Sunderland visit comes as government names north-east as Britain’s second low-carbon economic area

Carmaker Nissan has pledged to invest more than £200m in a new rechargeable battery factory in Sunderland boosting the north-east of England’s drive to become a leading centre for green technology.

The region hopes to swap a legacy of shipbuilding, steam engines and coalmining for a pioneering role in the manufacture of electric cars and lorries.

Nissan’s announcement of plans for a rechargeable lithium-ion battery plant was accompanied by Gordon Brown’s confirmation that the government is making the north-east the UK’s Low Carbon Economic Area specialising in “ultra-low carbon vehicles.”

Against a backdrop of job losses and unrelenting uncertainty for workers at UK car factories, the prime minister hailed Nissan’s new battery plant as a step towards economic recovery.

He sought to raise hopes the Japanese company could choose its north-east base for a new European green car operation over a rival facility in Spain.

“Nissan’s investment in a new battery plant and its hope to start producing electric vehicles here in Sunderland is great news for the local economy, creating up to 350 direct jobs and creating and safeguarding hundreds more in the associated supply chain,” said Brown.

“Sunderland could now be a strong contender to produce electric vehicles for Nissan in Europe, and we will continue to work with Nissan to ensure this happens.”

Visiting Nissan’s Sunderland plant, Business Secretary Peter Mandelson said the north-east was already a specialised region for green cars.

The region’s designation as a Low Carbon Economic Area will mean establishing a training centre to teach the manufacture and repair of green cars, creating a research and development hub which collates work from five universities on using low carbon cars and opening a test track to try out new vehicles.

The north-east is the second such “economic area” to be created by the government after the South West of England – a centre of marine and tidal energy schemes.

Mandelson hopes the north-east green cars project will attract foreign investment and secure the UK’s place as “a global leader in high-tech manufacturing and automotive industries.”

Local government officials hailed the Low Carbon initiative as potentially creating 10,000 jobs over five years – a huge morale boost to an area hit by the rapid decline of its manufacturing industry and wider economic turmoil.

Margaret Fay, chairman of the One North East regional development agency drew parallels with the north-east’s industrial heyday.

“The first steam engines came from the north-east, we are good at firsts. We were the centre of excellence all those years ago with Stephenson and the Rocket. It’s like history repeating itself for the next generation.”

“We see this as the next iteration of the north-east economy. We have been through the very heavy industries of shipbuilding, steel, coalmining etc… Clearly manufacturing is at the heart of what we have always done in the region and this takes us back into what really are our core competencies. But this is manufacturing for the future.”

The agency has aspirations to turn the north-east into Britain’s green car training centre as demand rises for mechanics able to fix a new breed of electric vehicles.

“The training centre will go right from basic training, through apprenticeships, right up to masters and PhD’s,” said Fay.

The planned research and development centre will look into aspects of electric cars such as how far they can travel between charges.

AA president Edmund King says his group will feed its research into both the training and research centres.

“It was important to get a motoring organisation involved because electric vehicles will only be successful if consumers use them, understand them and trust them,” said King.

He quotes AA research suggesting almost two-thirds of drivers would consider buying a more fuel efficient car. Drivers in the North East and Northern Ireland were most likely to consider buying a green car.

But others are more sceptical that electric cars are worthy of such “green” government investment. Stephen Glaister director of the RAC Foundation points out the power to charge batteries will most likely be generated from coal or gas. “I think it is entirely unclear whether electric cars have anything to offer.”

“This may be about being seen to do something, it may be about creating new jobs, but I imagine it’s very risky in terms of the particular technology they are going into. There’s a long history of governments supporting different bits of the motor industry and having them fail.”

North-eastern company Smith Electric Vehicles, the world’s largest manufacturer of electric commercial vehicles, has questions about the government’s green car plans for other reasons.

Managing director Geoff Allison was puzzled as to why the government was not looking at manufacturers’ more urgent needs.

“Here today, now, we need investment. We have got electric vehicles, we need volume orders, we need subsidies. We need incentive from the government to help us get commercial vehicles on the road quicker. “In Europe they are all way ahead of us in terms of acceptability of electric vehicles.”

If we aren’t given support, the French will overtake us. You won’t be buying a British built electric vehicle, you’ll be buying a French one,” he says