**Derby**: The UK government has committed £9 billion to Rolls-Royce’s Derby site, aiming to protect jobs and regional growth amid ongoing US tariffs. Defence Secretary John Healey highlights this investment as key to economic resilience and increased defence spending as the company navigates trade difficulties.
The UK government’s recent investment in Rolls-Royce is being described as the “best protection” against the threat posed by US President Donald Trump’s tariffs, according to Defence Secretary John Healey. Speaking during a visit to Nottinghamshire on Tuesday, 22 April, Healey underscored a £9 billion deal announced earlier this year aimed at expanding Rolls-Royce’s Raynesway site in Derby and creating up to 1,000 jobs.
This government commitment comes amid turbulence for Rolls-Royce following President Trump’s announcement on 2 April of sweeping tariffs on imports to the United States. These tariffs include a 10% baseline import tax on goods from any country and a 25% tariff on cars and automotive products. Rolls-Royce, which has significant operations in aerospace, defence, and power systems in Derby, initially suffered an 18% drop in its share price after the announcement.
Although the White House later announced a 90-day pause on some tariff measures for about 60 territories, this reprieve did not include the UK, meaning the baseline 10% and the 25% car tariffs still apply to British businesses. Chancellor Rachel Reeves has since travelled to Washington in pursuit of a special trade deal to mitigate these impacts. Following the partial tariff suspension, Rolls-Royce shares recovered to above 700p, regaining much of their lost value and pushing the company’s market valuation back to around £60 billion.
Healey emphasised the significance of the government’s investment, not only for Rolls-Royce itself but for the wider East Midlands economy. During his visit, he said: “The best protection is the big commitment and investment that as a new government we’re making in the Derby site, but in defence generally. We’re increasing defence spending now to 2.5% of what the country produces—that’s a level we’ve not had in this country since 2010 when Labour was last in government, and we’ll go further in the next Parliament.”
He added, “I was at Rolls-Royce in Derby about six weeks ago, making a commitment of £9 billion pounds over the next few years, so securing not just the future of that site and an increase in jobs, but opportunities for young people, apprentices who had just started, who said ‘I can see now I’ve got a future’.”
Highlighting the broader economic effect, Healey pointed out the role of Rolls-Royce as a catalyst for regional growth, supporting numerous smaller suppliers and specialists in the East Midlands who rely on the company’s operations. “This is why I argue that defence is a driver of economic growth. Investment in defence is not just an investment in our national security, but it’s an investment in our economic future as well.”
Earlier in April, Chancellor Rachel Reeves visited Derbyshire to offer reassurances to key companies including Rolls-Royce and Toyota, amidst concerns about the trade climate following the US tariff announcement.
The government’s strategic commitment to Rolls-Royce comes at a time when the company is navigating complex international trade challenges, with ongoing negotiations expected to continue around the specifics of UK-US trading relations in the coming months.
Source: Noah Wire Services
