Authorities should set up a national programme to invest in the UK's green technology sector, or Britain risks falling further behind the US, a leading think tank has said.
“Without urgent government action, the UK will remain on the starting blocks of the race to capture the green industries of tomorrow,” the Institute for Public Policy Research said in a report.
The report calls for the creation of a national investment scheme to mirror the efforts made by the US and the EU.
US President Joe Biden's Inflation Reduction Act (IRA), which was passed a year ago, aims to dramatically boost investment in clean technologies and create green sector jobs in America.
The EU's response to the IRA was its Green Deal Industrial Plan.
As such, the IPPR report said, it's now time for the UK to step up with its own national investment scheme, “with the government setting a clear direction for investment that will deliver prosperity, levelling up, reduced emissions and restoration of nature.”
“The UK is being lapped by the USA and EU – what we’re doing right now just isn’t working,” George Dibb, head of the IPPR Centre for Economic Justice told The National.
“Britain remains at the bottom of the OECD league table of business investment, and the latest figures show our green investment falling not rising.
“We need a change of approach. New public investment, designed to crowd in or co-invest with businesses, should be part of this plan.”
'Cost of inaction'
The proposed National Investment Fund would initially be funded by the UK taxpayer through the Treasury, the IPPR said.
Later, the fund would be supported by tax revenue from North Sea oil and gas companies, or by extra levies on share dividends and buy-backs, which would effectively divert “excess profits and “economic rents” from fossil fuel activities into productive investments in a future green economy”, the report said.
Simone Gasperin, associate fellow at the IPPR, said the fund was “a policy proposal for our time”.
“The UK needs to finance and co-ordinate strategic industrial policy projects that will deliver a net zero transition through economic prosperity and inclusion,” he said.
“The cost of inaction on people’s livelihoods will be too high, while there are huge opportunities to be captured by the government co-investing with private companies.”
Jeremy Hunt, the UK's Chancellor of the Exchequer, has singled out green technology as one of the sectors that has “the most potential for growth”.
There has been little concrete reaction to the Inflation Reduction Act in the US on the part of the UK government, although Mr Hunt is expected to outline a response in his Autumn Statement.
“Given the UK really hasn’t responded at all to the US Inflation Reduction Act or the EU green industry plan, the situation is now urgent,” Mr Dibb, told The National.
“The UK risks not just falling behind but being cut out of the future green economy unless it acts decisively now.”
Those inside the green and clean technology sectors agree. Christophe Williams is the chief executive of Naked Energy, a British design and engineering company involved in solar energy.
“If the UK wants to keep pace with the US and Europe, we must now pull out all the stops and take every opportunity to invest in green energy,” he said.
“Getting the UK back on track with its peers won’t be cheap, especially when we’re playing catch up.
“We are seeing the cost of inaction of previous decades today. We can’t let it happen again.”