Last week, the European Commission announced their response to the US’ Inflation Reduction Act, similarly offering up large subsidies and other incentives for green industries. So, where does this leave the UK?
Without being able to level the playing field, the UK runs a very real risk of falling behind in the investment and uptake of green tech. According to the CBI (Confederation of British Industry), by 2030, the UK will have lost out on an estimated £4.3bn of green growth market value in Europe alone, with the Automotive industry forecasted to lose circa £3bn in the assembly of EVs and batteries.
The Chancellor’s Spring Budget is vitally important and must be used as an opportunity to lift the UK out of the no-man’s-land between the EU and US. The plan must include significant capital allowances that make the UK an attractive business investment for firms looking to open up further operations, while also providing assurance that Corporation Tax will not rise. If the Government is insistent on refusing economic migration to solve the labour shortage, it must introduce bold market legislation that ensures employees are offered enough to stay in work.
It is abundantly clear that the UK will not be able to match the vast sums of money put up by the US and EU, so it must be strategic in stimulating demand for the emerging technologies such as hydrogen, CCUS and other sustainable fuels.
