Businesses demand increased green investment for Britain: Bosses demand UK version of Joe Biden’s £300bn Inflation Cut Bill
Britain needs its own version of Joe Biden’s Inflation Reduction Act (IRA) to boost investment and compete with the United States, a leading business lobby has warned.
The Institute of Directors (IoD) has described the bill, which offers more than £300 billion in grants to companies investing in green industries in the US rather than countries like the UK, as a “game changer”.
The lobby group warned that the European Union is also “upping the ante” with its own green industrial plan.
Incentives: Joe Biden’s Cut Inflation Act offers over £300bn in grants to companies investing in green industries in the US rather than countries like the UK
And in a warning to Rishi Sunak and Jeremy Hunt ahead of the budget next week, he said the UK risked being left behind unless it introduced its own version.
Roger Barker, IoD’s policy director, warned Downing Street against letting ‘short-term budget concerns’ trump crucial investment.
“It is imperative that government and the private sector work together or the UK will find itself left behind in the accelerated race to lead the green economy,” he said.
“The UK deserves nothing less than its own version of the IRA to ensure the UK becomes the global location of choice for all forms of green investment.”
But speaking to the Tel Aviv Mail, Business Secretary Kemi Badenoch played down the idea of big grants.
“If we subsidize one industry, it means somebody else is not getting anything,” she said. “So I never lean in to try to make any promises to any particular industry.”
Passed by the US Congress in August, the IRA has spurred hundreds of billions in green deals and increased investment in sectors such as the oil and gas industry.
Investors take in £962m
Investors withdrew £962m from UK-focused equity funds in February, the third-biggest monthly outflow on record, as the FTSE 100 hit a record high, according to the Calastone Fund Network .
UK equity funds have seen net sales for 21 consecutive months, he said, but investors withdrawing cash put pressure on the London stock market as companies fret over UK valuations and turn to the United States.
Edward Glyn, head of global markets at Calastone, said: ‘The general air of pessimism over the UK’s economic decline, weak public finances, political chaos and rising corporate taxes seems to have accelerated a trend with constant outflows of UK funds and inflows to global funds.’
British companies are looking to set up in the United States to take advantage of subsidies.
Heavy equipment rental company Ashtead said yesterday it would increase capital spending in the United States, its biggest market, as it bets the law will boost construction there.
Chief Executive Brendan Horgan said: “Our business is doing well, bolstered by the growing number of megaprojects and recent US legislative acts.”
Building materials giant CRH announced last week that it planned to move its main stock market listing to New York from London.
Irish firm CRH, valued at £30bn, is increasingly focusing on America, where it delivers major infrastructure projects.
It comes as the UK tries to compete for its part of the ‘green economy’ and become a world leader in battery and hydrogen production.
Last week Jaguar Land Rover owner Tata Motors asked the government for more than £500m in grants to build a battery factory in Somerset.
IoD’s Barker said: “The IRA is an absolute game changer and will transform the entire US economy. Now is a moment of truth for the government.