U.K. Plows $160 Million Into Electric Planes, Urban Drones

(Bloomberg) -- The U.K. will plow 125 million pounds ($160 million) into electric planes and drones to ease congestion in urban areas, Business Secretary Greg Clark will announce on Thursday.

The funding -- to be matched by the private sector -- aims to develop new technologies to cut pollution from the aerospace industry, as well as to ease congestion in London and other urban areas, according to a statement from Clark’s department. It’ll help pay for the development of electric planes with vertical takeoff capability and for drones to carry goods and perform services.

“The future of aerospace is cleaner, greener, and more efficient, and we want the U.K. to be the pioneers of new technology that will pave the way for increased electrification and autonomy in commercial aviation,” Clark is due to say in a speech in Bristol. Another 15 million pounds will be invested in GKN Aerospace Ltd.’s new Global Technology Centre in the southwestern city, according to his office.

Thursday’s announcement is the seventh “sector deal” under Prime Minister Theresa May’s Industrial strategy, the flagship economic policy announced a year ago, which is designed to leverage private spending on future technologies using government money. It follows an announcement of 1.3 billion pounds of spending in the life sciences sector on Wednesday.

Clark will say the strategy aims to reinforce an image of Britain as a “dependable and confident place to do business,” while warning that if Britain tumbles out of the European Union without a deal on Brexit, that reputation would be “at risk.” That’s an outcome that becomes more likely if Parliament rejects May’s deal on Brexit -- as it looks set to do next week.

“I know many of you will be watching developments in Parliament in the coming days,” Clark will say, before reassuring the aviation industry audience that the Cabinet is “intent on securing a good Brexit deal that delivers the certainty for business.”

©2018 Bloomberg L.P.