£5bn investment by Jaguar Land Rover 'beginning of a new era'

• Among the 5bn investment in UK operations, 1,500 jobs will be created at Jaguar Land Rover's Halewood plant

The new posts will include 1,500 at the Halewood plant on Merseyside next year to support the launch of the new Range Rover Evoque, while the other two manufacturing sites at Castle Bromwich and Solihull in the West Midlands will be retained.

The company, owned by Indian industrial conglomerate Tata, also said it had plans to develop new models and announced a "landmark" pay and conditions deal with trade unions.

The agreement, which trade unions will recommend to their members, includes a two-year pay deal worth 5 per cent from next month, with a further rise of at least 3 per cent from November next year.

New staff in the manufacturing plants will start on lower rates of pay and receive lower shift premiums ,which the company said would increase flexibility.

The news came as the company revealed strong sales growth across the world for both Jaguar and Land Rover.

In September the group sold 19,528 vehicles, an increase of 16 per cent on last year. Jaguar sales for the month were 4,861, a rise of 10 per cent, while Land Rover sales were 14,667, up by 19 per cent.

As part of yesterday's investment announcement the company said the number of models in its range will be "significantly increased".

Jaguar Land Rover chief executive Ralf Speth said: "This is a triumph for all concerned. We have ambitious plans for growth and the success of our products around the world and this agreement will allow us to accelerate and realise those plans.

"The agreement is a great deal for our workers and the company and we can now really get on with working together to achieve an even more exciting future for the Jaguar and Land Rover brands."

He added: "Our parent company Tata supported us through the recession and our employees also made sacrifices but now we are seeing a great turnaround in the business. This is truly the beginning of a new era for Jaguar Land Rover."

Unite said it was "fantastic news" for the company and its workers.

Derek Simpson, joint leader of Unite, said: "This agreement is testimony to what a company can achieve when it works with its workforce and their union.

"Our members took some tough decisions and made sacrifices but they convinced their employer to invest in a shared future in return.

"The rest of UK manufacturing should take note. Reward your workforce's loyalty, build on the excellence and skills of UK workers, and your business will thrive."

Jack Dromey, Labour MP for Birmingham Erdington, which covers the Castle Bromwich plant, said it was "good news in bleak times".