Source · Select Committees · Business and Trade Committee
Recommendation 16
16
Rejected
Paragraph: 71
Conduct and publish a benchmarking review of UK battery industry financial support against competitor countries.
Recommendation
The Automotive Transformation Fund has helped to unlock private investment into the UK, including in gigafactories and businesses further up the supply chain. However, now global competition has intensified, the UK Government needs to ensure that financial support on offer in the UK is internationally competitive. The Government should conduct a benchmarking review to determine how the financial 52 Batteries for electric vehicle manufacturing support on offer compares with that available in competitor countries. It should publish this review and use the findings to inform a new offer of support for the UK’s battery industry in its forthcoming UK Battery Strategy.
Government Response Summary
The government rejected the recommendation to conduct a benchmarking review of financial support, stating it prioritizes comparative advantage over engaging in 'costly subsidy wars' and is already using existing public funding strategically, citing recent major investments as evidence of the UK's competitiveness.
Paragraph Reference:
71
Government Response
Rejected
HM Government
Rejected
A) The UK Battery Strategy sets out the Government’s vision to achieve a globally competitive battery supply chain that supports economic prosperity and the net zero transition by 2030. Our focus and objectives are centred around building on our comparative advantage, scaling up our emerging supply chain, and securing internationally mobile investment, rather than engaging in costly subsidy wars. The Department for Business and Trade will continue to ensure that existing public funding is used in a targeted and strategic way across all our programmes. Auto2030 is a significant commitment to the sector, including £2 billion of capital and R&D funding to 2030 to unlock strategic investments in our automotive industry. B) When determining the grant amount that should be offered to a company the to invest in the UK; therefore, minimising deadweight loss of the programme and ensuring maximum value for money for the UK taxpayer. C) At the Autumn Statement, the Government announced measures to address barriers to investment, including introducing permanent full expensing for plant and machinery will allow businesses to invest for less. With the tax cut now permanent, the UK will continue to offer both the lowest headline corporation tax rate in the G7 and the most generous capital allowances in the OECD group of advanced economies. D) Recent investments represent a major vote of confidence in the UK, for example: • Tata-Agratas announced a £4 billion investment to build one of Europe’s largest gigafactories. • A Nissan-led £2 billion investment to produce two new electric vehicles in Sunderland. • JLR has set out £15 billion of investment over next 5 years to accelerate their path to electrification in the UK. • Nissan, in partnership with AESC, is building a new EV manufacturing hub in Sunderland. • Bentley has announced a £2.5 billion investment to produce its first EVs in Crewe by 2026. • BMW has announced a £600 million investment to produce the next all electric MINI in Cowley from 2026. • Stellantis started producing Vauxhall, Opel, Fiat, Peugeot and Citroën electric vans at their Ellesmere Port plant in September 2023, following a £100 million investment that was secured with support from Government.