Car makers will benefit from a cut of a £4.5bn government fund earmarked for ‘strategic’ manufacturing sectors.
Over £2bn of the fund has been earmarked for the UK automotive industry, with £975m for aerospace manufacturers.
The funding will cover a five-year period and become available in 2025, after the next general election, with the Treasury saying the move will provide industry with long-term certainty about investments.
The money is intended to support the development of zero emission vehicles, as well as more energy efficient aircraft equipment, the Treasury said.
Mike Hawes, SMMT chief executive, said: ‘Today’s announcement is an unequivocal vote of confidence in the UK’s critical automotive industry.
‘Coming on the back of almost £20bn committed by the sector in next generation plants and technologies this year alone, it is indicative of the scale of investment such support can leverage and the result of substantial collaboration between government and the industry.
‘This additional government investment reflects the fact the UK automotive sector has the talent, the innovation and the determination necessary to thrive in the face of fierce global competition.
‘It will deliver benefits not just for the automotive sector but for the whole country in terms of growth, high value jobs and productivity.
‘It also sends a powerful signal that the UK is open for business.’
Over half a billion pounds has been given to the life sciences sector, with another £960m also committed to a green industries growth accelerator plan.
The Treasury said that projects covering carbon capture, hydrogen, nuclear energy and offshore wind would all be able to apply for funding as part of the plan to support clean energy.
Chancellor Jeremy Hunt said: ‘Britain is now the eighth largest manufacturer in the world, recently overtaking France. To build on this success, we are targeting funding to support the sectors where the UK is or could be world-leading.’
He added: ‘Our £4.5bn of funding will leverage many times that from the private sector, and in turn will grow our economy, create more skilled, higher-paid jobs in new industries that will be built to last.’
It comes as ministers also agreed to fourteen recommendations from a detailed review of regulation and standards by chief scientific adviser Professor Dame Angela McLean.
The government will publish its first battery strategy next week, which will set how the UK plans to develop a globally competitive battery supply chain by 2030.
Jonathan Reynolds, Labour’s shadow business secretary, said: ‘While the government scrambles to catch up in the race for green jobs, Labour has been making the case for a modern industrial strategy to back British business for years.
‘Under Labour our industrial heartlands will get the backing they need with an industrial strategy built to last, supporting our plan for green steel, new gigafactories and GB energy.
‘Labour’s British jobs bonus will make sure that investment is directly targeted at the energy workers and communities who will power our future.’
Image credit: SMMT