Jeremy Hunt accuses Joe Biden of starting a ‘distortive’ global subsidy race as Chancellor swipes at US President’s $400bn green investment package
- Jeremy Hunt hits out at ‘protectionism creeping back into the world economy’
Jeremy Hunt has swiped at Joe Biden’s $430billion green investment package as the Chancellor accused the US President of starting a ‘distortive global subsidy race’.
Mr Biden signed the Inflation Reduction Act into law in August but the huge bundle of tax incentives, grants and loan guarantees has caused global anger.
Much of the fury at Mr Biden’s £348billion of green investments has centred on the restriction of a tax break for electric vehicle purchases to only those assembled in North America.
There are fears of a devastating impact on UK car exports to the US.
In a dig at Washington DC, Mr Hunt hit out at ‘protectionism creeping back into the world economy’ as he unveiled the first part of the Government’s plan to respond to the IRA.
The Chancellor has promised a fuller response to Mr Biden’s action in the Autumn.
Jeremy Hunt hit out at ‘protectionism creeping back into the world economy’ as he unveiled the first part of the Government’s plan to respond to America’s Inflation Reduction Act
Much of the fury at Joe Biden’s £348bn of green investments has centred on the restriction of a tax break for electric vehicle purchases to only those assembled in North America
The US President signed the Inflation Reduction Act into law in August but the huge bundle of tax incentives, grants and loan guarantees has caused global anger
‘Our approach will be different — and better,’ Mr Hunt wrote in an article for The Times.
‘We are not going toe-to-toe with our friends and allies in some distortive global subsidy race.
‘With the threat of protectionism creeping its way back into the world economy, the long-term solution is not subsidy but security.
‘Yes, we will continue to back industries of the future, however, we will target public funding in a strategic way in the areas where the UK has a clear competitive advantage.’
The Chancellor acknowledged taxpayer support was ‘important to kick-start new industries’ but said there was a need to ‘leverage billions more in private capital’.
Mr Hunt added ‘the British way’ was ‘not massively distortive subsidies, but fantastic science, innovation-rich companies and a pro-growth regulatory regime — powered by private capital from our global financial centre’.
The Government is investing £30 billion to support ‘our green industrial revolution, with an additional £6 billion for energy efficiency, and up to £20 billion for carbon capture, utilisation and storage’, the Chancellor wrote.
It came on what has been dubbed the Government’s ‘green day’ when ministers are unveiling a blitz of energy announcements.
Labour’s shadow climate and net zero secretary Ed Miliband said: ‘What was billed with huge hype as the G’overnment’s “green day” turns out to be a weak and feeble groundhog day of re-announcements, reheated policy, and no new investment.
‘These announcements are most notable for their glaring omissions: no removal of the onshore wind ban, which is costing families hundreds of pounds on bills, no new investment for energy efficiency which could cut bills, and no response to the Inflation Reduction Act which could help Britain win the global race for clean energy jobs.’
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