UK and Rolls-Royce agree £2.5 billion programme to build next-generation jet engines in Britain

The UK government and Rolls-Royce have agreed a £2.5 billion, 10-year programme to develop a new generation of jet engines for single-aisle airliners and military aircraft, with the aim of building them in Britain for decades. Chancellor John Healey announced the deal on 28 October as part of his first Budget, according to a government press release.

The programme is jointly funded by the government and the company. The government describes it as a framework for future support rather than a payout: no grants have been awarded yet, and any future funding would depend on legal, value-for-money and affordability checks, ministerial approval, agreed terms with Rolls-Royce and compliance with subsidy control rules.

Jobs and the economic case

The government says the agreement supports about 3,300 existing jobs and could create tens of thousands of new ones in the decades ahead, most of them outside London and the South East. The roles would span engineering, research and manufacturing, and are accompanied by a jobs and skills plan.

Rolls-Royce estimates that a UK-built engine for these aircraft could add £120 billion to the economy over the lifetime of the programme. The company’s UK supply chain spending exceeded £3 billion in 2025, and the new agreement builds on a £100 million Aerospace Supply Chain fund, backed by the British Business Bank and industry, announced earlier this year. The focus areas include advanced materials, electronic systems, advanced manufacturing, robotics and artificial intelligence.

Why single-aisle engines matter

The press release says single-aisle aircraft are expected to be the largest segment of the global civil aerospace market, which the Aerospace Technology Institute projects at £220 billion a year by 2050. The UK aerospace sector employs about 113,000 people and contributes more than £46 billion a year to the economy, figures the release attributes to the industry body ADS Group.

Prime Minister Andy Burnham said: “Britain has always been an industrial powerhouse.” Business Secretary Jonathan Reynolds said “Reindustrialisation isn’t just a soundbite.” Rolls-Royce chief executive Tufan Erginbilgic called it “a landmark moment for the UK’s aerospace industry” and said the UK is one of only two countries that can design, develop, make and service commercial airliner jet engines.

Military engines and what comes next

The government says the engines are intended for military planes as well as civil airliners, but the release gives no aircraft type, customer or timetable for any military application. It also says a plan for Britain covering the next 10 years will be published later this year.