LONDON (Reuters) – Britain announced a 4.5 billion-pound ($5.59 billion) investment programme for key manufacturing industries on Friday, with the automotive sector taking up a large chunk of the funds to support the move to zero emission vehicles.
The finance ministry said the funds will be available from 2025 over the course of five years, with 2 billion pounds earmarked for the car industry, 975 million pounds for aerospace and 960 million for clean energy.
The plans form part of the Autumn Statement that finance minister Jeremy Hunt will present on Nov. 22, hoping to revive the fortunes of both a stagnant British economy and the governing Conservatives ahead of an election expected next year.
“Our 4.5 billion pounds 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,” Hunt said in a statement.
Hunt separately told reporters the commitment was “new money”, rather than a reallocation of previously announced spending, and that Britain favoured targeted support over blanket subsidies.
“We’re not getting into a global subsidy race,” he said.
As of the third quarter, British business investment stood 4% higher than its pre-pandemic level – a better performance than Germany, but some way behind France and the United States, according to a Reuters analysis of OECD data.
Earlier on Friday the IPPR think tank, which describes itself as an advocate for progressive policy, published a report that showed years of incoherent industrial strategy had badly hurt business investment in Britain.
“It’s time to be clear about the UK’s strategic objectives, like growing the green manufacturing and services we need for the future, and then to use every tool in the box to get us there,” said George Dibb, head of the Centre for Economic Justice at IPPR.
Hunt is considering making permanent a time-limited tax incentive that is designed to spur corporate investment, according to the boss of telecoms giant BT, who said any such move would be a “game-changer”.
($1 = 0.8056 pounds)
(Reporting by Andy Bruce, Editing by Kylie MacLellan)