Labour warned over future of UK’s ‘crown jewels’ as Rolls-Royce threatens to build engines abroad

Labor has been warned it is not doing enough to protect Britain’s industrial ‘jewels’ after it was revealed Rolls-Royce could build new engines abroad.

Industry body ADS said the government must step up the pace of support or it risks damaging Britain’s world-leading manufacturing businesses.

This comes after the Daily Mail revealed that FTSE 100-listed Rolls-Royce could produce a new range of jet engines in Germany or the US rather than the UK.

The aerospace giant is actively backed by politicians in Berlin and Washington for a program that will create 40,000 jobs across the company and its supply chain.

Derby-based Rolls-Royce’s decision to start producing new jet engines outside the UK will be seen as a major blow to Labour’s flagging growth prospects.

This comes as rising energy costs attributed to Ed Miliband’s Net Zero drive make it harder to make money from manufacturing in Britain.

An ADS spokesman said: ‘This really underlines how competitive the global market is; ‘We desperately need to make and continue to make the UK an attractive place to do business.’

ADS said proposals to allocate more government funding to aerospace research and tackle high energy costs could be “crucial” in achieving this.

“But this may not be enough, especially in aerospace, where geographic sourcing decisions in the next two years will have major consequences for decades to come, and we must ensure we maintain our market position,” the spokesman added.

‘Our world-leading manufacturing businesses are the jewel in the UK’s crown, but without appropriate regulatory, political and social support they will suffer.

‘The measures this government has taken, or rather announced, so far are useful; but now is the time to move on quickly.’

Derby-based Rolls-Royce plans to re-enter the £1.6 trillion worldwide narrow-body engine market for aircraft used on short-haul flights.

It is in talks with the Government about financial support for the programme, which it describes as a key part of Labour’s industrial strategy.

Developing the engines in the UK is understood to be the choice of boss Tufan Erginbilgic, who is spearheading the turnaround of the UK manufacturing giant.

But insiders believe there are ‘plenty of options’ outside the UK.

And the Daily Mail understands that without the taxpayer support it is seeking (hundreds of millions of pounds), it will be forced to try to produce engines in Germany or the US, two countries where it already has production facilities and where energy is much cheaper.

The company is seeking financial support from the UK for some of the project’s £3bn research and development costs. But it is estimated that the business could bring more than £100 billion to the UK economy.

Rolls-Royce’s decision to launch such a large production business abroad would be seen as a major blow to Britain. It will be a reminder of Labour’s other setbacks, such as AstraZeneca’s scrapping of its £450 million vaccine factory on Merseyside.

Last month, the operator of the Channel Tunnel said it was canceling future investments in the UK due to a rising tax bill; This has raised fears that Keir Starmer’s government is pushing jobs away.