The Brexit decision has caused uncertainty over the future of the Hinkley Point project

Brexit fallout: Hinkley Point threatened; other companies weigh options

The Hinkley Point nuclear power station project could become a casualty of Brexit, a government adviser has told The Times.

The £18bn plans to build the new plant in Somerset could be cancelled now that Britain has voted to leave the EU.

Paul Dorfman, senior research fellow at University College London, said it is ‘extremely unlikely’ that French energy giant EDF will continue with its plans, in the latest of a series of delays for the development.

"How can EDF invest billions when there is so much uncertainty?" he said.

Angus Brendan MacNeil MP, chairman of the Commons energy and climate select committee said Hinkley is "bedevilled by uncertainty".

"Until last week... EDF was investing in another EU member state. Now that is no longer the case," he told The Times.

The plant was originally set to be completed by 2017 but will now not generate power until at least 2025, after issues with funding and French unions.

However, EDF has insisted Brexit will have no impact and told The Times: "EDF confirms its commitment to the Hinkley Point project, which continues."

The impact of Brexit upon the Chinese National Nuclear Corporation’s involvement in the project remains to be seen, but it was due to work with China General Nuclear Power Corporation to take a joint 33.5 per cent stake in the plant. It is unlikely it would remain involved if EDF were forced to pull out.

The amount of damage caused by the Brexit vote remains to be seen, but Hinkley Point will probably not be the last casualty from the UK’s decision to pull out of the EU.

While Rolls-Royce has reaffirmed its commitment to the UK since Friday, it warned that longer-term assurances would depend on a post-Brexit deal.

The jet and engine maker said that the result was "not the outcome the company would have chosen", but added that it "remains committed" to Britain, where it employs 23,000 people.

Earlier this month, the chief executive told his British staff that the company was better off in the EU and warned that a Brexit vote could result in it delaying decisions like whether to invest in a new aero-engine testing facility at its plant in Derby, northern England.

"Although this is not the outcome the company would have chosen, Rolls-Royce remains committed to the United Kingdom where we are headquartered, directly employ over 23,000 talented and committed workers and where we carry out a significant majority of our research and development,” the company said in a statement.

"The UK's decision will have no immediate impact on our day-to-day business. The medium and long-term effect will depend upon the relationships that are established between the UK, the EU and the rest of the world over the coming years.”

The firm said that its outlook for the year ahead is unchanged and that currency movements would boost underlying revenues by around £400m and improve underlying profit before tax by around £40m.

It revealed in February that annual profits tumbled by 12 per cent to £1.4bn in 2015, but this was less than feared as the firm's cost-cutting began to take effect.

Meanwhile, Britain's tech start-up scene, which has been booming in 2015 so far, has been severely shaken by the Brexit result.

High-profile companies are threatening to pull out or slow down plans to enter the UK market; international employees are second-guessing their immigration standing, and investors could cut new funding that is the lifeblood of young tech firms.

Market researchers are predicting a sharp slowdown in UK technology and advertising spending and the longer-term threat that sizeable portions of these budgets will move to the continent.

"Nothing's changed yet, but everything's changed," said Taavet Hinrikus, Estonian CEO of cross-border money service Transferwise, which is based in London.

London has become a magnet for tech entrepreneurs looking to do business in the EU and a global launch pad for firms aiming to compete with US and Asian web giants. Half the founders of London's top tech start-ups come from outside Britain.

One-third of recent European investments by venture capitalists, who are often drawn to tech startups, were made in Britain. In the first quarter, UK firms drew in £984m in funding, while the rest of Europe took £1.65bn , according to research firm CBInsights.

"The two main benefits of being part of the EU are access to talent because of the free movement of labour and the fact that you can 'passport' regulation so if you're regulated in the UK, you're regulated across the EU," said Hinrikus. "We don't know what's going to happen with either of those."

The Transferwise CEO now says "it's too early to say" what the company may do, but did say before the referendum that his company could scale back further investment in London and consider moving its headquarters if Britain voted to leave the EU.

For immediate reactions from the engineering and technology sectors following the outcome of the referendum on Friday, see E&T’s reaction piece.

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