12:00 pm, November 27, 2023
Business secretary Kemi Badenoch has released details of the £4.5bn funding plan for British manufacturers.
Car makers, aerospace companies and clean energy firms are set to benefit from the fund earmarked for ‘strategic’ manufacturing sectors, with the automotive industry getting more than £2bn alone.
The plan has been published alongside a £50m battery strategy that aims for the UK aim to become a world leader in design and production of key technology.
The major funding plan for manufacturing was announced by chancellor Jeremy Hunt in the autumn statement last week. It comes as the UK seeks to attract investors and firms in a push to capitalise on the growing green economy.
In a foreword to the plan, Badenoch appeared to distance the UK from the subsidy-heavy approach taken by the US in the Inflation Reduction Act which has been praised the Labour Party.
This is despite the government handing subsidies in recent months to Tata’s battery plant, BMW’s Mini factory and this week to Nissan after the Japanese car giant announced it will build new electric Qashqai and Juke models in the UK.
‘Other countries have embarked on large tax and spending sprees to claim a share of the global manufacturing market. I have been clear throughout that the UK will not be drawn into a distortive subsidy battle,’ she said.
‘For those of us who believe in the power of the market, the key to unlocking continued growth in our manufacturing industry is capital investment from the private sector, which sustains jobs and growth for the UK.
‘No business secretary can pick winners, but government can help companies succeed by removing obstacles in their way and focus on improving the business environment to ensure the sector is competitive.’
Prime minister Rishi Sunak said the new plans would see the government going ‘full throttle to back British businesses and make the UK a world leader in manufacturing’.
‘Today’s plan will not only give the industry the long-term certainty they need to grow and invest further in the UK, but it will also lay the foundations to create more jobs and opportunities for people across the country,’ he said.
The move was welcomed by firms as the government hopes moves to boost business can help revive the UK’s sluggish growth record.
Labour accused the Conservatives of handing out public money ‘with no plan or transparency’.
Shadow business and trade secretary Jonathan Reynolds said: ‘The Conservatives have conceded Labour was right to say our world-class industries need a government on their side, investing in the future.
‘The difference is Labour would back British business and workers with a proper industrial strategy, a clear public plan that attracts private investment, and sees government work in partnership with industry, to ensure jobs and opportunities remain in Britain.
‘The Conservatives seem only to be able to write cheques and press releases with no proper plan.’
