Government investment has been announced that will help rail industry suppliers win new business, create jobs and generate economic growth.

The newly formed Rail Supply Group is to be given £500,000 of funding to ensure rail suppliers are able to win business internationally. This money will enable firms to capitalise on the £38 million being invested in UK railways and a similar wave of investment overseas.

Transport secretary Patrick McLoughlin, business secretary Vince Cable and Terence Watson, president of rail manufacturers Alstom UK, are to head the group, which includes figures from government and industry.

A mentoring scheme is to be set up to help small and medium-sized businesses compete against more established firms, working with up to 500 companies in the first year.

Business secretary Vince Cable said: "By working together with business over the long term, we can build confidence to invest, grow and create British jobs in one of our most important sectors."