The UK’s finance minister, Jeremy Hunt, said Britain would not go “toe-to-toe” with the U.S. and the European Union by offering billions in green subsidies and tax breaks but would look at incentivising private investment, the Times reported on Wednesday.
“Our approach will be different – and better. We are not going toe-to-toe with our friends and allies in some distortive global subsidy race,” the report said, citing Hunt. “With the threat of protectionism creeping its way back into the world economy, the long-term solution is not subsidy but security.”
The U.S. last year passed the Inflation Reduction Act (IRA) which offers $369 billion of subsidies for electric vehicles and other clean technologies.
The EU, which feared the IRA could put companies based in Europe at a disadvantage, set out its own Green Deal Industrial Plan in February.
Hunt last month called the IRA a “very real competitive threat” but said that after the financial market turmoil in the UK last year the government did not have large sums of money to provide similar subsidies.
Hunt said he had accepted all the recommendations by the government’s chief scientific adviser, Patrick Vallance, to boost investment in green industries including better grid connections to stop wastage of renewable energy, the Times reported.
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