LONDON (Reuters) – British finance minister Jeremy Hunt said on Tuesday the United States’ Inflation Reduction Act, that promises hundreds of billions of dollars of subsidies to green industries, was a “very real competitive threat”.
There are concerns in Europe that the $369 billion of subsidies for electric vehicles and other clean technologies could put companies based on the continent at a disadvantage.
Hunt said after the financial market turmoil of last year, which led former Prime Minister Liz Truss to resign, the government does not have large sums of money to provide similar subsidies.
But he said the government would announce in the next few months some policies to help shield companies based in Britain, including looking at unlocking at 5 trillion pounds ($6 trillion) in pension funds to support the industry.
“This is not a time when it’s going to be easy for us to access the GDP equivalent of $369 billion,” Hunt said, speaking at a green energy conference in London.
“We have to remember in that equation that the U.S. is somewhat coming from behind, because the previous president was not remotely interested in net zero,” Hunt said in response to a question on the Inflation Reduction Act.
“So there is some catch-up element in what the U.S. is doing, but it is a very real competitive threat.”
Asked when the British government policy response could be announced, Hunt told reporters: “In the next few months, we are not hanging around on this.
He added: “We recognise that it is creating challenges, we don’t agree with every aspect of it, but nor do we have any doubt in our ability to compete and so we need to let everyone know what the plan is.”
($1 = 0.8259 pounds)
(Reporting by Andy MacAskill and Farouq Suleiman, writing by Sachin Ravikumar; editing by William Schomberg and Emelia Sithole-Matarise)
