Photo: Owen Humphreys/PA
Just months before the plan collapsed without any public investment, ministers were using electric car battery maker Britishvolt as a prime example of the government’s record for “securing commercial investment in the UK”.
The company, once proclaimed as the UK’s potential champion in battery making, fell into administration last week after unsuccessful last-ditch talks to find emergency funding to keep it afloat. His death has been criticized for showing the government’s lack of industrial strategy, lack of “leveling up” and Britain’s inability to seize new production opportunities in the wake of Brexit.
However, it was revealed just last summer that ministers are still using Britishvolt as an example of the government’s ability to attract investment in the UK. Responding to a request from a Conservative MP for details of the government’s progress in securing investment, then-trade minister Jane Hunt said the government would “do more to attract significant investment in manufacturing, including handing over Britishvolt’s massive £1.7bn factory.” claimed to provide support. In Blyth Valley, which will support 3,000 direct jobs and 5,000 more across the supply chain.”
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Senior Britishvolt executives will now be questioned as part of a parliamentary investigation into the electric car battery industry. He was trying to build a large plant near Blyth in Northumberland and was promised £100m in government funding, but the grant was dependent on finding private investors for the project.
Government officials interviewed the company several times, but both the business department and the Treasury concluded that its financial and administrative performance meant that providing emergency support would not be a good use of public money. Since then, the company has had allegations of mismanagement and wasteful spending, but seniors have denied it.
It’s an embarrassment to the government in a week as it tries to demonstrate its commitment to support neglected areas with level-up funding. The collapse of Britishvolt means a single large-scale gigafactory is planned in the UK, which will be owned by China.
Some Tories hope that a new buyer may still be found for the company, but the majority of the company’s 300 employees were laid off immediately after the company took control last Tuesday. It comes after BMW’s decision to stop producing an electric version of the Mini in the UK in October. The Oxford plant will then only produce petrol models in the near future.
Shadow trade secretary Jonathan Reynolds said Britishvolt was once the government’s response to “leveling up” poorer communities outside London, but it has now become symptomatic of a broader problem. “This government has no industrial strategy, no plan to increase employment in the industries of the future, or any plan to secure the investment Britain needs for growth.
“The UK needs to have battery factories if we’re going to continue to build cars in this country. Labor has an industrial strategy, including a commitment to partly invest in eight gigafactories alongside industry. If we want to see investment in Britain, we need a government that is willing to be the partner business needs.”
A Department of Business, Energy and Industrial Strategy spokesperson said the department “offers substantial support to Britishvolt through the Automotive Transformation Fund (ATF) provided key milestones are met, including private sector investment commitments”.
“We were hopeful that Britishvolt would find a suitable investor and were disappointed to hear that this was not possible and therefore no ATF grants have been paid. At this time, our thoughts are with the company’s employees and their families, and we are ready to support those affected.
“The UK is one of the world’s best locations for automotive manufacturing and we want to achieve the best outcome for the plant. We are working with local government and potential investors to achieve this as part of our commitment to increase domestic EV battery production, level up and move towards a greener future. We will work closely.”