A leading Cumbrian business figure says the Government’s approach to financing the £15 billion Moorside nuclear power station development is frightening off investors.

Rob Johnston, chief executive of Cumbria Chamber of Commerce, told in-Cumbria that the Government’s use of a regulated asset base (RAB) model to finance Moorside was a risk of killing the transformation project.

Repeating previous calls for the Government to invest directly in Moorside to ensure it happens, he placed the blame for the delays squarely at the door of its Nuclear Sector Deal published back in June.

Mr Johnson’s comments come after NuGen, the developer behind Moorside, announced it would be cutting almost 70 jobs as it refocuses its efforts on helping current owner Toshiba to find an investor to progress the project.

The cuts – which will see around 100 staff and contractors reduced to just 32 – follow a review by the NuGen board which was sparked by delays on a deal between Toshiba and Korean utility Kepco for the ownership of the company.

Reacting to the announcement Mr Johnston said: “This is a real setback for Moorside, but we don’t blame Toshiba or NuGen – we think that the Government’s ‘Nuclear Sector Deal’ is the root cause.

“Its regulated asset base model for financing Moorside doesn’t give potential developers an attractive enough rate of return. It appears to have frightened off Kepco and will probably deter other potential investors.

“We’ve said consistently that the best way to deliver nuclear new build is for the Government to invest as a partner alongside the private sector. That de-risks the project and so reduces the price of the electricity generated.”

Mr Johnston urged the Government to “change tack quickly” and invest directly in Moorside, which has the potential to create thousands of jobs in Cumbria and generate around seven per cent of the UK’s energy needs.

He added: “If ministers dither, the expertise assembled by NuGen will be lost and Moorside might never happen. That would be disastrous.

“National Grid is forecasting that UK generating capacity may have to double or more by 2050 because of the roll out of electric vehicles. We can’t meet that demand without Moorside.”

According to sources in Korea, Kepco and the Department for Business, Energy and Industrial Strategy have agreed at the meeting to undertake a study looking at the profitability and risks of applying a RAB model to the Moorside project – which allows government regulators to ensure stable returns and finance through government support.

Business and Energy Secretary Greg Clark has previously said the Government would consider the RAB model – which has been used in the electricity transmission and water industries – for future nuclear new build projects beyond the Horizon development at Wylfa Newydd, Anglesey, to ensure they deliver value for money.

His comments came deep in to talks between Toshiba and Kepco, which is majority owned by the Korean Government.

Last month a Korean government official was quoted by The Korea Herald, a daily English language newspaper based in Seoul, that the deal was now being renegotiated because the UK Government’s decision to “change profit models for the project”.

In-Cumbria understands that Kepco remains in pole position to complete the deal for NuGen, but that Toshiba is also talking to other potential investors after stripping Kepco’s “preferred bidder” status. Toshiba would not confirm talks with other interested parties was taking place, but added it was considering “additional options”.