Institute of Directors calls on Government to take inspiration from Biden’s Inflation Reduction Act

Frustrating by the lack of incentives for the development of green industries and technologies, the Institute of Directors have called for UK version of America’s  (IRA). In a recent survey of IoD members, nearly eight in 10 businesses supported subsidies.

The act, President Biden’s signature legislation which will spend nearly $369 billion on clean energy and climate priorities was described by Dr Roger Barker, Director of Policy at the Institute of Directors as a ‘game-changer’.

He said: ‘It cannot be ignored by UK policy makers. 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.

859 IoD members responded to the question ‘Should UK government should subsidise green industries and innovations that take place within the UK?’

• 44.0%  Yes, because we need a step-change in how we tackle climate change
• 34.9%  Yes, to level the playing field with the EU and the US
• 12.8%   No, because there are better uses of taxpayer resources
• 4.2%     No, because this is a protectionist policy so should be discouraged

Dr Roger Barker added: ‘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.

‘A particular concern is that short-term budgetary concerns will override the strategic imperative of establishing market leadership positions in green business. 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.’

This comes as ExxonMobil chief executive Darren Woods tells the CERAWeek energy conference in Texas, that the company is reviewing its role in Europe following new increases in windfall profits taxes and as it increasingly invests more in the US.

Reporting from the conference, Bloomberg added: ‘in the hallways, meeting rooms and reception areas…this week, oil and gas executives can’t stop gushing about the opportunities unleashed by the Inflation Reduction Act.’