UK Labour party pledge billions to support electric vehicle industry

By William James and Elizabeth Piper BRIGHTON, England (Reuters) - Britain's opposition Labour Party will lay out on Tuesday a multi-billion pound package to boost development of electric cars and battery technology, promising to create tens of thousands of jobs and safeguard the automotive industry.

Reuters September 24, 2019 04:06:16 IST
UK Labour party pledge billions to support electric vehicle industry

UK Labour party pledge billions to support electric vehicle industry

By William James and Elizabeth Piper

BRIGHTON, England (Reuters) - Britain's opposition Labour Party will lay out on Tuesday a multi-billion pound package to boost development of electric cars and battery technology, promising to create tens of thousands of jobs and safeguard the automotive industry.

Labour is hoping to win power from Prime Minister Boris Johnson's Conservative Party at an expected early election, capitalising on the political unrest caused by the country's divisive exit from the European Union.

The socialist-led Labour Party is using its annual conference in the English resort of Brighton to lay out plans to transform the British economy, promoting higher government spending and a large public investment programme.

On Tuesday, the party will pledge to invest 3 billion pounds ($3.73 billion) with car manufacturers in return for a stake in their companies if they use the money to develop new electric car models and technology.

It will also promise more than 2 billion pounds to help finance half the cost of building three new battery factories - a leading part of the growing electric vehicle industry.

"The automotive sector is one of the UK's industrial success stories. However, the sector is under siege from Brexit uncertainty and the government's lack of ambition on electrification," Labour's business policy chief Rebecca Long-Bailey said in a statement.

"If we want our automotive sector to flourish, we need a government who is not afraid to intervene."

Britain's car industry has suffered a mixed year, with Ford and Honda <7267.T> announcing factory closures, but others like Ineos and Jaguar Land Rover making fresh investments.

Brexit, and specifically fears that Britain will end up leaving the EU without an exit deal to mitigate the economic disruption, has been cited as a major worry for manufacturers who rely on intricate cross-border supply chains.

Labour said 3 billion pounds would be available in 2020/21 and 2021/2022. Firms would be invited to bid for a portion of the cash and would have to match the amount they receive. The investment takes the form of equity finance; capital in exchange for shares in the company. 

GIGAFACTORIES

Although Labour trail the ruling Conservatives in opinion polls, the outcome of any election is highly uncertain and will likely hinge on how the country resolves its three-year crisis over Brexit in the coming months.

Although Labour presents itself as a government-in-waiting, it has also suffered damaging splits over Brexit and leader Jeremy Corbyn has yet to convince some voters of his ability to take control of the world's fifth largest economy.

An important component of any election campaign would be long-term plans for the country's economy, with polls showing increased voter appetite for higher public spending after nearly a decade of deficit-reducing cutbacks.

Labour said their investment plan would create 32,000 new jobs and help protect another 186,000 car industry workers.

The bulk of those new jobs would come from the battery factories, often known as gigafactories, and the associated chemical supply and processing chains. They said each factory would cost 1.5-1.7 billion pounds.

Labour said they would look to retain a 51% publicly managed stake in the factories, and build them in South Wales, Stoke and Swindon - regions which have all suffered from industrial decline.

(Reporting by William James, Editing by William Maclean)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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