Written statement: Industrial Strategy - April 13

Minister for Small Business and Economic Transformation (Blair McDougall): I wish to update Parliament on a package of significant measures and a major investment to drive forward the delivery of the Industrial Strategy, strengthen the UK's advanced manufacturing base, and ensure the country remains a leading hub for business and investment in a volatile global environment. This builds on the statement made in January, which set out measures to support scale‑ups, accelerate battery innovation, and reduce unnecessary regulatory burdens. Alongside this package, the Government will publish the latest Quarterly Update on delivery of the Industrial Strategy and confirm the re-appointment of Clare Barclay as Chair of the Industrial Strategy Advisory Council for a further term.

Delivering the Industrial Strategy with support for Advanced Manufacturing

We are backing the Advanced Manufacturing sector with over £700 million to help UK industry move faster towards electrification, create pathways into fulfilling, skilled careers and strengthen our supply chains. This will support up to 4,200 jobs, backing local communities and putting more money in people's pockets.

At the heart of this package is a £380 million DRIVE35 grant to support the delivery of what will be one of Europe's largest battery gigafactories in Somerset – with a frame of 100% British steel. This project, delivered by Agratas, will strengthen the UK's battery manufacturing capability, support growth across the automotive and battery supply chains, and reinforce the competitiveness of the UK automotive sector as it transitions to electrification. The project is expected to support up to 4,200 direct jobs and a strong local skills pipeline, including apprenticeships and training in battery manufacturing and engineering, working with local partners such as the University Centre Somerset. It will supply batteries to Jaguar Land Rover, helping to anchor future electric vehicle production in the UK. This builds on previous Government action to support Jaguar Land Rover and its supply chain following the cyber-attack, helping to protect jobs across the automotive sector.

Backing business to transition, innovate, and compete

This investment sits within a wider package to help advanced manufacturing businesses transition, innovate and compete in electric vehicle (EV) manufacturing. This includes interventions from our DRIVE35 programme:

1. Announcing the winners of four R&D competitions worth £90 million, backing innovation across the UK automotive and battery ecosystem and supporting UK leadership in zero emission vehicle technologies, such as a £32 million project where JLR are partnering with semiconductor firm ARM to bring auto and tech firms together to advance Software Defined Vehicles technologies for EVs.
2. Funding of £100 million to help automotive supply chain and support automotive suppliers to transition their systems and capabilities towards EV manufacturing, focused on the West Midlands and North East of England.

The package also includes the first round of multi-year R&D support through the Battery Innovation Programme to back next-generation battery technologies and UK supply chain capabilities, with up to £22 million awarded (matched by industry) to UK-led R&D projects. We have also opened a Round 2 competition, worth £25 million, to support business-led collaborative R&D. The package will support innovation in ‘breakthrough' battery cell materials - including novel cathode materials and solid-state batteries. It will enable UK battery firms to secure private investment and compete globally. This funding will support the development of a circular value chain in battery materials, mining, refining and recycling and boost our economic resilience. We have also announced £1.4 million of Connected and Autonomous Mobility Pathfinder programme grants for feasibility studies exploring autonomous freight in Teesside, Sunderland and the Port of Tyne, as well as self‑driving passenger services at the Wellcome Genome Campus in Hinxton, Cambridgeshire; an NHS site; an airport; and in London - advancing safer, more efficient, automated transport.

We are also expanding the Made Smarter Adoption Programme, doubling our investment up to £99 million over three years, to support manufacturing SMEs to adopt industrial digital technologies – growing local ecosystems and the significant sectoral strengths that are found across English regions. Taken together, these measures will help firms invest in new capability, adopt new technologies, and build stronger domestic supply chains in strategically important sectors.

In addition, up to £16.44m worth of grants will be deployed from the Made Smarter Innovation Programme to drive the development of scalable, industrial digital technologies, improving productivity whilst reducing energy and resource use. The programme is designed to help manufacturing SMEs close the UK's digitalisation gap by connecting innovators with real world challenges and supporting solutions that boost productivity, resilience and sustainability.

Skills and jobs

The government is also doubling down on creating a skilled workforce fit for the future and driving forward implementation of our £182 million Industrial Strategy engineering skills package. This includes £47 million of Adult Skills Funding to train up the next generation of engineers and inventors, and we will be writing to Mayors shortly to allocate this funding to Strategic Authorities to ensure it is aligned to local needs.

It also includes £1.8 million to expand engineering and construction T Level provision, and £8 million in capital funding to support clean energy engineering courses at Levels 4 and 5. For example, Durham University will upgrade engineering laboratories and create a new Flight Controls Lab to expand capacity in clean energy and advanced manufacturing, while Yeovil College will transform its engineering building with specialist equipment and redesigned teaching spaces to boost high‑level skills in advanced manufacturing, clean energy, and defence engineering.

A new battery manufacturing apprenticeship unit has been launched which will help meet the skills needs of Agratas' new Somerset gigafactory. The unit will give employers flexible, targeted training to quickly build the specialist workforce needed for the UK's growing battery sector.

Access to Finance

This package also reflects a step change in Public Financial Institution support to UK industry. The British Business Bank is increasing support for advanced manufacturing as part of our wider funding for the Industrial Strategy sectors; from this month it will deploy the additional £4bn of Industrial Strategy Growth Capital to support growth and investment, and build the ecosystem of specialist investment funds focused on Industrial Strategy sectors. UK Export Finance has already backed over £6.6 billion of advanced manufacturing investment over the last two years. This includes £128m to support the export of two Submarine Rescue Vehicle Systems to the Indonesian Navy. The deal will inject over £67 million into the UK economy through British suppliers SMP Ltd and Forum Energy Technologies Ltd to manufacture these advanced vehicles in York and Bristol, safeguarding and creating jobs across the domestic manufacturing and defence industries. In the summer they will announce plans to go even further, supercharging UKEF's ability to help UK companies tap into the power of international markets.

This package demonstrates the Government's determination to compete for the industries of the future, strengthen resilience in critical sectors, and back investors who create skilled jobs nationwide.