Institute of Directors calls on UK Government to adopt its own Inflation Reduction Act

The Institute of Directors is calling on the UK government to be significantly more active in incentivising green industries and technologies.

In a recent survey of IoD members, nearly 8 in 10 businesses supported subsidies, either to achieve a step-change in how we tackle climate change or to level the playing field with the EU and the US.

In the United States, the Inflation Reduction Act gives substantial financial subsidies to invest in green technologies that are based in the US.

The EU has indicated it could relax its own state aid rules for green industries in response. To what extent do you agree that the UK government should also subsidise green industries and innovations that take place within the UK? Choose the one option that best represents your view. 

Dr Roger Barker, Director of Policy at the Institute of Directors, said: “The Inflation Reduction Act in the US is a game changer which 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."

Out of 859 responses collected between 10-26 February 2023, 44% said 'Yes, because we need a step change in how we tackle climate change' and 34.9% said 'Yes, to level the playing field with the EU and the US.'

12.8% said 'No, because there are better use of taxpayer resources' and 4.2% said 'No, because this is a protectionist policy so should be discouraged'

Dr Roger Barker continued: “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.”

Find out more here.