Thousands of jobs that were to have been created in Britain to build the next generation of nuclear power plants could be heading overseas instead, after Westinghouse, the nuclear company sold by the government three years ago to Toshiba, chose one of its largest shareholders as the lead contractor to build reactors.
Westinghouse is expected to confirm this week that it has appointed US-based Shaw Group to head up its £10bn nuclear programme, passing over the favourite for the contract, rival engineering group Fluor.
Industry sources said that Shaw is likely to source far more reactor components from overseas than Fluor, which has close relationships with British manufacturers. The Unite union claimed that 10,000 new jobs in the UK would not be created as a result of Shaw being selected.
Shaw was one of the main contractors to build Total's controversial Lindsey refinery and made 51 workers there redundant this year, which sparked a series of wildcat walk-outs around the country over the use of foreign labour.
British-based manufacturers such as BAE Systems and Rolls Royce are also understood to be concerned that lucrative contracts to make reactor modules could be lost to Shaw's manufacturing bases in the US and Belgium. A spokesman for Westinghouse in the US confirmed that Shaw had been appointed but claimed that "up to 80%" of the components would be sourced from the UK. He admitted that this was not finalised as none of the supplier contracts had been signed.
He added that Shaw had teamed up with British construction firm Laing O'Rourke for the bid, but the firm will not be involved in providing any of the high specification reactor components.
Japanese firm Toshiba owns 77% of Westinghouse, with 20% owned by Shaw Group. Westinghouse is hoping to secure contracts to build at least four of its AP1000 reactors with E.ON and RWE npower, who have formed a nuclear joint venture in the UK, soon after Christmas.
Dougie Rooney, Unite's national energy officer, said: "The implications are massive. With Fluor, there is a far greater opportunity to get UK companies involved. Shaw has no allegiance to the UK and it's wrong that a company with an equity share should be involved in the competition."
It was also claimed by several industry sources that Westinghouse had initially recommended to Toshiba that Fluor be appointed, but that the parent company insisted that Shaw be chosen instead. A Westinghouse spokesman in the US said that Shaw and Westinghouse already had a partnership to build reactors in the Middle East and the US. "It was a decision made in conjunction with a number of parties, including our parent company Toshiba," he said. "It's our intention to use British labour as much as possible."
Rival French reactor firm Areva is building the rest of the UK's reactors, on behalf of EDF Energy, and has only promised to allow British firms to bid for up to 70% of the supply contracts.
Business secretary Lord Mandelson has drawn up a "low-carbon industrial strategy" to enable British manufacturers and workers to benefit from the country's huge construction programme of less polluting power plants such as wind farms and nuclear reactors. Mandelson has also repeatedly spoken of the need for the government to demonstrate "industrial activism", or a willingness to intervene on behalf of key sectors of the economy.
But British manufacturers in the power sector have so far yet to benefit. The closure of the Vestas wind turbine plant in the Isle of Wight became totemic of the UK's inability to develop its own renewables industry. Unions are now anxious that manufacturers could similarly miss out on the opportunities from plans to build at least 10 new reactors in the UK.
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