The Government has been accused of failing the UK automotive sector after not delivering funding to battery firm Britishvolt to create a 3,000-job gigafactory in Northumberland.
Labour’s Shadow Business Secretary Jonathan Reynolds visited the battery start-up’s site at Cambois, near Blyth, after a week in which the company narrowly averted going into administration. Britishvolt is aiming to build a £3.8bn factory to make batteries for electric vehicles, with the project crucial both to the local area and the future of the country’s automotive industry as it transitions towards making electric cars.
Britishvolt has been hampered by a lack of investment, with the latest blow being a Government refusal to forward £30m of a £100m grant promised to the firm first announced in January. The company’s short-term future has been safeguarded after it secured some funding earlier this week, but longer term questions over the project remain.
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Mr Reynolds said: “The reason we’ve had the stories this week is because, quite frankly, after the mini-Budget, there’s been substantial damage done to household finances, to interest rates but also to business investment and also to the investability of the UK. The political instability has a real world effect in terms of people’s view of the country and the economic stability that they need to invest
“Now, this has to be recognised by the Government and it doesn’t require any additional resources, because this company has already been through a six-month due diligence process and has been awarded £100m from the Automotive Transformation Fund.
“They need to have the humility to recognise that it’s the Conservative Party’s actions that have caused this problem. I understand that they’re asking for £30m of the £100m they’ve already been allocated and they have private investors who will match that, they will underwrite that £30m from the taxpayer so there’s no risk here.
“To me, this is such a compelling position it comes back to the fact that I don’t think the Government is serious about the automotive sector and battery capacity and this country stands to lose out unless they get on the pitch.”
Mr Reynolds said that no gigafactories had been built anywhere in the world without state support, and said that backing the scheme was a matter of “real national importance.” His comments were echoed by Wansbeck MP Ian Lavery, whose constituency covers the Britishvolt site. Mr Lavery said the project was a “golden opportunity” for levelling up and would pay huge dividends, not only locally but in the UK’s pursuit of green industry.
Britishvolt this week secured a short-term investment from an undisclosed backer - thought to be an existing investor - that it said would see it through the “coming weeks”. The company’s staff have agreed to a voluntary pay cut.
The firm’s chairman Peter Rolton said he hoped conversations with investors would pay off within the next few weeks. He is also seeking talks with new Business Secretary Grant Shapps.
He said: “You’ve had a semi-global crash and then of course huge disruption in the UK, politically and financially, with the fiscal event or whatever they want to call it. It’s certainly made international funds very, very nervous about the UK as an investible proposition. Not Britishvolt - we’ve numerously and continuously passed due diligence as an organisation around our product, our people and our business plan.
“But the big challenge has been getting people to go: ‘We want to invest in a company that is in the UK’ - it’s the UK platform that’s the challenge for us. That said, we are starting to see that turn around now in the last few weeks. We’ve had a lot of discussions started that were previously, frankly, stalled - where they said ‘we’re out, we love you dearly but not at the moment’ - they’re now coming back to the table. I’m confident we’ll get somewhere with it now.”
A spokesman for the Department for Business, Energy and Industrial Strategy (BEIS) said: “We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing as we transition to electric vehicles, while ensuring taxpayer money is used responsibly and provides best-value. We do not comment on speculation or the commercial affairs of private companies.”
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