As budget week commences, the British government has introduced a new investment package aimed at propelling the UK to become a global leader in manufacturing.
Valued at £360 million, jointly funded by the government and industry, this initiative aims to support research and development (R&D) as well as manufacturing projects in sectors where the UK holds or has the potential to achieve global leadership. The funding will leverage investment from the private sector to drive innovation and competitiveness.
Key components of the package include nearly £200 million allocated for aerospace R&D projects focused on developing energy-efficient and zero-carbon aircraft technology essential for achieving net-zero aviation goals.
Additionally, £73 million of joint funding will support cutting-edge automotive R&D projects aimed at enhancing electric vehicle technology to improve efficiency and competitiveness.
The Treasury elaborated that supported by over £36 million in government funding through Advanced Propulsion Centre UK competitions, this initiative encompasses four projects aimed at advancing technologies for the next generation of battery electric vehicles. These efforts, led by companies including automotive manufacturers YASA and Empel Systems, aim to enhance efficiency and competitiveness in the electric vehicle sector.
Furthermore, the government will contribute £7.5 million to facilitate the expansion of two pharmaceutical companies’ UK plants. Almac, based in Northern Ireland, focuses on producing drugs to treat diseases such as cancer, heart disease, and depression, while Ortho Clinical Diagnostics, located in Pencoed, Wales, specializes in manufacturing medical testing products.
Chancellor of the Exchequer, Jeremy Hunt, emphasized that this investment will safeguard jobs and foster economic growth, asserting, “We’re committed to supporting the industries of the future by injecting millions of pounds into investment to establish the UK as a global leader in manufacturing. This initiative will secure highly skilled jobs and drive long-term transformation, ensuring a brighter future for Britain.”
The UK’s economy necessitates increased investment, as highlighted by the IPPR think tank’s assessment that the country ranks lowest among G7 nations in terms of business investment, perpetuating a growth “doom loop.”
Despite this investment, Labour’s shadow business secretary, Jonathan Reynolds, remains critical, asserting that the government fails to provide the long-term stability essential for manufacturing prosperity. Reynolds emphasized that recycled announcements are insufficient to reverse the UK’s stagnant business investment, which remains the lowest among G7 nations.
This funding announcement coincides with Hunt’s finalization of Wednesday’s budget, with pressure from Tory MPs to introduce tax cuts aimed at pleasing voters. However, amidst concerns about the state of UK public services, including funding for the NHS and other vital services, the appeal of income tax reductions may be eclipsed. An opinion poll conducted by the Joseph Rowntree Foundation underscores widespread apprehension about NHS and public services funding, indicating greater priority placed on these issues compared to concerns about tax on earnings.