Rolls-Royce close to government deal on new engine – Daily Business

Rolls-Royce plant near Glasgow airport

Rolls-Royce is hoping to secure a £200 million government subsidy to build the next generation of jet engines for short-haul aircraft.

Reports suggest talks have resumed between the company and Labour ministers after they were put on hold following the departure of Sir Keir Starmer from Number Ten.

The new government demanded time to consider the plans which would see Rolls-Royce re-enter the £1.6 trillion market for engines for narrow-bodied aircraft after an absence for 15 years.

A decision could come ahead of the Budget and is being billed as a big statement of intent around Andy Burnham’s ‘re-industrialisation’ agenda. 

The Government has been warned that unless it provides financial support, the firm could seek to develop the engines abroad, which would be a major blow to UK growth ambitions. 

Rolls-Royce chief executive Tufan Erginbilgic has turned the company’s fortunes around but wants a decision before the end of the year.

Speaking at the Farnborough International Airshow in July, he said: “If you want economic growth, this will transform it, this will contribute significantly without any doubt. It will transform advanced manufacturing in the UK and the supply chain.”.

He said government backing for the eingine project could create 40,000 British ​jobs.

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