UK commits over GBP 2.5bn in Spending Review 2025 to nuclear fusion, anchoring STEP prototype plant in Nottinghamshire

Mechanism

The Spending Review 2025 is HM Treasury's multi-year departmental expenditure settlement, delivered by the Chancellor on 11 June 2025. Its "Energy security and climate resilience" section allocates "over £2.5 billion for nuclear fusion, including support for the UK's world-leading programme to design and build a prototype energy plant in Nottinghamshire" — i.e. STEP, delivered by the UK Atomic Energy Authority (UKAEA) at the former West Burton A coal power station site near Retford. This is a domestic R&D/infrastructure funding commitment rather than a trade-restrictive measure, but it sits squarely in the Western industrial-policy stack: state capital anchoring a strategic energy technology (fusion) domestically ahead of commercial viability, mirroring the CHIPS Act / EU Chips Act pattern of pre-market subsidy for a technology deemed strategically critical.

Subsequent DESNZ/UKAEA announcements (June–2026) detailed how the £2.5bn envelope breaks down, including a £1.3bn allocation to UK Fusion Energy (formerly UK Industrial Fusion Solutions) for the STEP programme itself and smaller allocations for supporting fusion R&D facilities, skills, and a cornerstone investment in a private fusion fund — but the Spending Review document itself states only the aggregate £2.5bn figure, which is used here as the primary quantum.

Downstream implications

• Establishes UKAEA/UK Fusion Energy as an anchor customer for UK fusion

supply chain (magnets, tritium breeding blankets, plasma-facing components), likely triggering downstream state-aid and procurement actions as STEP moves from design to construction through the 2030s.

• Positions the UK as a first-mover in a pre-commercial energy technology

race also being pursued by the US (private fusion capital + DOE milestone-based funding) and China (state-directed fusion programmes) — watch for a parallel China or US fusion-specific action to pair via responds_to if one is filed later.

• East Midlands (Nottinghamshire/Bassetlaw) positioned as a "fossil to

fusion" regional industrial policy anchor, replacing coal-plant employment with fusion-cluster jobs.

Open questions

• Whether the £1.3bn UK Fusion Energy allocation and other 2026 sub-line

items should be filed as an amendments entry to this action (a scope refinement of the same envelope) or as a separate action once a primary source with a firm date is confirmed.

• Procurement/contract awards for STEP construction partners (e.g. the

Turner & Townsend-linked construction-partner JV) may warrant their own action once formally contracted.