Budget: UK government to buy Wylfa site in £160m deal

The UK government is to buy a site on Anglesey where a planned nuclear project was scrapped in 2019.

Chancellor Jeremy Hunt said ministers have reached agreement with its previous developer Hitachi to buy its Wylfa site.

There are hopes that proposals for a new nuclear power plant on the island can be revived.

Labour questioned whether any scheme will materialise without a timeline and process for a new project.

The Welsh government, which has been promised an extra £170m in funding, said the budget was "really disappointing" because there was "nothing new" for Wales.

Mr Hunt made the announcement in his budget on Wednesday.

Referring to the island by its Welsh-language and constituency name, Mr Hunt told the Commons: "Ynys Môn has a vital role in developing our nuclear ambitions."

Hitachi abandoned its plans for a new nuclear power plant at Wylfa four years ago, because of rising costs.

Mr Hunt said the deal would cost £160m, which includes the Oldbury site in Gloucestershire.

Budget documents say no decision has been taken on future projects.

The chancellor said the budget will result in nearly £170m in extra funding for Welsh government, which has an annual budget of £20bn.

The Federation of Small Businesses called for the cash to be used to reinstate 75% business rate relief aimed at small businesses in retail and hospitality, in line with England.

The Welsh government is reducing it from 75% to 40% as part of a bid to tackle rising costs in public services.

The UK government's roadmap for nuclear power includes plans for a new power station as big as the one currently being built at Hinkley in Somerset.

It would be capable of powering six million homes.

There are also plans for a series of small modular reactors (SMRs), which can be partly assembled off site and are cheaper.

Mr Hunt said that companies had until June to submit their initial tenders to build them.

Wylfa is a site deemed suitable for both a big nuclear development and a number of SMRs.

Talks have been previously reported with groups wanting to build a new nuclear plat on Anglesey, including a consortium involving a US engineering firm Bechtel.

In Mr Hunt's announcement employee national insurance will be cut by a further 2p - worth £33 per month to someone on an average salary in Wales of just over £32,000.

It was already cut by 2p at the last autumn statement.

Alcohol duty will continue to be frozen until February 2025 - it had been due to end in August. Fuel duty will remain frozen until March 2025.

And a new tax on vaping products will start in October 2026.

A decision to scrap stamp duty relief for buying more than one residential property will be England only - Wales operates its own version called land transaction tax, and it will be for Welsh ministers to copy the move if they wish.

Mr Hunt said the UK government would give £1.6m to Theatre Clwyd for renovations and that Rhyl would receive £20m in levelling up cash.

Both Vale of Clwyd and Ynys Môn are seats won by the Conservatives from Labour at the last general election in 2019.

A total of £5m will be given to Newport, and £10m for Venue Cymru in Llandudno.

Ynys Môn Conservative MP Virginia Crosbie welcomed the news to purchase the Wylfa site, adding that "more hard work is needed to ensure further progress is made and spades are in the ground as soon as possible".

Tom Greatrex, chief executive of the Nuclear Industry Association, said: "This is a pivotal moment for the future of nuclear in the UK and should mark the beginning of new projects at these sites."

Mr Hunt's budget offers £5m for an "agrifood launchpad in mid-Wales" - it was not explained what that will involve.

Welsh Secretary David TC Davies said: "This is a budget that puts more money in the pockets of millions of people and shows that the UK government continues to deliver for people across Wales."

But Welsh government finance minister Rebecca Evans said the £168m of extra funding coming to Wales "was money we had already known about and already factored into our plans".

"Unfortunately, [there is] nothing new for public services and critically no more capital investment for us here in Wales," she added.

Cutting National Insurance was a "very uneven thing to do", she said, because it disproportionately benefits the most well-off workers.

She said the Welsh government was "very keen to engage with the UK government" over the Wylfa site, but had no advance warning about the deal to buy it.

On multiple dwelling relief in stamp duty, she said the government had "already started thinking" about changes in land transaction tax, particularly to benefit registered social landlords.

Labour's shadow Welsh secretary Jo Stevens: "A belated purchase is one thing but without a timeline and process for new nuclear at the site, why would anyone trust this chaotic government to deliver anything?"

Plaid Cymru's Ben Lake accused the government of having "little intention to address the many pressing issues facing society".

"People are fed up of seeing public services crumbling around them due to a lack of public investment," Mr Lake has said.

By Shelley Phelps, BBC Wales Westminster correspondent

The Welsh Secretary David TC Davies has previously said there was unlikely to be a single "green light" announcement on new nuclear at Wylfa and instead a "series of amber lights" taking the UK "gently towards" that goal.

Today feels like one of those amber lights.

But there would need to be a lot more of those - and a lot more money - for anything to get up and running.

A key question for decision makers is what type of project to host at the site. A large scale power plant? Smaller scale SMRs? Both?

A general election is fast approaching - but UK Labour policy is also to support new nuclear.