Don’t get in the way of growth, Rolls-Royce boss warns Reeves

Tufan Erginbilgic urges Chancellor to support British technologies as Budget looms

The chief executive of Rolls-Royce has urged Rachel Reeves not to “get in the way” of economic growth as the Chancellor prepares for a tax raid on businesses in her maiden Budget on Wednesday.
Tufan Erginbilgic said the Chancellor should support businesses and move “at an accelerated pace” to back pioneering British technologies, including the mini nuclear reactors his company is developing.
Mr Erginbilgic told The Telegraph: “This Government very powerfully made the point that economic growth is the first priority.
“If you look at the UK, it has been lagging behind key competitors. So I think whatever the policies are, we should make sure that they actually support economic growth – and that is the big point.
“It needs to support productivity improvements, therefore infrastructure is important.
“That’s hopefully what the Budget will do, rather than policies which may actually get in the way of economic growth.”
His remarks come as Ms Reeves prepares for what is expected to be the biggest tax-raising Budget in history, targeting businesses and the wealthy. The Chancellor is expected to hit businesses with a rise in national insurance contributions.
Mr Erginbilgic was speaking in Prague as Rolls-Royce signed a deal in the Czech Republic to deploy around six small modular reactors (SMRs) in a European first. A delayed, parallel SMR competition in the UK is still rumbling on.
Mr Erginbilgic backed efforts by ministers to slash planning red tape and tackle regulatory delays, which have been blamed for restricting Britain’s ability to build things.
“It needs to be speeding up, absolutely,” he said. “Because, frankly, you can run these processes rigorously and robustly, but also at an accelerated pace.
“That’s what businesses do, right? We don’t cut corners. We do things in a very robust manner, but a lot faster [than the Government]. So that’s what needs to happen.”
On Tuesday, the chief executive appeared with Czech prime minister Petr Fiala to sign a major deal between Rolls-Royce’s SMR business and CEZ, the state-owned energy company.
Under the agreement, CEZ has ordered up to three gigawatts of SMR reactors from Rolls-Royce – equivalent to roughly six mini reactors – and will become a “strategic partner” of the business.
This will see the Czech state company take a stake of roughly 20pc in Rolls-Royce SMR for “hundreds of millions of pounds”, joining a list of investors that also includes a Qatari sovereign wealth fund, American utility giant Constellation Energy and the billionaire Perrodo family, a French clan who made their money in oil.
Early work to build the first SMR is to begin next year in Temelin, southern Czechia, where there is already a large nuclear power station.
The CEZ stake is thought to have come out of Rolls-Royce’s previous holding in the SMR venture, which stood at 76pc in 2023 according to filings on Companies House. That would still leave Rolls-Royce with more than 50pc of the business overall.
Speaking at a press conference, Mr Fiala said: “We do not want to only purchase [SMR] technology, but also to partner in development and production.”
Czech taxpayers now stand to benefit from any future profits in the business, while the British Government is yet to fully back the technology.
The UK provided £210m in grant funding to Rolls-Royce for early SMR development but did not take an equity stake at the time.
Rolls-Royce is currently battling against three other shortlisted companies in an SMR design competition being run by government agency Great British Nuclear (GBN), with at least two winners expected to be chosen by late this year or early 2025.
The victors will be awarded sites and funding to develop the first SMRs in the UK, to be switched on in the early to mid-2030s.
Mr Erginbilgic said: “The GBN process has already been delayed, so I think it now needs to move forward in a speedy manner.”
The Rolls-Royce boss added that he would be “open” to the UK Government investing in Rolls-Royce SMR but said no conversations with state-owned energy company, GB Energy, had taken place.
Speaking at the ceremony in Prague, British ambassador Matt Field said: “The new UK Government’s number one objective is economic growth… and Rolls-Royce SMR epitomises the sort of company that we want to support through our emerging industrial strategy.
“It is innovative, it is sustainable, it is growing. And we see SMRs as a key mechanism for delivering clean, affordable and reliable energy for all.
“It will enhance our energy security, and we believe it will unlock tremendous opportunities in the nuclear supply chain in both our countries, and bring potential for jobs.”