Chancellor of the Exchequer Jeremy Hunt is weighing the top-up to Britain’s Automotive Transformation Fund as part of the fiscal package he’s due to unveil in next month’s Autumn Statement, according to the people, who requested anonymity discussing plans that aren’t yet concrete.
With his fiscal headroom squeezed to a record low, Hunt is trying to find ways to boost the economy while keeping a tight lid on inflation that in recent months has started to come down from a four-decade high. He’s also under pressure to respond to Biden’s Inflation Reduction Act, a $369 billion package of green incentives that left British politicians and businesses concerned it would lure investment away from the UK.
The £850 million ATF is administered by the Advanced Propulsion Centre with the goal of establishing a competitive UK supply chain for the electric car industry. Of that, £136 million was re-directed toward the Sizewell C nuclear plant. People familiar have said that the government forked out £500 million for the Tata plan and funneled £75 million to BMW. Those payouts exhausted the fund, one of the people said.
“Maintaining a competitive business environment to stimulate growth and productivity is critical to the future of UK manufacturing,” the department said in a statement. “We will take decisive action to ensure future investment in zero emission vehicle manufacturing.