Just months before the scheme collapsed without any public investment, ministers pointed to electric car battery maker Britishvolt as a prime example of the government’s record of “ensuring UK business investment”.
The company, once hailed as a potential champion in UK battery manufacturing, fell into administration last week after final talks to find emergency funding to keep it afloat failed. Its demise has been criticized for the government’s lack of an industrial strategy, its “levelling” shortcomings and its failure to seize new manufacturing opportunities post-Brexit.
However, as recently as last summer, ministers were using Britishvolt as an example of the government’s ability to attract investment to the UK. Responding to a request by Conservative MPs for details of the government’s progress on investment, then business secretary Jane Hunt claimed the government “has provided further support to attract significant investment in manufacturing, including the delivery of Britishvolt’s £1.7bn gigafactory in Blywood.” This will support 3,000 direct jobs and another 5,000 jobs across the supply chain.”
Senior executives at Britishvolt will now be questioned as part of a parliamentary inquiry into the electric vehicle battery industry. It has been trying to build a large facility near Blyth, Northumberland, and has a promise of government funding worth £100m, but that funding is dependent on finding a private investor for the project.
Government officials have met with the company several times, but both the Commerce Department and the Treasury Department believe its financial and management performance means providing emergency support would not be a good use of public funds. Since then, there have been claims of mismanagement and profligacy at the company, a claim denied by top figures.
It’s an embarrassment for the government, which has spent a week trying to signal its commitment to supporting neglected areas by boosting funding. The collapse of Britishvolt means the UK now has only one large gigafactory planned for China.
Some Conservatives hoped a new buyer could still be found for the company, but most of its 300 staff were immediately made redundant after it went bankrupt last Tuesday. It follows BMW’s decision in October to stop making the electric Mini in the UK. For the foreseeable future, only petrol models will be built at its Oxford plant.
Shadow business secretary Jonathan Reynolds said the Britishvolt had been the government’s “solution” to poorer communities outside London but had now become a symptom of a wider problem. “This government has no industrial strategy, no plan to boost future industrial employment, and no investment to secure the UK’s growth.
“If we are going to keep making cars in this country, the UK has to have battery factories. Labor has an industrial strategy that includes a commitment to invest in eight gigafactories alongside industry. If we want to see investment in the UK, we need a willingness to be partner government.”
A spokesman for the Department for Business, Energy and Industrial Strategy said the department had provided “significant support to Britishvolt through the Automotive Transformation Fund (ATF), conditional on the achievement of key milestones – including private sector investment commitments”.
“We remain hopeful that Britishvolt will find the right investor, but we are disappointed to hear that is not possible and have therefore not paid the ATF grant. Our thoughts are with the company’s employees and their families at this time , we stand ready to provide support to those affected.
“The UK is one of the best places in the world for car manufacturing and we want to ensure the best possible outcome from that location. We will be working closely with local authorities and potential investors to make this happen as we boost homegrown EV battery production, Part of our commitment to raising the bar and moving towards a greener future.”
