Britain’s business secretary bragged that Britishvolt was the Brexit success story months before the crash | Electric, hybrid and low-emission cars

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Ministers were using electric car battery maker Britishvolt as a prime example of the government’s record of “securing UK business investment” just months before the scheme collapsed without any public investment.

The company, once heralded as Britain’s potential battery-making champion, went into administration last week after last-minute talks to find emergency funding to keep it afloat failed. Its demise has been criticized as showing the government’s lack of industrial strategy, deficiencies in “upgrading” and Britain’s failure to seize new manufacturing opportunities in the wake of Brexit.

However, it emerged that just this past summer, ministers were still using Britishvolt as an example of the government’s ability to attract investment into the UK. Responding to a request from a Tory MP for details of the government’s progress in securing investment, then Business Secretary Jane Hunt claimed the government had “provided further support to attract significant investment in manufacturing, including the delivery of the British Vault plant worth £1.7 billion in Blyth Valley, which will support 3,000 direct jobs and a further 5,000 across the supply chain.”

Senior Britishvolt executives will now be questioned as part of a parliamentary inquiry into the electric car battery industry. It was trying to build a large facility near Blyth in Northumberland and £100 million in government money was promised, but the grant was dependent on finding private investors for the project.

Government officials met with the company on several occasions, but both the Business Department and the Treasury Department concluded that its financial and administrative performance meant that providing emergency support would not be a good use of public money. Since then there have been allegations of mismanagement and wasteful spending by the company, which prominent figures have denied.

It is an embarrassment to the government, in a week when it has been trying to show its commitment to supporting neglected regions by raising the level of funding. The collapse of Britishvolt means that there is now only one large scale factory planned in the UK, which will be Chinese owned.

Some conservatives hope a new buyer can still be found for the company, but the majority of its 300 employees were promptly laid off after it collapsed into management last Tuesday. This follows BMW’s decision in October to stop building the electric version of the Mini in the UK. Its Oxford plant would then only be making petrol models for the foreseeable future.

Jonathan Reynolds, the shadow business secretary, said Britishvolt was once the government’s “response to leveling” poor communities outside London, but was now a symptom of a wider problem. “This government has no industrial strategy, no plan to boost jobs in the industries of the future, or secure the investment Britain needs to grow.

Britain must have battery factories if we want to continue making cars in this country. The business has an industrial strategy, including a commitment to part investment in eight giant factories alongside the industry. If we are to see investment in Britain, we need a government that is willing to be a partner that business needs.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said the department had provided “significant support to Britishvolt through the Automotive Transfer Fund (ATF) subject to milestones – including investment commitments to the private sector – being met”.

“We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this was not possible and therefore no ATF grant was paid out. Our thoughts are with the company’s staff and their families at this time, and we stand ready to support those affected.

“The UK is one of the best locations in the world for car manufacturing, and we want to ensure the best outcome for the site. We will work closely with the local authority and potential investors to make this happen, as part of our commitment to boosting domestic electric vehicle battery production, raising the bar and progressing towards a greener future.”

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