Financial Assistance to Industry

Justin Madders Excerpts

Monday 14th July 2025 General Committees

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

I beg to move,

That the Committee has considered the motion, That this House authorises the Secretary of State to undertake, during the period beginning with the date of approval of this motion and ending on 31 July 2030, to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, grants to businesses as part of His Majesty’s Government’s project to support zero-emission vehicle manufacturing in the UK and the UK’s automotive supply chain, including to support the creation of jobs, private investment into the UK, the development of the automotive industry and emission reductions, up to an overall limit of £1 billion, and to pay during or after that period the grants that are undertaken to be paid. 

As hon. Members will be aware, I am not the Minister for Industry, my hon. Friend the Member for Croydon West (Sarah Jones), but she has duly authorised me to move and speak to the motion.

I hope hon. Members agree that the UK boasts a dynamic, diverse and fast-developing automotive sector, built on a rich industrial heritage. The sector is a significant driver of economic growth, contributing £21.4 billion in gross value added to our economy last year alone, and it proudly employs a workforce of 132,000 people. Those jobs are spread across the UK, mostly outside London and the south-east, with notable car plants and auto businesses in the west midlands, the north-east and Wales—and, I will add, because my officials have not put this in, in the north-west.

Despite our many well-established strengths, the UK and indeed the global automotive sectors are facing real economic pressure while also transitioning to a zero emission vehicle future. With those challenges come a wealth of opportunities, however. Last month, the Government fulfilled a promise to publish our long-term, modern industrial strategy. That plan unites the whole of Government behind a single purpose, tackling issues across skills, regulation, energy prices and infrastructure. Crucially, the strategy will promote investment and growth in advanced manufacturing sectors, at the heart of which is UK automotive.

Targeting ambitious growth requires strong Government action to support businesses and guide that progress. The advanced manufacturing sector plan sets a vision for the UK automotive sector. In addition to a range of other growth driving measures, it commits £2.5 billion via the new DRIVE35 programme to accelerate research and investment in vehicle electrification through to 2035.

As part of DRIVE35, we propose today to commit £1 billion through section 8 of the Industrial Development Act 1982 to support zero emission vehicle manufacturing in the UK. This will be an inclusive and wide-ranging support offer for our automotive sector, and it will be available for businesses of all stages, sizes and maturity, supporting growth in every corner of the UK. DRIVE35 will serve a broad spectrum of technologies, from established high-volume vehicle manufacturing and multibillion-pound gigafactories all the way to start-ups, prototypes and cutting-edge automotive innovation. It will build on the successes of the automotive transformation fund and Advanced Propulsion Centre research and development competitions, which have unlocked more than £6 billion in private investment.

This intervention will ensure that the UK automotive industry can grow and thrive. It will provide the resources for it to move from strength to strength and remain the high-innovation, high-productivity sector that it is today. By cementing strategic technologies and bolstering regional manufacturing clusters, we will seek to leverage a minimum of £6.6 billion of private investment. 

This really matters, because without new investment, the sector risks losing out to fierce competition from abroad. That in turn means fewer car sales, a loss of economic activity and a risk to jobs in parts of the country. 

That is why we are taking a strategic approach to UK automotive investment. The Government and our delivery partner, the Advanced Propulsion Centre, will engage proactively with potential investors. This comprehensive support will help businesses with all aspects, ranging from expertise on technologies and scale-up to site selection, planning and energy infrastructure, and facilitating introductions with trade bodies and other businesses. Of course, we will also consult vehicle manufacturers directly to identify their supply chain needs and preferences for local sourcing. These insights will guide our approach and remain aligned with the evolving automotive landscape.

To summarise, the Government seek authority to make this intervention, because it will secure the UK automotive sector’s position as a leader in the clean energy transition. It will help us to protect jobs and create new ones in our car plants across our manufacturing heartlands. The intervention also directly supports our plan for change and our mission to kickstart economic growth by backing the industries of the future. It will help us to deliver a new decade of national renewal for both our automotive sector and our wider economy. I am grateful for the support of hon. Members from across the House in this endeavour.

--- Later in debate ---

[Justin Madders]

I acknowledge the shadow Minister’s consistency: he opposed his own Government’s policies in this area and now he is opposing ours. Clearly he disagrees vehemently with the direction of travel of the drive—pardon the pun—for electric vehicles. He rightly referred to some of the challenges, such as range, but I disagree with his analysis that this is a failing market. EV sales in the UK last year were the highest in Europe and the third highest in the world, a 20% increase on the previous year. There is a capacity and an appetite for moving to cleaner and greener modes of transportation.

We have responded to some of the concerns raised by industry about the rigidity of the previous target and there have been flexibilities added in as a result of discussions with the automotive sector. This is about levering in private investment; it is about £1 billion of public money supporting the automotive sector. Although the shadow Minister might disagree with the overall policy intent, voting against this motion does not change that—all it will do is to prevent £1 billion of support to the automotive sector, with the effect that that will have on jobs, on investment in R&D and on the confidence that we need to send to the industry about our support for the sector.

The Society of Motor Manufacturers and Traders is very supportive of our policies and wants us to get on with DRIVE35, which underpins this motion. I understand why the shadow Minister is not happy with this motion, but his vote against it, if carried, would have a direct impact on jobs and investment in manufacturing in this country, and that is something the Government cannot support.

Question put.