US nuclear giant pulls out of race to build Britain's first mini-nukes
The four companies remaining in the contest were given a deadline of mid-April to make their final bids, but The Telegraph understands that Westinghouse did not submit one following a negotiation process.
It means only three finalists – Rolls-Royce, GE-Hitachi and Holtec – remain in the running.
Great British Nuclear (GBN), the quango responsible for the SMR programme, was expected to announce two winners this summer with bidders told to prepare to build three to four mini reactors each.
Westinghouse did not deny it had withdrawn on Friday but declined to give its reasons.
One industry source suggested the company had baulked at the commercial offer made by the Government.
GBN previously advertised contracts worth £20bn in total for SMR 'technology partners', a figure that is understood to be based on the assumption two winners would be chosen.
However, The Telegraph revealed in February that the Government was considering awarding a contract to only one company as Rachel Reeves, the Chancellor, looks to make savings in her cross-departmental spending review.
The Chancellor is struggling to balance the books as weak economic growth makes it harder to meet her self-imposed 'fiscal rules' for borrowing.
SMR supporters claim they could be a breakthrough in nuclear power because they would be made predominantly in factories and then assembled on site, cutting building times from around a decade to a few years. In theory this could cut costs – as would-be builders of SMRS have repeatedly promised..
Many politicians have snapped up that bait. When he opened the latest stage of the SMR competition, Mr Miliband said: 'Small modular reactors will support our mission to become a clean energy superpower.'
However, the nuclear industry has a mixed record on bringing in key projects on time and on budget.
The biggest current example is the UK's Hinkley Point C power station in Somerset which EDF originally said would cost under £20bn and be operating by now. Current costs estimates are for a final price approaching £50bn and a start-up after 2030.
There are growing fears that the economics of SMRs could prove even harder to justify – because they have many of the same problems as large reactors – meaning security and waste disposal – but produce far less electricity and so make less money.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
an hour ago
- Telegraph
The tax traps Reeves must fix to grow the economy
It is no secret that Rachel Reeves is strapped for cash. Against a backdrop of rising inflation and weak growth, the Chancellor is staring down a black hole that some predict could be as high as £50bn. Worse still, some efforts to save money have already been killed off by Labour backbenchers, while bond market vigilantes have driven up Britain's borrowing costs to their highest level since the 1990s. That is without even taking into account the impact of Reeves's Budget tax raid last year, which has crushed business confidence and dampened investment. All of which means that the Chancellor is now scrambling for reforms that will boost the economy at minimal cost. Here are some of her options. Clean up the income tax trap The top rate of income tax is supposed to be 45pc, but for those earning between £100,000 and just over £125,000, it is in effect 60pc. That is because workers in this bracket lose the tax-free allowance, which applies to the first £12,570 of pay for workers on lower incomes. As a result, it can appear rather unattractive to earn more if most of this extra income will be taken by the taxman. 'Where we have these kinks in the income tax schedule, those will tend to act as a disincentive to people to work more – I might not want to take that promotion, or I might want to go four days a week,' says Isaac Delestre, at the Institute for Fiscal Studies (IFS). Scrapping this baffling tax quirk would help ease the pain. Smooth out benefits Losing child benefit can see families' effective tax rate rise to almost 60pc. This applies when one parent in a three-child household earns between £60,000 and £80,000. Believe it or not, that is an improvement on the old situation. Before Conservative reforms, a family with three children faced a tax rate of more than 70pc. Jeremy Hunt, the chancellor at the time, called the system 'confusing and unfair'. Following changes introduced by the Tories, the Office for Budget Responsibility (OBR) calculated reforms would encourage parents to work more hours, amounting to the equivalent of an extra 10,000 full-time jobs. However, perhaps the most egregious tax trap applies to adults with young children. The Government has ramped up subsidies for childcare in recent years to try to get more parents back to work. Yet for a cohort of highly productive workers, the way the system operates can be an enormous disincentive to seek out a promotion or put in extra hours. That is because the support schemes are withdrawn entirely once one parent's taxable income rises above £100,000. It means an extra penny of earnings can cost a family with two young children £14,500 in disposable income, according to the IFS. The think tank estimates that their disposable income – after tax and childcare – will not recover to its previous level until the parent earns £134,500. These parents have an enormous incentive to cut their taxable income, whether by pouring money into their pension to reduce their taxable income or by cutting the number of days they work each week. Turning the cliff edge into a smooth slope might cost the Treasury money, but would no doubt ease families' worries. Ramp up VAT Companies face similar cliff edges. Small businesses have to register for VAT when their turnover hits £90,000. That creates a huge incentive to stay below that threshold. Businesses and sole traders often stop earning once they edge closer to the limit as they seek to avoid the threat of introducing a 20pc tax on sales. Whether that means working only four days a week or closing for a month to keep takings down, it undermines growth in their business and the wider economy. The Conservatives cited this 'bunching' as a reason to raise the threshold from £85,000, but that just shifted the problem instead of abolishing it. Slashing the threshold would be a blow to small businesses and their customers, but might encourage more growth in the long term by removing it as a barrier altogether. That was the argument of the Resolution Foundation when it was run by Torsten Bell, now a Treasury minister. The think tank previously called the high threshold 'a tax on growth', claiming that: 'The best outcome would be lowering it to the point where almost no business owner would consider the option of deliberately staying below that level of turnover.' Cutting it to £30,000 could raise £1.5bn for Reeves. Cut stamp duty To say that reform of property tax is overdue is an understatement. The IFS has described council tax, which is still based on valuations from 1991, as 'out of date, regressive and distortionary'. The think tank has also branded stamp duty one of Britain's most hated taxes because it penalises people for moving. Back in 1988, a typical homeowner moved house every nine years, according to property website Zoopla. In the first six months of 2022, the gap was 21 years. The International Monetary Fund (IMF) has previously urged the UK to move away from 'transaction taxes which constrain housing and labour mobility'. Instead of a property sales tax, the Fund suggested adopting a new annual levy based on land or property values – a system some argue this would be fairer. After all, the average London house price is now more than seven times what it was in 1991, compared with a four-fold increase in the North East, according to the Office for National Statistics. At the same time, the distribution of central government funding to local authorities is still based on property values in 1991. This effectively means councils in Newcastle must now levy more tax on a property worth £250,000 than in Kensington and Chelsea to deliver essentially the same on valuations. However, as the think tank points out, any major revaluation would produce winners and losers. Back in 2020, the IFS suggested that a simple revaluation that reflected relative increases in property values would hit homeowners primarily in London and the South East. Back then, it said residents in Hackney and Wandsworth could see increases in their bills of up to 45pc, while people living in Fylde near Blackpool could see a 15pc reduction. A more radical reform that linked bills proportionally to a property's value could see bills in Stoke-on-Trent slashed in half. But it would also see bills quadruple in Kensington and almost double in parts of Surrey. There was a reason that Margaret Thatcher backed away from a poll tax. ... and planning red tape It is not just moving house that matters. Building them would boost the economy too. That is why bats and newts are high up on Reeves's hit list. The Chancellor has repeatedly grumbled about the many obstacles to getting things built in Britain, telling the House of Lords economic affairs committee last month that she cares 'more about getting a young family on the housing ladder than I do about protecting some snails'. She has a point. In a now infamous example, the chairman of the HS2 rail line admitted it was spending £100m on a shield to protect bats in ancient woodland in Buckinghamshire. Sir John Thompson said this was just one example of 8,276 'consents' required from public bodies, and expressed frustration at red tape across the UK. Reeves also knows there is a big prize on offer if she manages to reduce bureaucracy. The OBR said Labour's planning reforms were already expected to drive an increase in housebuilding of 170,000 homes until the end of the decade, which would in turn increase Britain's medium-term growth prospects by 0.2pc. Reeves has since ordered officials in the Treasury to go further. Prepare for more red tape to be slashed.
Telegraph
an hour ago
- Telegraph
Reeves plots new capital gains tax on expensive homes
Owners of expensive homes could be hit with capital gains tax when they sell their properties under plans reportedly being drawn up by Rachel Reeves. The Chancellor is said to be considering ending private residence relief, which exempts people from capital gains tax when they sell their primary home, for properties above a certain value. Higher rate taxpayers would pay 24 per cent of the value of any gain they make while basic rate taxpayers would have to pay 18 per cent, according to The Times. It comes after The Telegraph reported on Monday that Ms Reeves is drawing up plans for a fresh raid on homeowners, with annual levies and a mansion tax being pushed forward as options by Treasury officials. The plans have echoes of a mansion tax proposed by Ed Miliband when he was Labour leader, which proposed an annual charge on expensive homes. The Chancellor is scrambling to fill a black hole of up to £50 billion in the public finances caused by welfare U-turns and slower than expected economic growth. Labour pledged not to raise income tax, national insurance or VAT in its manifesto, which means it is looking at property taxes as an alternative. A property value threshold of £1.5 million for any new levy would affect around 120,000 homeowners who would be hit with a bill of almost £200,000 if they try to move. Property experts warned the Chancellor any such levy would undermine her attempts to boost economic growth as it would jam up the housing market by stopping people moving. Older people downsizing could also be badly hit. Aneisha Beveridge, head of research at the estate agent Hamptons, told The Times: 'It's a big change that would hit long-term owners hardest and create a cliff-edge at £1.5 million, distorting behaviour around that point. 'While the headline gains look substantial, they're often the result of decades of ownership and, in some cases, house prices haven't even kept pace with inflation. 'For households who don't need to move, this could act as a strong disincentive to sell, dampening transactions and potentially weighing on house price growth and Treasury revenues alike.' It comes after The Guardian reported stamp duty could be replaced with a levy on the sale of homes worth more than £500,000. Those proposals were inspired by a report from the think tank Onward, which backed an annual rate of 0.54 per cent for properties worth between £500,000 and £1 million, and 0.81 per cent one on values above that, to be paid when a property is sold. A Treasury spokesperson said the department does not comment on future tax changes. They added: 'We are committed to keeping taxes for working people as low as possible, which is why at last Autumn's Budget, we protected working people's payslips and kept our promise not to raise the basic, higher or additional rates of Income Tax, employee National Insurance, or VAT.'
Daily Mirror
7 hours ago
- Daily Mirror
Worrying number of pubs and restaurants that have put prices up revealed
Tax increases announced by Labour to tackle a hole in the public finances have led to price increases and job cuts throughout the hospitality sector, say bosses, as they called for help from the Chancellor Nearly eight out of 10 pubs, restaurants and others have upped prices as a direct result of government triggered cost increases, research has revealed. More than half of hospitality firms questioned said they had also cut staff numbers since April's increase in employers' national insurance and the minimum wage. Labour Chancellor Rachel Reeves insisted tax increases were needed to try to plug a hole in the public finances left by the Tories. The results come as trade bodies joined forces to urge Labour to ease the pressure on the sector, amid fears of worse to come. Industry chiefs say April's increases have added £3.4billion a year to costs, and resulted in 84,000 jobs being lost since last year's autumn Budget. The British Institute of Innkeeping, the British Beer & Pub Association, UKHospitality and Hospitality Ulster came together to make a fresh plea. In a joint statement, they said: 'This shocking data reinforces the urgent need for government to recognise the incredible pressure hospitality businesses have been put under, particularly since April, and illustrates why it should come forward with measures to support this vital sector at the Budget. 'Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people. It is forcing businesses across the sector to make impossible decisions to cut jobs, put up prices, reduce opening hours and sadly limit the support they desperately want to give their communities. 'Hospitality is united in which measures will reverse this trend and drive growth: a reduction in VAT for hospitality, changes to employer NICs and permanently lower business rates for the sector. Now is the time to act and back a vital British sector that supports the economy, jobs, and local communities. We urge the Government to do so at the Budget this autumn.' It follows recent figures showing nearly five pubs were lost for good across Britain every week in the first half of this year, with more than 600 standing empty long term. It takes the number of pubs that have closed since 2016 to almost 5,000, according to data from the Campaign for Real Ale (Camra). There have also been warning about the impact of tax rises on the high street too. The number of high street firms going bust is on track to surge by more than a quarter this year, experts have warned. The latest casualty is Claire's Accessories, which has gone into administration, threatening more than 2,000 job losses. Bargain chain Poundland has also announced a number of store closures. Industry experts Kroll said: 'Our data suggests that at current levels, there will be a 25% increase in retail failures year-on-year.' Latest data also suggests a rise in private schools going under after the government added VAT to fees. However, figures from the Insolvency Service showed only a small rise in business failures despite tax rises and the weak state of the economy. Official data showed there were 2,081 company insolvencies in England and Wales in July, edging up by 1% compared with June. Experts said firms are being challenged by 'relentless uncertainty' in the global economic environment. Simon Edel, UK turnaround and restructuring strategy partner at EY-Parthenon, said: 'Many businesses are also contending with higher costs including recent increases to employer national insurance contributions and the national living wage. "With interest rates still relatively high - alongside significant working capital demands and a constrained credit environment - liquidity pressures are intensifying for more UK companies. This is causing more businesses to call time.' A government spokesperson said: 'Our Plan for Change recognises the vital importance of pubs, cafes and restaurants to local communities. 'That's why we're cutting the cost of licensing, helping more pubs, cafes and restaurants offer pavement drinks and al fresco dining and extending business relief for these businesses - on top of cutting alcohol duty on draught pints and capping corporation tax.' The government has said small businesses will not see a rise in National Insurance Contributions (NICs) and that any rise in NICs will help pay for the NHS.
