Rolls-Royce could move production out of UK over Labour’s crippling policies

Rolls-Royce is reportedly being courted by Germany and the US to build a new range of jet engines in their countries instead of the UK. The move would come as a major blow to Labour’s growth plans, but Ed Miliband’s Net Zero drive may push the firm to manufacture elsewhere. Rolls-Royce are seeking to re-enter the narrow-body engine market, which is worth £1.6 trillion globally, for planes used on shorter-haul flights. 

The programme could reportedly create 40,000 jobs among workers and the supply chain. However, soaring energy costs are making manufacturing in Britain challenging. It has been reported that the company is currently in discussions with the Government over financial support for the programme – a scheme Labour has earmarked as a key part of its industrial strategy. 

Rolls-Royce CEO, Tufan Erginbilgic, is understood to favour developing the engines in Britain after his turnaround of the UK manufacturer. 

However, insiders believe there are “plenty of options” outside of the UK for the production of the engines. Germany and the US are reportedly on the cards, where the company already has manufacturing sites and energy is cheaper, if the government support is not adequate enough, the Daily Mail reports. 

Trade union Unite, which has members at the company, has said the reports are merely “speculation”. 

British firms are currently grappling with high electricity prices, which are more expensive than in Germany, France, and four times as expensive as in the US, according to a Santander report. 

Rolls-Royce is reportedly seeking financial backing from the UK government to cover some of the project’s £3 billion research and development costs. The firm has said the return on investment could be upwards of £100 billion for the UK. 

Rolls-Royce has declined to comment. A spokesman for the Department for Business and Trade said: “The UK has one of the world’s most competitive aerospace sectors, and we expect Rolls-Royce to continue to play a key role in the sector.”

Unite told Derbyshire Live that it is “speculation from unnamed sources”.