Will government subsidise GM's proposal to build Ampera at Ellesmere Port?

Government funding of £30m for GM’s plug-in hybrid, the Ampera, would create 2,000 new jobs at Ellesmere Port. But business secretary Vince Cable will have to do a U-turn if he is to approve it.

U-turn by Cable on Vauxhall Ampera funding for Ellesmere Port?

A meeting between Nick Reilly, GM president for Europe and government business secretary Vince Cable is expected before the end of July.

Reilly will ask Cable for £30m government funding to bring European production of the Vauxhall/Opel Ampera to GM’s Ellesmere Port plant, home of the Astra. This will put pressure on Cable who has said, ‘I've made it clear that I don't see the future as large-scale subsidies to [automotive] companies. This point of view isn't politically motivated – I believe in markets and competition, but I'm practical and pragmatic. I recognise that other countries have offered more, but we can't fight – and we can't win – a subsidy war.’ He was not ‘going around the country waving a cheque book.’

Cable has three factors which may make him do an abrupt u-turn. The first is that production of the plug-in hybrid electric Ampera at the Ellesmere Port plant will create around 2,000 new jobs in the North West. The second is that he has already confirmed funding for the all-electric Nissan Leaf at the company’s Sunderland plant plus funds for Ford, so why not Vauxhall? The third is that the coalition government has already announced its support for a low carbon economy – and electric vehicles emit no carbon dioxide.

Nick Reilly will also ask for confirmation of the £5,000 subsidy paid by the government to buyers of electric vehicles - which may reduce the uncertainty generated by the new government. Cable needs to act quickly because the subsidy is crucial to EV and PHEV pricing – in order to bring the cars within the scope of new car buyers.