Sizewell C: Govt commits £14.2bn to new nuclear power station
Fifteen years after the Sizewell C nuclear power station was proposed, the government will announce a £14.2bn commitment to the Suffolk site.
Chancellor Rachel Reeves is set to confirm the funding at the GMB union conference ahead of the spending review on Wednesday, which will set departmental budgets until 2029.
Energy Secretary Ed Miliband will call it a “golden age” of nuclear to boost the UK’s energy security.
The funding will go towards creating 10,000 jobs, the government will say, including 1,500 apprenticeships, and will support thousands more jobs across the UK.
On Monday, it was revealed Britain’s nuclear power sector grew by a quarter in 2024 to £20bn compared with three years ago, underpinned by a record workforce which has increased by a third, according to research by the Nuclear Power Association.
About 87,000 people now work in the industry, with the rise largely driven by new nuclear power projects at Sizewell C and Hinkley Point C in Somerset.
Sizewell C was initially proposed by French energy company EDF and China General Nuclear Power Group, but in 2022 the Conservative government bought the Chinese company out and the state now owns 83.5% of the project with EDF.
Hinkley Point C, seen here in 2020, is another nuclear power plant under construction. Pic: PA
The green light for construction to begin was given in January 2024 under the Conservative government, and at last autumn’s budget, Ms Reeves announced a £2.7bn commitment to Sizewell C and said a final commitment would be announced in the 2025 spending review.
Construction is expected to take between nine and 12 years and when it is complete, it will provide around six million homes with nuclear energy.
A total of £330m of contracts have been signed with local companies, with 70% of all contracts expected to go to 3,500 British suppliers.
Ms Reeves said: “Today we are once again investing in Britain’s renewal, with the biggest nuclear building programme in a generation. This landmark decision is our Plan for Change in action.
“We are creating thousands of jobs, kickstarting economic growth and putting more money in people’s pockets.”
HS2 all over again?
Campaign group Stop Sizewell C called it “HS2 mark 2” after the high-speed train line that has faced high costs, delays and parts of it being axed.
They questioned how much money the government will ultimately invest in the nuclear power station as they said no information has been provided about the expected total costs.
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Alison Downes, from Stop Sizewell C, said: “Where is the benefit for voters in ploughing more money into Sizewell C that could be spent on other priorities, and when the project will add to consumer bills and is guaranteed to be late and overspent just like Hinkley C?
“Ministers have still not come clean about Sizewell C’s cost and, given negotiations with private investors are incomplete, they have signed away all leverage and will be forced to offer generous deals that undermine value for money. Starmer and Reeves have just signed up to HS2 mark 2.”
Or vital step towards domestic clean energy?
But the funding was called a “vital step toward delivering the secure, domestic clean energy” the UK needs by “pro-growth” campaign group Britain Remade.
Sam Richards, CEO of the Conservative thinktank, added: “The government must go much further.”
He called for less red tape to speed up the planning process and to show a “real commitment” to building nuclear power stations.
The UK’s jobless rate ticked up to 4.6% in April while payrolled employment has fallen sharply since, according to official figures covering the period when budget tax hikes on businesses came into effect.
The Office for National Statistics (ONS) said the new unemployment rate covering the three months to April was the highest since July 2021.
It had previously stood at 4.5% – a total of more than 1.6 million people.
At 4.6%, it is above the peak level predicted for this year, just in March, by the Office for Budget Responsibility.
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Figures from the taxman also highlighted by the ONS showed the number of people in payrolled employment during May fell by 109,000 – double April’s revised figure of 55,000 and the biggest monthly drop in five years.
The ONS Labour Force Survey data was the first to cover April’s rises in employer national insurance contributions and the national living wage – hikes to costs for businesses which lobby groups had warned would result in job losses, price rises and lower wage settlements.
The ONS figures showed average weekly earnings, excluding the effects of bonuses, over the three months to April were weaker, from a downwardly revised 5.5% to 5.2% year on year.
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Liz McKeown, ONS director of economic statistics, said: “There continues to be weakening in the labour market, with the number of people on payroll falling notably.
“Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”
The ONS data piles more pressure on Chancellor Rachel Reeves, just a day after she confirmed her winter fuel U-turn would cost £1.25bn.
She has consistently defenced her budget, arguing the taxes on business were a one-off necessary evil to account for a £22bn “black hole” in the public finances inherited from the last government.
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Employment minister Alison McGovern said in response to the data: “Six months after we launched Get Britain Working, we are already seeing the benefits with economic activity at a record high, with 500,000 more people in employment since we entered office and real wages growing more since July than in the decade after 2010.
“People all over the country are benefiting from increased training opportunities and the newly launched Jobs and Careers Service will allow us to test new and innovative approaches to personalise employment support.”
Despite the wage figure easing, that 5.2% level remains comfortably ahead of the 3.5% rate of the pace of price growth – inflation.
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Government commits £14.2bn to new nuclear power station
The curb to consumer spending power will be welcomed by the Bank of England as its rate-setters continue to fret that strong wage growth represents an inflation risk ahead.
The ONS figures did little to boost financial market expectations of a further rate cut next month.
LSEG data showed 90% of market participants believed there would be no no change – with just one further cut this year being fully priced in.
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