Households across the United Kingdom will see their energy bills increase by approximately £2 billion per year to fund subsidies for new nuclear power stations built by French energy giant EDF.
Details of the Nuclear Funding Mechanism
The substantial increase will be delivered through two separate financial mechanisms. The first will see £1 billion in annual payments directed to EDF as soon as the Hinkley Point C plant in Somerset begins generating electricity, which is currently scheduled for 2030.
Separately, a further £1 billion per year will be added to consumer bills via a dedicated nuclear levy. This charge is designed to fund the construction of the Sizewell C project in Suffolk, another 3.2 gigawatt nuclear power station also led by EDF.
Government Stance and Political Reaction
A spokesperson for the Labour Party government defended the investment, stating: “We are reversing a legacy of no new nuclear power being delivered to unlock a golden age of nuclear, securing thousands of good, skilled jobs and billions in investment.”
This commitment comes alongside other budgetary measures aimed at household finances. The Chancellor, Rachel Reeves, announced she was taking action to reduce the cost of living, with a £150 cut from the average annual energy bill set to take effect next year.
Ms Reeves stated this saving would be achieved by scrapping the ECO (Energy Company Obligation) scheme, which was introduced under the previous Conservative government. She claimed that scheme had cost households £1.7 billion a year on their energy bills.
Criticism from Northern Ireland
Despite the announced cut, the Budget faced sharp criticism from leaders in Northern Ireland. First Minister Michelle O’Neill described it as a “missed opportunity to tackle the soaring cost of living.”
She argued that instead of “real action” to bring down bills, many people would now face higher tax bills in the coming year. While she welcomed the removal of the two-child benefit cap as “welcome progress,” she said Prime Minister Sir Keir Starmer and Chancellor Reeves had “failed to deliver a budget that truly supports families and workers through the cost of living crisis.”
Stormont Finance Minister John O’Dowd added that the Budget “doesn’t go far enough” for Northern Ireland in terms of investing in public services and boosting growth. He said it strengthened the case for greater fiscal devolution. The UK Government confirmed that Stormont would receive an extra £370 million to spend.
