’s push to move away from a reliance on fossil fuels – and comes over fears of further possible gas price hikes.

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Should the UK be investing in nuclear power?

Officials said the small modular reactors (SMRs) have the potential to be cheaper to build than traditional nuclear power plants because they are smaller so can be built in a factory then easily transported to a site.

The reactors could be in use by the early 2030s, they added.

Rolls Royce-SMR said a domestic SMR sector could help to create about 40,000 jobs.

The consortium said the jobs would also help support the government’s “levelling up” agenda, with up to 80% of the power station components set to be made in factories across the Midlands and the north of England.

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Ministers are looking to minimise the reliance on Chinese financing for nuclear power stations and reports have claimed the effort to downscale the risk involved is aimed at attracting domestic backers.

Three former Conservative energy ministers have argued COP26 needs to accept nuclear power, as well as hydrogen, should play a larger role in the global energy mix in order to hit net zero targets.

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Nuclear project cannot be in hands of ‘bullying’ China – IDS

A report by MP Chris Skidmore, to be launched on Tuesday and backed by former energy secretary Amber Rudd and Claire Perry, said the conference needs to “open its eyes to the combined value of nuclear and hydrogen as a complementary strategy alongside renewable energy”.

Ms Rudd, who co-wrote the report’s foreword, said: “Key clean sources of power such as nuclear will be instrumental for net zero, and as the report sets out, can potentially open up a new supply of hydrogen for a green revolution.”

The Department for Business, Energy and Industrial Strategy (BEIS) said the investment into SMRs will go towards progressing phase two of its low-cost nuclear project to further develop reactor designs and see if they would be suitable for deployment in the UK.

Rolls-Royce
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Rolls-Royce is leading a consortium to build SMRs

Rolls-Royce SMR estimates each SMR it builds could be capable of powering one million homes, equivalent to a city the size of Leeds.

Mr Kwarteng said: “This is a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence.

“Small modular reactors offer exciting opportunities to cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further.

“By harnessing British engineering and ingenuity, we can double down on our plan to deploy more home-grown, affordable clean energy in this country.”

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Rolls-Royce chief executive Warren East said the company has developed a “clean energy solution which can deliver cost-competitive and scalable net zero power for multiple applications from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing”.

Tony Danker, director general of the Confederation of Business Industry (CBI), said: “This is a hugely promising milestone for a technology that can not only boost the economy but help deliver a greener and more secure energy system overall.”

“Swiftly moving forward with small modular reactors in the years ahead will create jobs domestically, while creating new opportunities in export markets. This represents an excellent example of the public and private sectors coming together to realise vital Net Zero goals.”

The £210 million investment is part of the £385m Advanced Nuclear Fund announced last year as part of the 10 point plan for the government’s “green industrial revolution”.

In the chancellor’s latest spending review he said £1.7 billion will help bring at least one large-scale nuclear project to a final investment decision.

For full coverage of COP26, watch Climate Live on Sky channel 525.

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Get all the latest stories, special reports and in-depth analysis at skynews.com/cop26

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Insurer Hiscox lines up chairman months after Bayesian sinking

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Insurer Hiscox lines up chairman months after Bayesian sinking

Hiscox, the London-listed insurer, is close to naming a new chairman nearly eight months after the drowning of Jonathan Bloomer on the luxury yacht of technology tycoon Mike Lynch.

Sky News has learnt that Hiscox has narrowed its search to candidates including Richard Berliand, who chairs the interdealer broker TP ICAP.

Insurance insiders said that Mr Berliand was among fewer than a handful of potential successors to Mr Bloomer.

The sinking of the Bayesian off the Sicilian coast last August claimed the lives of Mr Lynch and his daughter, along with five other passengers, including Mr Bloomer.

A former boss of Prudential, Mr Bloomer was a well-liked figure in the City.

He had chaired Hiscox for just a year when he died.

The identities of the other candidates being considered by the company were unclear on Monday.

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Hiscox, which has a market capitalisation of just over £3.8bn, has seen its shares slip by about 12pc over the last year.

It was founded as a single underwriter at Lloyd’s in 1901.

A Hiscox spokesperson declined to comment.

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Asian stock markets tumble – with Hong Kong’s Hang Seng index suffering worst fall for 28 years

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Asian stock markets tumble - with Hong Kong's Hang Seng index suffering worst fall for 28 years

Asian stock markets have fallen dramatically amid escalating fears of a global trade war – as Donald Trump called his tariffs “medicine” and showed no sign of backing down.

Hong Kong’s Hang Seng index of shares closed down 13.2% – its biggest drop since 1997, while the Shanghai composite index lost 7.3% – the worst fall there since 2020.

Taiwan’s stock market was also hammered, losing nearly 10% on Monday, its biggest one-day drop on record.

Elsewhere, Japan’s Nikkei 225 lost 7.8%, while London’s FTSE 100 was down 4.85% by 9am.

Tariffs latest – FTSE falls after Asian markets tumble

US stock market futures signalled further losses were ahead when trading begins in America later.

At 4am EST, the S&P 500 futures was down 4.93%, the Dow Jones 4.32% and the Nasdaq 5.33%.

Markets are reacting to ongoing uncertainty over the impact of President Trump’s tariffs on goods imported to the US, which he announced last week.

A screen displaying the closing Hang Seng Index at Central district, in Hong Kong, China. Pic: Reuters
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A screen showing the Hang Seng index in central Hong Kong. Pic: Reuters

Speaking on Air Force One on Sunday, Mr Trump said foreign governments would have to pay “a lot of money” to lift his tariffs.

“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said.

The US president said world leaders were trying to convince him to lower further tariffs, which are due to take effect this week.

“I spoke to a lot of leaders, European, Asian, from all over the world,” Mr Trump told reporters.

“They’re dying to make a deal. And I said, we’re not going to have deficits with your country.

“We’re not going to do that because to me, a deficit is a loss. We’re going to have surpluses or, at worst, going to be breaking even.”

Mr Trump, who spent much of the weekend playing golf in Florida, posted on his Truth Social platform: “WE WILL WIN. HANG TOUGH, it won’t be easy.”

President Trump believes his policy will make the US richer, forcing companies to relocate more manufacturing to America and creating jobs.

However, his announcement has shocked stock markets, triggered retaliatory levies from China and sparked fears of a global trade war.

Reality hits that trade war no longer just a threat

China’s announcement of its tariff retaliation came late afternoon on Friday local time.

Most Asian markets closed shortly after – and markets in China, Hong Kong and Taiwan were closed for a public holiday – meaning the scale of the hit did not play out until today.

This morning we are getting a sense of the impact. Dramatic falls across all Asian markets clearly signal a realisation a global trade war is no longer just a threat, but a reality here to stay, and a global recession could yet follow.

Up until Friday, China’s response to Donald Trump’s tariffs had been perceived as restrained and designed to avoid escalation, the markets had reacted accordingly.

But that all changed last week when Mr Trump’s new 34% levy on all Chinese goods was matched by China with an identical tax. Both sit on top of previous tariffs levied, meaning many goods now face rates in excess of 50%.

These are numbers that make most trade between the world’s two biggest economies almost impossible and that will have a global impact.

China has clearly decided any forthcoming pain will have to be managed, and not being seen to be cowed and bullied by Mr Trump is being deemed more important.

But the scale of the retaliation will have further spooked the markets as it makes the prospect of negotiation and retreat increasingly unlikely.

Mr Trump added to the atmosphere of intransigence when he told the media on Sunday the trade deficit with China would need to be addressed before any deal could be done. The complete lack of concern from the White House over the weekend will also not have helped.

While smaller economies like Japan, South Korea, Cambodia and Vietnam are all lining up to attempt to negotiate, there are a lot of nations in that queue.

There is a sense none of this will be easily rectified.

US customs agents began collecting Mr Trump’s baseline 10% tariff on Saturday.

Higher “reciprocal” tariffs of between 11% and 50% – depending on the country – are due to kick in on Wednesday.

Investors and world leaders are unsure whether the US tariffs are here to stay or a negotiating tactic to win concessions from other countries.

Richard Flax, chief investment officer at wealth manager Moneyfarm, said: “I guess there was some hope over the weekend that maybe we would see this as part of the start of a negotiation.

“But the messages that we’ve so far seen suggest that the President Trump is comfortable with the market reaction and that he’s going to continue on this course.

Goldman Sachs has raised the odds of a US recession to 45%, joining other investment banks that have also revised their forecasts.

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In the UK, Sir Keir Starmer has promised “bold changes” and said he would relax rules around electric vehicles as British carmakers deal with a new 25% US tariff on vehicles.

The prime minister said “global trade is being transformed” by President Trump’s actions.

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KPMG has warned tariffs on UK exports could see GDP growth fall to 0.8% in 2025 and 2026.

The accountancy firm said higher tariffs on specific categories, such as cars, aluminium and steel, would more than offset the exemption on pharmaceutical exports, leaving the effective tariff rate around 12%.

Yael Selfin, chief economist at KPMG UK, said: “Given the economic impact that tariffs would cause, there is a strong incentive to seek a negotiated settlement that diminishes the need for tariffs.

“The UK automotive manufacturing sector is particularly exposed given the complex supply chains of some producers.”

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Trump’s tariffs: A negotiating tactic or the start of an ‘economic nuclear winter’?

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Trump's tariffs: A negotiating tactic or the start of an 'economic nuclear winter'?

Traders called this morning a complete bloodbath as the UK’s FTSE 100 joined world indexes in turning red as uncertainty over Donald Trump’s tariffs continued to batter stock markets.

Across Asia and Europe, hundreds of billions have been wiped off companies’ values, particularly in banking and manufacturing.

The cause is not just the imposition of those tariffs (the largest the US has inflicted since the 1930s) and the very obvious drag this will have on global trade and growth, but also the uncertainty of ‘what next?’.

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Trump: Tariffs are ‘medicine’

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Investors cannot work out if the Trump administration is genuinely wedded to tariffs on this scale, on the proviso that they will help re-shore companies and millions of jobs to the United States.

They don’t know if they are permanent or merely part of a negotiating tactic to address trade imbalances, and for America to use its economic heft to strike better deals.

If Mr Trump is open to deals (the first test comes later in a meeting with the Israeli prime minister), markets will calm, even if the midst of uncertainty hasn’t fully cleared.

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Time to change tactics with Trump?

However, if this is a genuine rewiring of global trade and the end of globalisation as we know it, markets and economies will continue to get battered.

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As one Trump supporter, billionaire Bill Ackman – who opposes the tariffs – put it, President Trump has launched a “global economic war against the whole world” that will usher in an “economic nuclear winter.”

It’s time for all of us to buckle up.

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