London Daily

Focus on the big picture.
Monday, Jun 30, 2025

Chancellor Jeremy Hunt 'wary' of new subsidies as companies look to US for government support

Chancellor Jeremy Hunt 'wary' of new subsidies as companies look to US for government support

AMTE Power tells 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.

Britain's only surviving home-grown battery producer 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.

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."

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."

Newsletter

Related Articles

0:00
0:00
Close
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
×