Chancellor Jeremy Hunt should “urgently” announce the UK’s response to the IRA — the US green subsidy package — to support business confidence, investors have warned.
Business leaders overwhelmingly back the UK delivering a major investment deal like the Inflation Reduction Act (IRA) which gave tax cuts and subsidy grants to green industries.
It comes as the Chancellor Jeremy Hunt is preparing to deliver a package of fiscal policies in Parliament tomorrow, following hints he is set to cut business taxes in a bid to boost growth.
Focaldata polling found 79 per cent of 210 business leaders, all at director or manager level or above, wanted the UK to announce its IRA response when asked in early November.
Almost two-thirds (63 per cent) of business leaders, all from firms with over 1,000 workers, think the UK needs to keep up in the global net zero race with the US, EU and China.
While close to half (48 per cent) of Tory MPs say the IRA is having a negative impact on UK investment, according to YouGov research.
James Alexander, the UK Sustainable Investment and Finance Association (UKSIF) chief executive, said Hunt should “urgently set out the UK’s overdue response to the IRA and similar measures in other jurisdictions, such as the EU, Canada and Japan”.
The Chancellor unveiled his ‘Powering Up Britain’ plan earlier this which he said was the “first part” of the UK’s IRA response — and promised fuller details at the Autumn Statement.
It comes as polling also revealed a majority of MPs and business leaders think government U-turns are damaging to UK investor confidence, ahead of tomorrow’s Autumn Statement.
Almost three-quarters of MPs, or 72 per cent, believe that avoiding U-turns on policies is important to continuing confidence among investors in the UK, pollsters at YouGov found.
While 50 per cent of business leaders think Prime Minister Rishi Sunak’s recent U-turn on net zero is likely to negatively impact business confidence and investment in Britain.
Alasdair Johnstone from the Energy and Climate Intelligence Unit (ECIU) said: “Recent government U-turns on net zero have left investors shaken.
“Questions remain as to whether the Chancellor will make good on what he previously promised in bringing forward a bold package for the sector.”
Alexander added that a “clear and consistent” policy was needed in the low carbon transition and warned U-turns “risk further damaging investor confidence in green economy growth”.
The Treasury has been contacted for comment.