Business leaders call for UK version of Joe Biden’s Inflation Reduction Act
In total, 78.9% of the 859 Institute of Directors (IoD) members who were polled backed the idea. Most of those in favour said they supported the plan because it would help tackle climate change, while a significant minority of those in support said it would “level the playing field with the EU and the US”.
Of those who opposed the plan, around two thirds said there were better uses of taxpayer resources than green subsidies, while the remainder said it was a “protectionist policy”.
IoD director of policy Dr Roger Barker said the UK is lagging behind the US and the EU, which already have similar schemes in place.
“The Inflation Reduction Act in the US is a game-changer which cannot be ignored by UK policy makers,” he said. “It provides substantial incentives for companies to pursue green innovations and green technologies in the United States rather than in the United Kingdom.
“The EU is also raising the stakes through its ‘Green Deal Industrial Plan’ which, amongst other things, is proposing a significant relaxation of the EU’s state aid rules when it comes to investment in green technology.
“In 2021, Prime Minister Boris Johnson announced that the UK’s strategy was to ‘lead the world in ending our contribution to climate change’. However, we have now reached a situation in which that rhetoric needs to be converted into substance.”
With ChancellorJeremy Hunt to announce the spring budget next week, Barker said he was concerned that Hunt would avoid major long-term investment plans, focusing on “short-term budgetary concerns” instead.
“A particular concern is that short-term budgetary concerns will override the strategic imperative of establishing market leadership positions in green business,” he said. “It’s imperative that government and the private sector work together, otherwise the UK will find itself left behind in the accelerating race to lead the green economy.
“The UK deserves nothing less than its own version of the Inflation Reduction Act – to ensure that the UK becomes the global location of choice for all forms of green investment.”