BMW committed to UK investment despite £600m funding pause, says minister

Carmaker BMW remains committed to its investment in the UK, a business minister has said, after the company paused £600 million of funding into its Oxford site.

BMW announced it is delaying investment into electric vehicle production at its Mini plant over the weekend, pointing to “multiple uncertainties facing the automotive industry”.

In the Commons, shadow business minister Greg Smith argued Labour’s “puritanical” obsession with zero emission electric vehicles is shattering industry confidence.

Business minister Sarah Jones said BMW’s decision was a result of “macroeconomic global and commercial reasons” and said the Government is working to create conditions in which the automotive industry can “thrive”.

The £600 million was expected to be spent on an upgrade of its plant in Cowley, where the company planned to manufacture battery-electric Minis.

The investment was agreed in 2023 and was backed by a £60 million grant from the Government. BMA has since confirmed it will not accept the grant.

Responding to an urgent question on Monday, Ms Jones told MPs: “We know that BMW has taken a commercial decision to delay the production of two new electric Mini models at its Oxford plant.

“I know this news will undoubtedly be unsettling for the company’s many hardworking employees, not least those working directly on the production line, but I must stress that BMW remains committed to its investment in the UK, and it is by no means unusual for a manufacturer to adjust their product line-up or production start dates for commercial reasons.”

She added: “This Government is working closely with BMW as it reviews its investment timelines, ensuring that more cars are built right here in the United Kingdom.”

Following this, Mr Smith said: “I expected the Secretary of State to hide from talk of CVs, it seems that also applies to EVs (electric vehicles), because this weekend, we saw the disastrous consequences of Labour’s rigid approach to net zero: BMW hitting the brakes on a £600 million investment into plant Oxford.

“That deal from 2023 would have secured 4,000 high-quality jobs and was – was – a strong vote of confidence in the UK.”

He added: “The effects of their puritanical ZEV (zero emission vehicle) obsession is already clear: JLR say the ZEV mandate is causing severe disruption to the market, Vauxhall confirmed it would shut down its Luton factory, citing the ZEV mandate making the plant less economically viable, and now the future of plant Oxford, the home of the mini since 1959, is uncertain.

“Labour’s reckless policies have shattered industry confidence, with consumer demand for EVs dropping off a cliff with numbers only just about sustained by subsidised fleet sales.

“So, will the minister do the right thing, stop hiding behind consultations, and acknowledge their ideological approach to net zero will only lead to economic disaster for our automotive sector and consumers alike?”

Ms Jones replied: “The puritanical ZEV obsession was, as (Mr Smith) knows, a Conservative policy from the last government.

“The only changes that were made to that policy under the last prime minister was to dampen demand by changing the deadline, but hampering manufacturers by not changing any of the flexibilities or pragmatism in how the policy operated.”

She added: “We are ensuring that we are listening to industry. We are ensuring that we get this right. We are working at pace to do that, but we are also creating the conditions in which the automotive industry can thrive.”

Ms Jones also said: “It was really clear in the statement that BMW made that there were macroeconomic global and commercial reasons why the decision to delay has been made, but BMW are also clear that they are still committed to this investment in the UK.”

Liberal Democrat trade spokesman Clive Jones said: “This is yet another failure of the Government’s main aim to get Britain growing again.

“Zero-emission vehicles are too expensive and appear too hard to manufacture in the UK, forcing us into an unfortunate reality where we are reliant on Elon Musk for our supply of EVs, funnelling money into his already very deep pockets, rather than promoting a productive domestic market with good jobs.

“We need to show ambition and make it easier for ordinary families to buy EVs.”

Ms Jones replied: “We held an international investment summit a few months ago where £63 billion of investment was announced.

“£2 billion as I’ve already mentioned in the Budget announced for the automotive industry. Interest rates have been cut three times. Wages are up. More than 70,000 jobs have been secured in the UK since this Government came to power.”

The minister later described the forthcoming industrial strategy as the future “backbone to ensure we deliver growth”, promising “stability, investment and reform” for car manufacturers.