Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Britain's nuclear option

Written by Charlie Clegg, senior associate
Edited by Iain Gibson, associate partner

5 August 2021

Good morning,

Fire up the pipe. Get out the Gannex. Britain’s going nuclear. Again.

Almost 58 years ago Harold Wilson – then leader of the opposition – heralded the scientific revolution in whose “white heat” Britain would be re-forged. Wilson did not initiate the nuclear power infrastructure on which Britain still relies. He did, however, super-charge it. Or at least he tried.

Nuclear can still smack of the Wilson years’ misplaced ambitions. Investors and the UK government are, however, undeterred. A consortium led by Rolls-Royce has secured £210m towards building 17 “mini” nuclear power plants. This, they claim, will support 40,000 jobs across Britain. The consortium has secured match-funding from the UK government.

Despite the vagaries of fortune, nuclear power has, of course, never gone away. UK and devolved governments have side-lined coal-fired power stations for more environmentally-friendly options. With most of the UK’s nuclear power stations sto close by 2021, new nuclear stations are vital to bridge the gap.

As nuclear demand grows, the question of who builds these plants is becoming trickier. China’s state-owned energy company, China General Nuclear (CGN), is set to build a new plant at Bradwell-on-Sea in Essex and is also involved projects at Hinkley Point C in Somerset and Sizewell C in Suffolk.

Yet Beijing’s treatment of protestors in Hong King and minorities in Xinjiang is straining Sino-British relations. Insiders now understand the UK government is seeking to block CGN’s involvement in these sites. CGN are prepared to walk if threatened. It is not, however, clear how the UK could make up for such a loss of skills, especially as time and cost overruns have dogged recent projects.

Step forward small modular reactors (SMRs). These produce about one seventh of the energy of a conventional nuclear power station for, it is projected, about a tenth of Hinkley Point’s total cost. The prime minister’s ten-point plan to reach net zero champions such reactors.

Rolls-Royce claims the first reactor will power homes by 2030. This will be too late to bridge the immediate gap. It could, however, provide a longer-term, sustainable solution to the UK’s need for power.

The white heat of the scientific revolution may yet play a role in firing up the impending green revolution.

News

From Sunday, fully-vaccinated travellers returning to England, Scotland, and Northern Ireland from France will no longer need to quarantine. The move comes as part of a major shake-up of the UK’s traffic light system for international travel.

The UK-wide Joint Committee on Vaccination and Immunisation (JCVI) has extended the offer of first Covid vaccinations to 16 and 17-year-olds. Older teenagers will not need the approval of their parents or guardians for the jab.

Antisemitic hate crime in the UK has seen a record 50% increase so far this year. The figures, compiled by the Community Security Trust, showed spikes in incidents around the return to schools and around the height of recent tensions between Israel and Palestine. (£)

Business and economy

Shortages in materials and labour pose an increasing risk to the UK’s construction sector. The Royal Institute of Chartered Surveyors sounded the warning and claimed the shortage was acute in “white collar” construction jobs such as surveying.

The UK government has published a list of 191 companies who have failed to pay all staff at least the minimum wage. John Lewis criticised its own inclusion due to an administration error.

Shares in investment app Robinhood rose as much as 82% yesterday. This comes amid speculation the site, popular with amateur investors, is experiencing a similar frenzy to that seen by Gamestop in February.

Columns of note

Surveys of Who’s Who entries show “high-brow” pursuits are giving way to the “low-brow”. Is this the end of snobbery? In the Times, James Marriott doubts so. He suggests that snobbery does not disappear, it merely develops. Cultural elitism is sophisticated enough now to exist within genres, as opposed to distinguishing between them. (£)

What is Alexander Lukashenko doing? With record numbers of dissidents in prison and increasingly rogue tactics, the Belarusian dictator seems to welcome international uproar. In the Guardian, Andrew Wilson, professor of Ukrainian studies at University College London, argues Lukashenko may be using the “madman” theory of foreign policy. According to Wilson, Lukashenko may see his erratic behaviour as an asset to draw close to Putin’s Russia and defy a so-far feeble West.

Cartoon source: The New Yorker

Markets

What happened yesterday?

After a mixed bag of US economic data, Wall Street fell back with the S&P 500 down 0.5% after a record high on Tuesday. The Nasdaq Composite remained flat.

In Europe, the Stoxx 600 index rose 0.6%, having reached a new high in early trading. The FTSE 100 also climbed 0.3%. Technology, financial services, and travel, and leisure stocks led rises in European stocks.

Sterling was trading at 1.17EUR and 1.39USD.

Company news

Legal & General has reported £1.3bn in operating profits in the first half of this year, up 13% year-on-year.

Uber has reported a doubling of its profits to nearly $4bn. This is driven by the continuing growth of its delivery services and by a 105% increase in rides in the first quarter.

Rolls-Royce is selling Bergen Engines to defence contractor Langley after the Norwegian government blocked its sale to associates of Russia’s president Putin.

What’s happening today?

Finals
Brickability
Frasers Grp

Interims
Centamin PLC
Evraz
Glencore
Hammerson   
Ip Group
Meggitt          
Mondi
Rolls-Royce Holdings 
Secure Trust
Serco
Spirent
Synthomer
Tritax Big Box 
Tt Electronics
WPP   

AGMs
Baillie Gifford 
Bushveld Minerals
Dekel Agri
Investec
Larsen And Toubro
Naked Wine

GMs
Distil

UK economic announcements
(09:30) PMI Construction
(12:00) BoE Interest Rate Decision

Int. Economic Announcements
(07:00) Factory Orders (GER)
(13:30) Initial Jobless Claims (US)
(13:30) Continuing Claims (US)

Source: Financial Times

did you know

With only one exception of three years from 1714, members of the Onslow family represented Guildford in the House of Commons from 1660 to 1830. After that period, the next Onslow to be elected for Guildford was Guildford Onslow in 1858.

Parliamentary highlights

House of Commons

The House of Commons is in recess. The House will next sit on 6 September.

House of Lords 

The House of Lords is in recess. The House will next sit on 6 September.

Scottish parliament

The Scottish parliament is in recess until 30 August.

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