NAA Update: £2 billion government commitment to automotive transformation funding
Last month’s Budget was the perfect opportunity for the Chancellor and the new Labour government to put a down payment on the UK’s future growth. After all, the automotive industry – a growth-driving, decarbonisation-critical sector in the midst of rapid technological change – has monumental growth potential in the near and long term.
It was positive, therefore, that government reiterated its £2 billion commitment to automotive transformation funding as part of its modern Industrial Strategy, a commitment which promises to support the scaling up of manufacturing as we transition to net zero, digitalisation and automation.
A thriving manufacturing sector needs to ensure it is globally attractive; skilled, productive, innovative and open to investment. The cost of doing business, however, also matters. Energy costs, for instance, are critical to an industry whose decarbonisation technologies will place greater demands on the grid. But with our biggest input costs still our people, the Chancellor’s increase to National Insurance contributions will add significant pressure to automotive companies – particularly the supply chain, composed of more than 2,500 SMEs. At a time when SMEs are already challenged with finding the significant resource which net zero requires, we need to make things easier, not harder for them.
Our supply chain underpins the entire automotive ecosystem and supports tens of thousands of high skill, high value jobs across the country. So with decarbonisation only accelerating, and as more countries around the world compete for the growth offered by new investment in next-generation technologies and skills, next year’s Spending Review must find the funds to help our supply chain remain competitive and able to invest in its future in the UK.
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Paul Jones
NAA CEO
