Hitachi’s abandonment of nuclear investment at Wylfa in Anglesey together with Foreign Secretary Dominic Raab’s harder line on human rights in China may do Britain’s struggling engineering warrior Rolls-Royce a favour.
For the last several years, the group’s researchers have been championing British-designed and manufactured small modular reactors (SMRs) to provide a solution to energy needs.
The Government has kept the project alive with modest R&D support, but way below that necessary to bring the it to fruition.
Rolls on the rocks: Rolls-Royce has been badly damaged by airport quarantines and plunging flying hours, the company’s most critical source of cash flow
As it looks at options ahead of the Treasury’s upcoming one-year spending review and an energy White Paper, SMRs are right up there in the nuclear mix.
The Government is looking at choices for financing next-generation nuclear to provide a low-carbon power base load as the current fleet is taken offline.
This includes direct government investment in a new super-reactor at Sizewell, the possibility of Chinese investment if national security safeguards can be met and, maybe, consumer involvement.
But it also recognises that SMRs could be an important part of the mix and may be ready to put in as much as £2billion if heavily constrained budgets – with health and education big priorities – can be stretched.
The benefits of SMRs are considerable. It would preserve jobs and engineering skills at Rolls-Royce which has been badly damaged by airport quarantines and plunging flying hours, its most critical source of cash flow.
It would help to keep Britain’s lights on and factories working when the wind fails to blow, and, excitingly, could open an industrial technology export market for the UK.
It shouldn’t be forgotten that Britain was a pioneer in atomic power with the opening of Calder Hall at Sellafield in 1956.
What began in the UK was aped around the world, with France becoming a dominant player in Europe, with EDF the lead investor at Hinkley in Somerset.
As welcome as French inward investment has proven, how much better it would be if the UK took control of its own destiny with SMRs. It is a forward-looking project which even Luddites in the trades union movement could get behind.
Tesco has had a good pandemic. It has ratcheted up staff, supercharged online sales and demonstrated it can compete with the no-frills rivals Lidl and Aldi.
In a year when dividends have been the first thing to go, the payout, partly funded by the break on business rates, has been lifted by 21 per cent. Nevertheless, the share price performance has been vapid.
Former chief executive Dave Lewis earned superstar status for bringing the group back from the pits after the audit scandal.
But at a time when other global retailers, notably Walmart, have identified Asia for expansion, Lewis pulled up anchor.
Proceeds from Thailand and Malaysia will enable successor Ken Murphy to reward investors and bolster the pension fund but will leave it much more exposed to Britain and underwhelming eastern European markets.
The Tesco Bank, once seen as a big challenger to the High Street players, lost £155million in the first half.
With so many new players who have wizard technology, ranging from Monzo to Apple Pay, it is starting to look a lost cause.
Tech is Tesco’s biggest problem. Online sales may be up 16 per cent but we have little idea how profitable this is.
It is up against the robotics of Ocado, Amazon Fresh and a revitalised Waitrose – all with advanced IT.
Wrestling with Asda and no-frills, expanding German chains is not going to put much pizzazz into performance.
When Sainsbury’s was making the case for its abortive merger with Asda, which was blocked last year, it made much of the fact that it was facing competition from ready-food home delivery.
Shares in Amsterdam-quoted Just Eat Takeaway (which has just absorbed Grubhub in a £5.4billion deal) are up 16 per cent this year and Delivery Hero has advanced 42 per cent.
All of this ought to be encouraging for UK rival Deliveroo, valued at £1.6billion at the start of the year and now heading for a £4billion London float in 2021.
That is roughly the value of Sainsbury’s.
Maybe former boss Mike Coupe, now the Covid testing czar, was on to something.
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