The UK will never be able to match US President Joe Biden’s enormous package of green subsidies enshrined in his Inflation Reduction Act, a government minister said, adding that Britain would instead focus on targeted support in areas of expertise.
(Bloomberg) — The UK will never be able to match US President Joe Biden’s enormous package of green subsidies enshrined in his Inflation Reduction Act, a government minister said, adding that Britain would instead focus on targeted support in areas of expertise.
“We’re never going to have pockets as deep as IRA,” business minister Nusrat Ghani said in a Bloomberg interview, referring to Biden’s $370 billion of incentives and tax credits for electric vehicles and clean-energy projects. “This is a remarkable, eye-watering sum of money.”
Ghani’s remarks illustrate the difficulty ministers face in keeping to a minimum the damage to the UK’s green industries caused by the US package drawing investment away from Britain. The UK is drawing up a response to IRA, with details expected to be revealed by Chancellor of the Exchequer Jeremy Hunt in his Autumn Statement.
Energy Secretary Grant Shapps has previously described Biden’s plan as “dangerous” and warned against the world moving to protectionism. But British business leaders have called for extra help to encourage firms to stay in the UK, and the opposition Labour Party has criticized Rishi Sunak’s government for not responding faster.
Ghani said the UK aims to “focus on our areas of expertise and where we manufacture well.”
“We’re working very closely with industry on looking at advanced manufacturing, the adoption of AI, adopting new technologies,” she said, pointing to Tata Group’s decision to a build a £4 billion battery plant in the UK as an example of where Britain is succeeding.
That decision involved a financial incentive from the UK government that people familiar with the matter have told Bloomberg is likely to exceed £500 million. The government has refused to confirm the precise size of the funding.
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