Jeremy Hunt unveils green technology plan to ‘power up’ UK - with swipe at Joe Biden’s ‘distortive’ subsidies
The Chancellor announced plans to boost offshore wind and carbon capture but said “we will not toe-to-toe” with allies in “some distortive global subsidy race”
and live on Freeview channel 276
Carbon capture technology and boosts for offshore wind will form the central plank of the “power up Britain” plan, the Chancellor has said.
The US President’s $430 billion (£348 billion) package is an attempt to make the economy environmentally friendly with tax credits for green technology, but it has strained relations with European economies, including the UK, which have been frozen out of US markets.
Writing in The Times, Hunt said the UK is “not going toe-to-toe with our friends and allies in some distortive global subsidy race.”
He argued that the long-term solution to the threat of protectionism was “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 said.
What does the green energy scheme include?
Hunt said the government is investing £30 billion to support the UK’s “green industrial revolution, with an additional £6 billion for energy efficiency, and up to £20 billion for carbon capture, utilisation and storage”.
Energy Security Secretary Grant Shapps said the full plan, due to be published on Thursday (30 March), would set out how the government plans to “fix” the problem of securing cheap and reliable energy, as well as a vision of how the country can export its “green growth expertise to the world”.
New green hydrogen production projects also feature prominently alongside plans for the establishment of Great British Nuclear.
The government also pointed to efforts to cut household bills – including offering £5,000 grants towards heat pump insulation and extending the scheme to 2028.
While more than £380 million will go towards improving the number of electric vehicle charge points.
Hunt said: “Ultimately, the best and only way to ensure our energy independence is to invest in domestic sources of energy that fall outside (Russian President Vladimir) Putin or any autocrat’s control. We will do that by pulling every lever at our disposal to scale up cheap renewables and new nuclear, while maximising economically viable North Sea oil and gas as we transition.”
The first projects will be announced to rollout the first carbon capture technology, as well as the fifth round of the UK’s world-leading scheme to incentivise investment in renewable electricity.
The plan will also aim to build a stable environment for businesses to invest and grow in the transition to electric vehicles and sustainable aviation fuel.
It hopes to boost the country’s energy security and independence while reducing household bills for the long term and maintaining a world-leading position in achieving net zero.
What’s been said about the plans?
The Chancellor’s update to the green finance strategy quickly drew criticism from Labour.
The shadow climate and net zero secretary Ed Miliband said that the strategy placed the UK “outside the emerging mainstream” and accused the Chancellor of “waving the white flag in the global race for green jobs”.
He said: “Other countries are matching the ambition of the US, UK business says we must, but Tory dogma says No. Britain can’t afford a government that will make us losers in this race.”
“From Washington to Berlin… modern industrial policy requires active government, investing in partnership with business. Britain can’t afford another 5 years of this approach.”
Why has Joe Biden been criticised?
The Chancellor said Britain will not go “toe-to-toe” with the US and the European Union by offering billions in green subsidies and tax breaks.
Hunt added the UK will instead focus on incentivising private investment and a “pro-growth regulatory regime”.
The US Inflation Reduction Act (IRA) set out £300 billion in green subsidies through grants, loans and tax credits. While the EU Green Industrial Plan offers £200 billion in loans to businesses to invest in green technology.
The government fears that the £4.3 billion car export market to America could be destroyed because the US plans to subsidise companies investing in net-zero products made there but not those made in Britain.
Hunt said: “Our approach will be different — and better.”
The government will seek to “leverage billions in private capital”, including from pension funds.
He added: “In a sense, this is ‘the British way’. 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.”