Written statement on Advanced Manufacturing Plan and UK Battery Strategy - Nov 27

Secretary of State for Business and Trade (Kemi Badenoch): Last week, my Rt. Hon. Friend, the Chancellor of the Exchequer announced a £4.5 billion package of support for the manufacturing sector as part of our focus on growth and investment. Today, I am pleased to publish the Government’s Advanced Manufacturing Plan and UK Battery Strategy, backed by £3 billion from this package of support. Over £2 billion will support the growth of the UK’s automotive industry, and £975 million will be committed to the aerospace industry.

Advanced Manufacturing Plan

Manufacturing plays a vital role in the UK’s economy. The UK is a global hub for advanced manufacturing, recently overtaking France as the 8th largest manufacturing nation. The Government’s ambition is to build on these strengths and to make the UK the best place in the world to start and grow a manufacturing business.

The Government has a strong record of helping the sector to thrive. Our approach has led to significant investment successes - Tata has announced a £4 billion Gigafactory, and this week Nissan announced it is leading up to £2 billion of new investment to produce two new electric vehicle models in Sunderland. Already, we are the most attractive destination in Europe in terms of strategically significant foreign direct investment (FDI) according to EY, and we must keep it that way.

Last week’s package of measures further cements our commitment to the sector. Today, I am pleased to outline the Government’s complete Advanced Manufacturing Plan, which details the Government’s three key priorities: investing in the long-term future of manufacturing, cooperating internationally and building supply chain resilience; and reducing costs and removing barriers to boost competitiveness. The Plan is to be further augmented by:

• A new industry Hydrogen Taskforce to set strategic direction for the potential use of hydrogen propulsion systems and manufacturing opportunities for the UK.
• Exploring the establishment of a Manufacturing Observatory which would aim to build our capability with industry and researchers on manufacturing evidence and analysis.
• Negotiations on a Critical Minerals Agreement, as part of the Atlantic Declaration announced by the Prime Minister and President Biden in June, to enable those minerals extracted or processed in the UK to count toward sourcing requirements for clean vehicles eligible for tax credits under the US Inflation Reduction Act.
• The establishment of an industry forum, supported by a Call for Evidence, on access to finance for manufacturers to identify the market failures, constraints, and barriers that the sector is facing to unlock additional investment for advanced manufacturing.
• Our response to Professor Dame Angela McLean’s Pro-Innovation Regulation of Technologies Review: Advanced Manufacturing, which focuses on how regulation and standards can drive innovation and growth.
• A new Grid Connections Action Plan with Ofgem that will help to reduce the average delay a project faces to connect to the transmission network from 5 years to 6 months.

The Advanced Manufacturing Plan is also supported by a range of measures in the Autumn Statement including a commitment to make Full Expensing permanent. This will allow businesses to invest for less, representing a tax cut to companies of over £10 billion a year and increasing total business investment by £14 billion over the forecast period or £3 billion per year.

UK Battery Strategy

Alongside the Advanced Manufacturing Plan, I am also publishing the UK’s first Battery Strategy. Battery demand is one of the highest growth clean energy sectors in the world and the UK is well placed to reap the rewards due to its research expertise, its thriving automotive sector and its leading electric vehicle battery startup ecosystem.

Our vision is for the UK to achieve a globally competitive battery supply chain by 2030 and to be a world leader in sustainable design, manufacture, and use of batteries. In the strategy, I am pleased to announce a range of measures to support the UK battery industry, including:

• As outlined at Autumn Statement and in the Advanced Manufacturing Plan, committing £2 billion of capital and R&D funding for zero emission vehicles, batteries and their supply chains to 2030, building on the work of the Automotive Transformation Fund and the Advanced Propulsion Centre.
• Investing an additional £50 million to enhance the UK Battery Industrialisation Centre's development facilities; boosting its capability for R&D in new chemistries and future technologies and in an Advanced Materials Battery Industrialisation Centre in the West Midlands and North East to bridge the gap between laboratory research and commercial production; bringing total government investment in the Faraday Battery Challenge to over £600 million.
• Developing pro-growth battery regulation to support the circular economy. Defra are committed to publishing a consultation and Call for Evidence as early as possible in 2024.
• Expanding market access for the trade of critical minerals and promoting high international standards in supply chains when negotiating new Free Trade Agreements.

Across our manufacturing sectors, I have been clear that we do not intend to enter a distortive subsidy battle with other economies. The UK’s access to rules-based, free trade through our growing Trade Agreement portfolio is key to our offer as the best place to do business and for internationally mobile investment. Already, we have signed trade deals with Australia, New Zealand, CPTPP - with more on the way.

The UK has a proud manufacturing heritage. The Advanced Manufacturing Plan and UK Battery Strategy are a major step forward in ensuring its continued long-term success.

I shall place copies of the Advanced Manufacturing Plan and the UK Battery Strategy in the Libraries of the House.