The economy minister boasted that Britishvolt was a Brexit success story months before the collapse | Electric, hybrid and low-emission cars

Ministers used electric car battery maker Britishvolt as a prime example of the government’s record of “securing business investment in the UK” just months before the scheme collapsed without any public investment.

The company, once heralded as Britain’s potential battery champion, fell into administration last week after last-ditch talks to find emergency funding to keep it afloat failed. Its decline has been criticized as evidence of the government’s lack of industrial strategy, the shortcomings of “leveling up” and Britain’s failure to grasp new manufacturing opportunities after Brexit.

However, it emerged that just last summer ministers were still using Britishvolt as an example of the government’s ability to attract investment to the UK. In response to a Tory MP’s request for details of the government’s progress in securing investment, the then economy secretary, Jane Hunt, claimed the government had “provided further support to attract significant investment in manufacturing, including the delivery of Britishvolt’s £1.7bn gigafactory in Blyth Valley, which will support 3,000 direct jobs and an additional 5,000 throughout the supply chain.”

Senior Britishvolt executives will now be questioned as part of a parliamentary inquiry into the electric car battery industry. It was trying to build a large plant near Blyth in Northumberland and had been promised £100m of government funding, but the support was dependent on finding private investors for the project.

Government officials met with the company on several occasions, but both the business department and the Ministry of Finance concluded that its financial and management performance meant that providing emergency support would not be a good use of public money. Since then, there have been allegations of mismanagement and profligate spending by the company, which senior officials have denied.

This is a shame for the Government, in a week in which it was trying to show its commitment to supporting neglected areas by leveling out funding. The collapse of Britishvolt means there is now only one large UK gigafactory planned, which will be Chinese-owned.

Some Tories hope a new buyer can still be found for the company, but most of the 300 staff were immediately made redundant after it fell into administration last Tuesday. It follows BMW’s decision in October to stop making the electric version of the Mini in the UK. Its Oxford plant will produce only petrol models for the foreseeable future.

Jonathan Reynolds, the shadow business secretary, said Britishvolt was once the government’s “equalisation response” to poorer communities outside London, but had now become a symptom of a wider problem. “This government has no industrial strategy, no plan to grow jobs in the industries of the future or secure the investment Britain needs to grow.

“Britain has to have battery factories if we are to continue making cars in this country. Labor has an industrial strategy, including a commitment to part-invest in eight gigafactories alongside industry. If we want to see investment in Britain, we need a government that is willing to partner with business needs.”

A spokesman for the Department for Business, Energy and Industrial Strategy said the department had offered “significant support to Britishvolt through the Automotive Transformation Fund (ATF) subject to key targets being met – including private sector investment commitments”.

“We remained hopeful that Britishvolt would find a suitable investor and we are disappointed to hear that this has not been possible and therefore no grant has been paid to ATF. Our thoughts are with the company’s employees and their families at this time and we stand ready to support those affected.

“The UK is one of the best places in the world to manufacture cars, and we want to secure the best result for the place. We will work closely with local authorities and potential investors to achieve this, as part of our commitment to encourage domestic production of electric car batteries, raise the bar and move towards a greener future.”

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