Lord Mandelson has backed the West Midlands to kickstart a boom in manufacturing after the region benefited from £19 million of Government funding for research into and development of low carbon vehicles.

The Business Secretary was in the region yesterday to designate it as a new Low Carbon Economic Area.

Visiting the International Manufacturing Centre at the University of Warwick to launch the LCEA, Lord Mandelson said the new funding will help secure the Midlands’ 10,000 existing car industry jobs.

He added: “This region has a very strong manufacturing tradition. Over the last 30 years in the face of intense international competition this region has worked very hard to ensure it is in a position at the top of supply chains for high value manufacturing, helping the UK to lead Europe in that field.

“We would like to see the Midlands continue doing what the Midlands has always done – pioneering innovation and new technology and applying science to generate jobs and prosperity.”

The Midlands is home to 65 per cent of the research and development carried out in the automotive industry in the West Midlands.

The sector employs 153,000 people and contributes £15.5 billion to the local economy, and Mick Laverty, chief executive at Advantage West Midlands, said it was crucial to benefit from that strong position.

He added: “This is great news and reflects the real strengths of the West and East Midlands regions in automotive manufacturing. Becoming a Low Carbon Economic Area will reinforce our growing reputation as globally competitive regions, which continue to develop cutting-edge green technologies and high technology industries upon which the future prosperity of all UK regions will depend.

“This latest announcement follows Advantage West Midlands’s central role in coordinating a successful bid to the new European Institute of Innovation and Technology (EIT), which will see a unique consortium of six European regions, including the West Midlands, five of Europe’s top universities and ten major companies deliver Europe’s trail-blazer on climate change - the 750 million euro Knowledge and Innovation Community, known as ‘Climate KIC’.

“That success is further testament to our growing reputation for promoting innovation and excellence in the emerging low-carbon and green technologies and helping the region to become a centre of excellence.”

Birmingham Post columnist professor Lord Kumar Bhattacharyya KB CBE, director and founder of the University of Warwick’s Warwick Manufacturing Group said:

“The car industry is facing huge challenges over the next decade. From emissions, the environment to safety engineering, a new generation of hi-tech but low carbon cars will be required. Today’s announcement is a crucial and most welcome government investment in low carbon automotive engineering which will help companies meet these global needs and provide them with new opportunities to grow as the world emerges from recession.

“The Midlands has a substantial, highly sophisticated, and advanced automotive industry and supply chain. This investment will bring researchers and manufacturers together to ensure that that industry and supply chain not only prospers but plays a leading role in building our low carbon future.”