Jeremy Hunt yesterday announced a £4.5billion funding package to help Britain’s manufacturers compete in the global race for investment.
Car makers and the aerospace industry will benefit alongside, life sciences and clean energy firms, the Treasury said.
The US backs its industries – and lures promising overseas companies – with hundreds of billions of dollars in subsidies and the EU is also formulating major support packages.
That has prompted disquiet that Britain could get left behind – especially after a rise in corporation taxes from 19 per cent to 25 per cent earlier this year in the face of a clamour of protest from business.
Launching the UK scheme yesterday, the Chancellor said it was ‘a significant sum of money’ while acknowledging other countries were putting bigger amounts on the table.
Boost: Car makers and the aerospace industry will benefit alongside, life sciences and clean energy firms, the Treasury said
‘We are not going to indulge in a global race on subsidies,’ Hunt said. ‘We don’t believe subsidies are the best way of attracting investment, but we have to be realistic that we need to offer targeted support.’
The Government has already committed hundreds of millions of pounds in one-off support packages to help persuade multinationals to invest in Britain.
BMW received a reported £75m bung to build electric Minis in Oxford.
A factory in Somerset making batteries for Jaguar Land Rover electric cars will benefit from a £500m subsidy.
The package will take effect from the start of Whitehall’s next spending round in 2025.
It is designed to give firms the chance to plan ahead.
‘Manufacturers and clean energy companies are making long term decisions so they want to know what are the government’s plans going forward beyond that,’ Hunt said.
The Treasury said £2billion of the scheme was earmarked for the car industry with £975m for aerospace, £970m for green industries and £520m for life sciences.
It will target help at the UK’s ‘strongest, leading sectors’ and acknowledges the transformation needed to take place in the car industry to make zero emission vehicles.
Hunt launched the package at ITM Power in Sheffield, a cutting edge UK-listed firm that makes electrolysers – machines that split water into hydrogen and oxygen.
Hydrogen technology is shaping up to be a key part of the transition away from fossil fuels and ITM’s technology could help some of its customers produce it in ‘green’ form – where renewable fuels are used to power the process.
John Harrison, chairman of Airbus UK – the British subsidiary of the European aeroplane maker – said Hunt’s package ‘offers greater certainty for long-term investment in sustainable aviation and highly skilled jobs in the UK’.