£2.5bn Rolls-Royce deal to build next-generation jet engines in the UK

The government and Rolls-Royce have agreed a £2.5 billion programme to develop a new generation of jet engines in the UK, a deal they say could support thousands of jobs now and tens of thousands more in the decades ahead.

Announced by the Chancellor in today's Budget, the jointly funded ten-year programme will develop cleaner, more efficient engines for single-aisle aircraft, the planes that carry millions of people on short-haul flights, as well as technology that could power military aircraft.

Jobs across the country

The agreement is expected to support 3,300 jobs by the end of 2029, with the potential for tens of thousands of new roles after that. The government says the vast majority will be created outside London and the South East, drawing on the many sites and supply chains Rolls-Royce maintains across the country.

New jobs are expected in engineering, research and manufacturing, from the design stage through to the factory floor. A key part of the agreement is a commitment to work with the wider aerospace sector and regional expertise so that UK-based suppliers directly benefit.

Rolls-Royce estimates that getting a UK engine onto these planes could bring billions more investment in the coming decades, adding £120 billion to the economy over the lifetime of the programme.

"A landmark moment"

Tufan Erginbilgic, chief executive of Rolls-Royce, said: "This is a landmark moment for the UK's aerospace industry. This is a once-in-a-generation opportunity to lay the foundations for decades of sustainable economic growth across the UK, creating high-value jobs and transforming the country's advanced manufacturing supply chain."

He said the programme would help the UK keep its position as "one of only two countries that can design, develop, make and service the jet engines that power the world's commercial airliners."

The Prime Minister, Andy Burnham, said: "Britain has always been an industrial powerhouse. But that strength isn't just part of our past, it should be a core part of our future too."

New technology

The work will develop technologies including advanced materials, electronic systems, advanced manufacturing, robotics and artificial intelligence. It comes alongside a jobs and skills plan to build the workforce the industry will need.

The government's Industrial Strategy identifies new engines for single-aisle aircraft as the UK aerospace sector's biggest opportunity over the next 50 years, with only a handful of nations and companies able to build them.

What it could mean for Birmingham

With the government promising to make sure UK suppliers share in the investment, the deal could open doors for engineering and manufacturing firms in Birmingham as the programme moves from design into production.