Manufacturing given £4.5bn shot in the arm
Jeremy Hunt yesterday announced a £4.5 billion funding package to help British manufacturers compete in the global race for investment.
Automakers and the aerospace industry will benefit, along with life sciences and clean energy companies, the Treasury Department said.
The US is supporting its industries – and luring promising foreign companies – with hundreds of billions of dollars in subsidies, and the EU is also formulating large support packages.
That has sparked concern that Britain could be left behind – especially after a rise in corporate taxes from 19 percent to 25 percent earlier this year, despite loud protests from the business community.
Launching the UK plan yesterday, the chancellor said it was ‘a significant amount of money’, while acknowledging other countries were putting larger sums on the table.
Boost: Automakers and the aerospace industry will benefit, along with life sciences and clean energy companies, the Treasury Department said
“We are not going to indulge in a global race for subsidies,” Hunt said. ‘We do not believe that subsidies are the best way to attract investment, but we must be realistic that we need to provide targeted support.’
The government has already committed hundreds of millions of pounds to one-off support packages to convince multinationals to invest in Britain.
BMW reportedly received £75 million to build electric Minis in Oxford.
A Somerset factory that makes batteries for Jaguar Land Rover electric cars will benefit from a £500 million grant.
The package will come into effect from the start of the next Whitehall spending round in 2025.
It is intended to give companies the opportunity to plan ahead.
“Manufacturers and clean energy companies are making long-term decisions, so they want to know what the government’s plans are going forward,” Hunt said.
The Treasury said £2 billion of the plan was for the car industry, with £975 million for aerospace, £970 million for green industries and £520 million for life sciences.
It will focus aid on Britain’s ‘strongest, leading sectors’ and recognizes the transformation needed in the car industry to make zero-emission vehicles.
Hunt launched the package at ITM Power in Sheffield, a leading UK-listed company that makes electrolysers – machines that split water into hydrogen and oxygen.
Hydrogen technology is becoming an important part of the transition away from fossil fuels and ITM’s technology could help some of its customers produce hydrogen in ‘green’ form – using renewable fuels to power the process.
John Harrison, chairman of Airbus UK – the European plane maker’s British subsidiary – said Hunt’s package “provides greater certainty for long-term investment in sustainable aviation and highly skilled jobs in Britain”.