Civil nuclear’s £6.4 billion contribution to UK economy – new Oxford Economics study

Posted On: 
1st December 2017

A new study released today shows that the UK’s civil nuclear sector contributed £6.4 billion to the UK economy last year – equivalent to the aerospace manufacturing industry; and its 65,000 employees are part of one of the most productive workforces in the country.

The study, compiled by experts Oxford Economics, commissioned by the Nuclear Industry Association, shows this economic impact increases to £12.4 billion and 155,000 jobs when the sector’s spend on associated goods and services in the supply chain and the wage spend by employees is taken into account.

Each nuclear sector employee contributes an average of £96,600 in gross value added (GVA) to the economy, 73% higher than the UK average, reflecting the highly-skilled nature of the workforce and the use of advanced technologies. 

This direct impact, while accounting for 0.3% of UK GDP, also generates substantial sums in taxes paid to the Exchequer, with the report estimating the sector paid around £2.8 billion in tax payments in 2016, rising to £4.5 billion when associated spend is included.

For more than 60 years the UK’s civil nuclear sector has provided reliable low carbon electricity to homes, public services and businesses across the country. This means a strong and embedded supply chain which is in all parts of the UK, serving power stations, new build developments and decommissioning.

The benefits of the civil nuclear sector are felt across the country with the industry’s activities supporting £1 in every £50 of economic output in the north west and south west of England.

Unsurprisingly, the north west of England, home to Sellafield, the National Nuclear Laboratory and Heysham power station, as well as Urenco at Capenhurst and Springfields fuel plant, sees the largest regional impact. Some £4.3 billion in GVA was contributed by the sector across this region in 2016 – the equivalent to 2.7% of all regional output.

The south west of England, home to the construction of the new power station at Hinkley Point C, as well as decommissioning sites and some of the existing generating fleet, saw the next largest impact, totalling £1.6 billion.

The data is released as part of the NIA’s first Nuclear Activity Report which outlines the progress made across the nuclear sector in 2016, including:

  • A saving of 22.7 metric tonnes of CO2 from nuclear operations – the equivalent of removing one third of the UK’s cars from the road
  • An increase in output from nuclear stations of 4.5TWh meaning nuclear remained the largest single low carbon source of electricity in the UK.
  • Producing enough electricity to power 16.3 million homes
  • Beginning construction of the first new nuclear power station in a generation at Hinkley Point C
  • Significant contracts in the UK and overseas being awarded to UK supply chain companies
  • Cost savings made across all decommissioning projects, including more than £200 million at Sellafield

Tom Greatrex, Chief Executive of the Nuclear Industry Association, said:

“For the first time we have comprehensive data which shows the important role the UK’s civil nuclear sector plays in generating highly skilled and well paid jobs, making a significant contribution to the economy and supplying low carbon electricity to keep the lights on.

“The nature of the nuclear sector means it creates wealth and prosperity across the country – supporting families and non-nuclear businesses in areas where traditionally jobs have been hard to come by.

“But, with all but one of our nuclear power stations due to close in the period up to 2030, industry and government cannot be complacent. We need to build new nuclear power to replace the retiring stations and continue to make significant progress with decommissioning.

“The UK’s nuclear sector is a vital part of the UK’s industrial heritage and the government’s Industrial Strategy and the work being undertaken to bring forward a Nuclear Sector Deal will be vital to underpinning and ultimately increasing this contribution.”