The Chancellor described the signing of a contract to advance development of the UK’s first mini nuclear reactors as “more important than ever” given the current Middle East crisis. The Government-owned company Great British Energy – Nuclear (GBE-N) confirmed the agreement with a subsidiary of engineering giant Rolls-Royce on Monday, enabling immediate commencement of work on three small modular reactors (SMRs).
These compact nuclear power facilities – the first one to be built in the UK will be located at Wylfa on Anglesey – are designed to be installed on site as prefabricated modules.
The expectation is that the technology can be constructed more rapidly than conventional plants, such as Hinkley Point C.
The Government stated the initiative will bolster UK efforts to deploy clean power, which it maintains will reduce costs and strengthen energy independence.
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The announcement comes as UK households and businesses grapple with escalating expenses as the continuing Iran conflict pushes up global fossil fuel prices.
Speaking following the contract signing at the Treasury on Monday, Rachel Reeves said: “In the context which we are today, it shows how important a contract like this, technology like this, is.
“If we can produce more homegrown electricity here in the uk, that takes us off the rollarcoaster of global oil and gas prices.
“If we have greater control over the energy that we need here at home, it makes us less vulnerable in the face of shocks like we’re seeing at the moment.
“And so this was always the right thing to do but in the world in which we live today, where there is less security and there is more volatility, this deal is more important than ever.”
The Government stated the three SMRs should be capable of generating sufficient low-carbon electricity to power approximately three million homes, with expectations they will become operational by the mid-2030s.
Energy Security and Net Zero Secretary Ed Miliband during a reception in 11 Downing Street -Credit:PA
The scheme will also create around 3,000 jobs during peak construction, alongside thousands more throughout the supply chain, according to ministers.
Ms Reeves’ remarks followed a ceremonial signing at the Treasury on Monday between Simon Roddy, chief executive of GBE-N, and Chris Cholerton, chief executive of Rolls-Royce SMR.
Mr Roddy also signed an agreement with Oliver Holbourn, chief executive of the National Wealth Fund, which intends to invest up to £599 million to support the subsequent phases of designing the SMRs.
The drive for fresh nuclear capacity represents a departure from decades of underinvestment in Britain’s nuclear sector, resulting in ageing infrastructure as older plants near the end of their operational lives.
Energy Secretary Ed Miliband, who was also present at the signing, said reducing Britain’s reliance on volatile fossil fuel markets is the “unavoidable lesson of this war”.
“That is why this Government is doubling down, not backing down, on our clean power mission, drive for renewables and nuclear,” he said. “We’re ending years of delay with the biggest nuclear building programme in half a century from Sizewell C to this first fleet of SMRs.”
Both the Chancellor and Energy Secretary also met with apprentices from GBE-N and Rolls-Royce SMR during the occasion.
Chancellor of the Exchequer Rachel Reeves meets Rolls Royce apprentices -Credit:© 2026 PA Media, All Rights Reserved
“Hope for the future is what I think this project can provide,” Mr Miliband said.
“It brings hope to communities seeing investment to those areas. I can see the hope in the young apprentices that we have here.
“And building clean power meets the hopes of parents and grandparents who want to know we’re doing the right thing for future generations.”
Aerial view of the Wylfa site on Anglesey
The Government selected Rolls-Royce SMR as its preferred partner for delivering the modular reactor technology last June, following a competitive tender process.
Ministers committed £2.6 billion towards the programme and subsequently confirmed that Wylfa in North Wales would host the first SMR nuclear power station, to be constructed by GBE-N.
Chancellor of the Exchequer Rachel Reeves with Oliver Holbourn, CEO of the national Wealth Fund (left) and Chris Cholerton of Rolls Royce SMR (right) after they signed a deal -Credit:PA
Since June, Rolls-Royce has been collaborating with GBE-N to finalise contractual arrangements, which will bind both parties to delivering the scheme against a series of critical milestones, according to ministers.
This begins with site-specific design work, regulatory engagement and planning procedures, ahead of a final decision on whether to approve the capital investment required to commence construction.
Throughout the years, detractors have highlighted nuclear power’s substantial costs and protracted construction timescales, alongside ongoing concerns regarding nuclear waste disposal.
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