Factory chiefs have expressed concerns that the subsidies implemented by US President Joe Biden have made it increasingly difficult to justify investing in the UK. According to a survey conducted by manufacturing group Make UK, three quarters of businesses stated that incentives provided by the US, the EU, and other countries have made investments in Britain harder to rationalize.
Under the Inflation Reduction Act, President Biden has invested billions of dollars into green subsidies, offering generous incentives for businesses involved in industries like electric vehicle manufacturing and clean power. Meanwhile, the EU has committed to spending €50 billion annually on its own green transition as part of its Green Deal, aiming to rival the US president’s plans.
In contrast, support for the green transition in the UK has been fragmented. While the government has struck tailored agreements with companies such as Tata Steel and Mini to support their transition to net zero, it has failed to establish an overarching industrial strategy. Over 50% of the companies surveyed by Make UK indicated that they would be more likely to invest if the UK had a formal industrial strategy in place.
Additionally, more than half of the companies revealed that they had refrained from investing in the past two years due to an uncertain business environment, even though they had available capital.
In conclusion, the lack of a comprehensive industrial strategy coupled with the allure of attractive incentives offered by other countries has made investing in the UK less appealing for businesses. The implementation of a clear industrial strategy and a more stable business environment could help encourage greater investment in the country’s manufacturing sector.
– Manufacturing group Make UK survey
– Inflation Reduction Act
– EU Green Deal
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