Government and Rolls-Royce agree £2.5bn to build jet engines in the UK and create tens of thousands of jobs
Government and Rolls-Royce have agreed a £2.5 billion programme which could see jet engines built in the UK for decades and create tens of thousands of jobs.
- Government agreement with Rolls-Royce will keep UK at forefront of aerospace innovation and could see jet engines built in the UK for decades to come.
- Multi-decade co-operation includes joint 10-year £2.5bn programme for next-generation jet engines for passenger and military planes.
- Agreement expected to support 3,300 jobs by end of 2029 with tens of thousands more in the decades ahead.
Tens of thousands of new jobs are expected to be created from a new government agreement with Rolls-Royce to help turbocharge Britain’s reindustrialisation, including a £2.5 billion programme for cutting-edge cleaner and more efficient jet engines, jointly funded over 10 years.
Announced by the Chancellor as he delivers his first Budget today (28 October), the multi-decade cooperation will develop new jet engines for single-aisle aircraft – the planes taking Brits on their summer holidays in Europe – with only a handful of nations and companies able to build them.
Rolls-Royce estimates that securing a UK engine on these planes could lead to billions more being invested in the UK in the coming decades, which could add £120 billion to the economy over the lifetime of the programme.
Identified by the Industrial Strategy as the UK aerospace sector’s biggest opportunity over the next 50 years, the agreement will put Britain ahead in the race to power the planes carrying millions of passengers around the world for decades to come.
The agreement could help support British industry to take advantage of huge market opportunities, delivering on the Government’s drive to reindustrialisation so that all parts of the UK benefit.
The investment is expected to support for 3,300 existing jobs over the next few years, with the potential for tens of thousands of new roles beyond that.
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.
That’s why we’re driving forward reindustrialisation and this agreement shows what that looks like in practice.
It gives businesses the certainty to invest, creates jobs people can build a future on, and keeps British industry where it belongs, at the forefront of innovation.
Business Secretary Jonathan Reynolds said:
Reindustrialisation isn’t just a soundbite – it’s a cast iron commitment to deliver good jobs and growth for people all over the country. That’s exactly what this agreement does.
It makes sure Britain will win the race to power the next generation of passenger planes, keeping jet engine manufacturing in the UK and creating tens of thousands of jobs in the long term.
It’s also a real vote of confidence in the economic plan we’re delivering – giving businesses the certainty they need to grow and invest here on our shores.
New jobs are expected to cover a range of areas from engineering and research to manufacturing – creating roles which run from the design stage all the way through to the factory floor.
The vast majority of these will also be created outside London and the South East – tapping into the numerous sites and supply chains Rolls-Royce maintains across the country.
It represents a big step forward in the Prime Minister’s plan to reindustrialise Britain, showing how the Industrial Strategy is creating the right conditions for companies to invest, create good jobs and build their future in the UK, while helping secure future military air capability.
Tufan Erginbilgic, CEO, 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.
Aerospace is a growing and globally attractive market and this programme with Government is vital to enable the UK to compete. Working together, we can also sustain the nation’s capability to power military aircraft and secure 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 technology, engineering skills and industrial capabilities developed through this agreement could be used in both passenger and military plane engines, boosting the UK’s national security at a time of global uncertainty.
It will develop technologies including advanced materials, electronic systems, advanced manufacturing and the use of robotics and AI. It also comes alongside a jobs and skills plan that will help build the workforce we need for the future.
That means new opportunities for companies to start up, scale up, and grow, and new avenues of British expertise that can be exported all over the world.
A key part of the agreement is a commitment to work closely with Rolls-Royce, the wider aerospace sector, regional and local expertise to ensure UK-based suppliers directly benefit from the decades of sustained investment being delivered.
Later this year the Government will publish its plan for Britain and set out how, over 10 years, it will make this country work for people and businesses again. This means more control of the basics to make the country more functional, more power in the hands of people and places to set their own ambitions, and from there good growth in every postcode.
Background
- The cooperation agreement provides the framework under which future government support will be provided.
- No new grants have been awarded through the agreement at this stage, and any future government support will remain subject to appropriate legal, value-for-money, affordability and government approval processes.
- It is also subject to agreement on terms and conditions with Rolls-Royce, and must pass checks on value for money, affordability and compliance with subsidy control rules.
- Jet engines are some of the most complex and valuable parts of aircraft, with the UK one of only a small number of countries able to design, manufacture and support advanced aerospace engines.
- This agreement will help take a sector which employs around 113,000 people and brings over £46 billion per year into our economy to the next level.
- Single-aisle planes, used for short and medium-haul flights, are set to make up the largest slice of the global civil aerospace market, which is expected to be worth £220 billion per year by 2050 according to the Aerospace Technology Institute.
- According to Rolls-Royce, its UK supply chain spend was over £3 billion in 2025.
- The agreement builds on the £100 million Aerospace Supply Chain fund backed by the British Business Bank and industry announced this summer. This will help ambitious suppliers across the country to grow and meet increasing demand for UK aerospace products and services.
Key sources
- Rolls-Royce narrowbody aircraft production estimates: The next evolution of aviation.
- ADS Group UK aerospace sector employment and economic contribution figures: Value of aerospace, defence, security and space to the UK grew two thirds since 2015, ADS finds - ADS Group.
- Aerospace Technology Institute estimates of the value of the global market for commercial aircraft by 2050: Aerospace innovation and the funding landscape.