Chancellor Jeremy Hunt ‘wary’ of new subsidies as companies look to US for government support
One of Britain’s only battery producers is considering shifting manufacturing from the UK to the US to benefit from American subsidies, Sky News can reveal.
AMTE Power, a Thurso-based firm with a history going back to the very earliest days of lithium ion batteries, told Sky News it is now very difficult to justify keeping production in the UK given the incentives being offered to companies to make green technology in the US.
It comes after America introduced an unprecedented set of subsidies for green companies as part of its multibillion dollar Inflation Reduction Act (IRA).
AMTE made some of the first lithium ion batteries for military customers in the 1990s
However, the Chancellor Jeremy Hunt told Sky News that Britain should be wary of any new subsidies, warning that they could undermine the economy and might even trigger a protectionist trade war.
AMTE, whose history includes having made some of the world’s very first lithium ion batteries for military customers in the 1990s, has plans for three new special types of cells: one for high-performance vehicles, one for energy storage and one very long-lasting battery.
The business is already making batches of the cells in its Thurso base but has plans to build a bigger plant – a gigafactory, as large battery plants are sometimes called – in Dundee. But the IRA has completely changed the calculus, according to chief executive Alan Hollis.
“In the Inflation Reduction Act, the typical support for the running costs of a gigafactory would be between 30 and 50% of the operating costs,” he said. “The answer is perfectly clear [about] where the most economic place for the gigafactory will be.
“We don’t have a competitive environment in the UK at this moment in time.”
Several large and small companies, including car giant Volkswagen, have announced plans to open new battery production in the US. And since the IRA covers all green technologies there are fears that other UK businesses, focused on hydrogen, carbon capture and wind power among others, might relocate.
AMTE’s warning is of particular symbolism, however, since some of the world’s very first lithium ion batteries were made at its Thurso plant.
AMTE Power’s Alan Hollis says the UK does not have a ‘competitive environment’
Mr Hollis said AMTE was now actively considering shifting its production overseas.
“We are a home-grown UK business,” he said. “We see ourselves as a UK company. We’ve developed the technology here. We want to commercialise the technology here and we want to manufacture the product here.
“But we have to ask the question if the subsidies are available overseas.”
The warning follows the implosion of the great hope for the UK battery sector, BritishVolt, which faced administration and whose plans for a gigafactory in Blythe remain in doubt.
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How lithium batteries are made
Mr Hollis said: “Unless we make the UK a competitive place for battery manufacturer, we probably won’t end up with a battery manufacturing industry in the UK. And the consequences of that are clear for the automotive industry and for the energy storage sector as well.”
However, the chancellor, who discussed the Inflation Reduction Act with his international counterparts in Washington over the past week, signalled that he had no plans for fresh subsidies.
“If you depend entirely on subsidies, there’s a risk,” he told Sky News. “First of all it’s wasteful to spend money subsidising factories that would have been built anyway. Secondly, when you take subsidies away, you can end up with a business that’s not viable.”
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Mr Hunt says the UK should be wary of any new subsidies
“So our model in the UK is a combination of some support to get businesses off the ground and then some market regulatory changes that mean those businesses have a long-term future and investment incentives through the tax system.”
Asked whether he feared the IRA would lead to more protectionism around the world, Mr Hunt said: “We can be sensible and pragmatic and develop supply chain sources through our friends – sometimes through ourselves – and continue to benefit from sharing and benefiting mutually from technology.
“If we were to turn our backs on free trade that will be a disaster for the world economy. We will enter into a dark ages period.”
Sky News’ economics editor Ed Conway and Chancellor Jeremy Hunt
The chancellor intends to reveal more details of his response to the US Inflation Reduction Act at the Autumn Statement later on this year. However, many businesses are already starting to make plans to shift production.
“The time to be thinking about making investments is now; it’s not in six months’ time. It’s now. Our competitors are getting significant advantage from their governments… We’re struggling to raise the funding and to get the government support.
“And so that ideally, what we need is a joined-up end-to-end industrial strategy from the government that enables the creation of a competitive environment for the UK battery industry here in the UK. That then enables us to become competitive and create jobs, drive the investment and achieve our green goals.”
Business
Supermarkets being told to cut shoppers’ calories in obesity crackdown is not ‘nanny statism’, says Streeting
The health secretary has told Sky News the government’s plans to tackle obesity by introducing a health food standard for supermarkets are a “world-first approach” and not “nanny statism”.
As part of an initiative aimed at taking some pressure off the NHS, food retailers and manufacturers will “make the healthy choice the easy choice” for customers in the UK, which has the third-highest adult obesity levels in Europe.
Supermarkets will be required to report sales data and those that fail to hit targets could face financial penalties, suggested Nesta, the innovation agency which initially developed the policy.
Speaking on Sunday Morning With Trevor Phillips, Wes Streeting said: “Instead of traditional nanny statism, where we regulate more heavily on price or marketing on what’s sold, we’re taking a world-first approach, which is working with supermarkets using data they already collect about the nutritional value of their shopping baskets and shopping trolleys, the average shop.
“We’re going to work with them to reduce the amount of unhealthy food in trolleys and baskets by setting targets on the healthy value of your shopping trolleys and baskets.”
He said if obese people cut their calorie intake “by about 216 calories a day – the equivalent of a bottle of fizzy coke, we’d halve obesity”.
“We’ve got one in five kids leaving primary school with obesity, it’s costing the NHS £11bn a year, and obesity has doubled since the 1990s,” he added.
He also said: “If we reduce calorie intake in this country by just 50 calories a day, that would lift 340,000 children out of obesity.”
Mr Streeting said supermarkets will decide through the combination of where they put their products, how they do price promotions, and what products they choose to put on the shelves.
“They will work with us to make sure that we nudge people in the right direction, without any of us even noticing,” he added.
Read more from Sky News:
Hundreds of NHS quangos to be axed
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UK may have reached ‘peak obesity’
Businesses will be free to choose how to implement the new healthy food standard, which aims to make their customers’ average shopping healthier.
Measures could include reformulating products and tweaking recipes, changing shop layouts, offering discounts on healthy foods, or changing loyalty schemes to promote healthier options.
Obesity is one of the root causes of diabetes, heart disease and cancer.
The new scheme, announced on Sunday by the Department for Health and Social Care, is part of the forthcoming 10-Year Health Plan, through which the government is seeking to shift from sickness to prevention to alleviate the burden on the NHS.
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Weight loss drugs ‘changing way we see obesity’
An ‘important step’
Michelle Mitchell, Cancer Research UK’s chief executive, said: “Businesses can play a major role in supporting people to make healthy choices, and this important step could help to reduce rising obesity rates.
“Being overweight or obese is the second biggest cause of cancer in the UK, and is linked with 13 different types of the disease.
“The UK government must introduce further bold preventative policies in both the upcoming 10-year Health Plan and National Cancer Plan, so that more lives can be saved from cancer.”
Tesco is among the supermarkets which have welcomed the government’s announcement. Pic: iStock
Some of the UK’s biggest supermarkets appear to have reacted positively to plans for a new standard of healthy food, with Ken Murphy, Tesco Group CEO, saying: “All food businesses have a critical part to play in providing good quality, affordable and healthy food.
“At Tesco, we have measured and published our own healthier food sales for a number of years now – we believe it is key to more evidence-led policy and better-targeted health interventions.
“That’s why we have called for mandatory reporting for all supermarkets and major food businesses and why we welcome the government’s announcement on this.
“We look forward to working with them on the detail of the Healthy Food Standard and its implementation by all relevant food businesses.”
Simon Roberts, chief executive of Sainsbury’s, said: “We’re passionate about making good food joyful, accessible and affordable for everyone and have been championing the need for mandatory health reporting, across the food industry for many years.
“Today’s announcement from government is an important and positive step forward in helping the nation to eat well.
“We need a level playing field across the entirety of our food sector for these actions to have a real and lasting impact.”
A healthy food standard will be introduced for supermarkets and other retailers as part of government plans to tackle obesity levels in the UK.
As part of a government initiative aimed at taking some pressure off the NHS, food retailers and manufacturers will “make the healthy choice the easy choice” for customers in a country with the third highest adult obesity levels in Europe.
Supermarkets will be required to report sales data and those that fail to hit targets could face financial penalties, Nesta, the innovation agency which initially developed the policy, suggested.
Businesses will be free to choose how to implement the new healthy food standard, which aims to make their customers’ average shopping healthier.
Measures could include reformulating products and tweaking recipes, changing shop layouts, offering discounts on healthy foods, or changing loyalty schemes to promote healthier options.
Obesity is one of the root causes of diabetes, heart disease and cancer.
The new scheme, announced on Sunday by the Department for Health and Social Care, is part of the forthcoming 10 Year Health Plan, through which the government is seeking to shift from sickness to prevention to alleviate the burden on the NHS.
Please use Chrome browser for a more accessible video player
UK may have reached ‘peak obesity’
Health Secretary Wes Streeting said: “Obesity has doubled since the 1990s and costs our NHS £11bn a year, triple the budget for ambulance services. Unless we curb the rising tide of cost and demand, the NHS risks becoming unsustainable.
“The good news is that it only takes a small change to make a big difference. If everyone who is overweight reduced their calorie intake by around 200 calories a day – the equivalent of a bottle of fizzy drink – obesity would be halved.
“This government’s ambition for kids today is for them to be part of the healthiest generation of children ever.
“That is within our grasp. With the smart steps we’re taking today, we can give every child a healthy start to life.”
Read more from Sky News:
Hundreds of NHS quangos to be axed
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Environment Secretary Steve Reed said: “It is vital for the nation that the food industry delivers healthy food, that is available, affordable and appealing.”
Please use Chrome browser for a more accessible video player
Weight loss drugs ‘changing way we see obesity’
An ‘important step’
Michelle Mitchell, Cancer Research UK’s chief executive, said: “Businesses can play a major role in supporting people to make healthy choices, and this important step could help to reduce rising obesity rates.
“Being overweight or obese is the second biggest cause of cancer in the UK, and is linked with 13 different types of the disease.
“The UK government must introduce further bold preventative policies in both the upcoming 10-year health plan and National Cancer Plan, so that more lives can be saved from cancer.”
Tesco is among the supermarkets which have welcomed the government’s announcement. Pic: iStock
Some of the UK’s biggest supermarkets appear to have reacted positively to plans for a new standard of healthy food, with Ken Murphy, Tesco Group CEO, saying: “All food businesses have a critical part to play in providing good quality, affordable and healthy food.
“At Tesco, we have measured and published our own healthier food sales for a number of years now – we believe it is key to more evidence-led policy and better-targeted health interventions.
“That’s why we have called for mandatory reporting for all supermarkets and major food businesses and why we welcome the government’s announcement on this.
“We look forward to working with them on the detail of the Healthy Food Standard and its implementation by all relevant food businesses.”
Simon Roberts, chief executive of Sainsbury’s, said: “We’re passionate about making good food joyful, accessible and affordable for everyone and have been championing the need for mandatory health reporting, across the food industry for many years.
“Today’s announcement from government is an important and positive step forward in helping the nation to eat well.
“We need a level playing field across the entirety of our food sector for these actions to have a real and lasting impact.”
Health Secretary Wes Streeting will be appearing on today’s Sunday Morning with Trevor Phillips show – watch on Sky News from 8.30am.
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