Brexit helped the UK to secure £4billion deal for Jaguar Land Rover battery plant over European rivals – with Rishi Sunak hailing the decision as a ‘fantastic vote of confidence’

Brexit has allowed Britain to steal a march on European rivals and secure a new £4billion electric car battery factory that will bring thousands of jobs.

Rishi Sunak hailed the decision by the owner of Jaguar Land Rover to pick Somerset over Spain as a ‘fantastic vote of confidence’ in the UK.

Government sources said being out of the EU had allowed Britain to offer a ‘quicker, fairer and simpler’ way of providing state funding for the gigafactory.

The Indian conglomerate Tata Group said the site in South West England was selected ahead of a rival location in Spain and production will begin in 2026.

The firm is planning to invest £4billion into the gigafactory, which is expected to create 4,000 jobs, while the Government is also expected to provide subsidies worth hundreds of millions of pounds.

‘This is a fantastic vote of confidence in the UK and the UK economy,’ the Prime Minister said. ‘It’s one of the largest ever investments in the UK’s auto sector that we’ve seen – it’s getting us ready for the future and the transition to electric vehicles.’

Mr Sunak added that ‘the UK as a whole is going to benefit’, highlighting that the new factory would also create jobs along its supply chain.

The announcement comes after long-running talks between Whitehall officials and the firm as well as a private discussion in May between Mr Sunak and Natarajan Chandrasekaran, chairman of parent company Tata Sons

The announcement comes after long-running talks between Whitehall officials and the firm as well as a private discussion in May between Mr Sunak and Natarajan Chandrasekaran, chairman of parent company Tata Sons.

It may also provide some relief for beleaguered Tory election candidates as voters head to the polls today in three by-elections. One of the constituencies up for grabs is Somerton and Frome, which is located close to the proposed site of the new gigafactory.

Energy Secretary Grant Shapps said the Government had ‘fought very hard’ to secure the factory and admitted the incentive offered to Tata was ‘large’.

‘I make no bones about that,’ he told the BBC, but refused to say exactly how much was offered in subsidies.

It was previously reported that up to £500million could be given in Government grants to help the company construct the site close to the M5 motorway in Bridgwater and cover future energy costs.

It is also understood lower electricity prices in the UK compared with Europe may have influenced the decision.

The deal, which is the most significant investment in Britain’s automotive industry since Nissan came to Sunderland in the 1980s, will mark a huge turnaround for the sector.

A model of the proposed new electric battery factory is seen during Mr Sunak’s and Mr Chandrasekaran’s visit to Land Rover in Warwick

Rishi Sunak hailed the decision by the owner of Jaguar Land Rover to pick Somerset over Spain as a ‘fantastic vote of confidence’ in the UK

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The Society of Motor Manufacturers and Traders (SMMT) hailed it as ‘a shot in the arm’. It came at a ‘critical moment’ and UK battery production was ‘essential if we are to anchor vehicle production here for the long term’, SMMT boss Mike Hawes said.

Colin Walker, of the Energy and Climate Intelligence Unit, said the new factory ‘is vital if the UK’s car industry is to move with the times’.

It comes after new rules on providing state subsidies to businesses came into force in January as part of Government efforts to simplify the process and move away from more restrictive EU rules.

Under the previous system, most state subsidies were subject to drawn-out bureaucratic processes and required approval from the European Commission in advance.

But post-Brexit rules allow public authorities to award subsidies through ‘streamlined routes’ that are pre-assessed by the Government to speed up the process.

Labour MP Darren Jones, chairman of the cross-party business and trade committee, welcomed the investment in UK battery production but said: ‘We will want to reflect on the subsidy that was required to secure this deal.

‘The Government must set out if this type of support is available to the wider UK automotive sector.’

Tata’s new site in Somerset is set to be the UK’s second gigafactory, joining the Envision plant in Sunderland that supplies Japanese carmaker Nissan.

But Britain still remains behind many European nations, with Germany estimated to have around 14 gigafactories planned or in operation while Hungary has five.