UK chancellor swipes at Biden’s ‘massively distortive’ Inflation Reduction Act
LONDON — The U.K. won’t go “toe-to-toe” with Joe Biden’s multi-billion-dollar Inflation Reduction Act (IRA) in “some distortive global subsidy race,” declared the country’s chancellor, Jeremy Hunt.
In an op-ed in the Times newspaper on Wednesday, Hunt took a fresh swipe at the IRA, which offers billions in subsidies and tax credits to try to incentivize take-up of electric vehicles in the U.S. and build up green infrastructure.
The plan has European and British carmakers particularly spooked about the impact on their own industries of the massive help for U.S. firms. Britain is already pushing for carve-outs, while the EU has primed its own set of green subsidies in response.
But Hunt — whose administration is today unveiling a raft of energy security and climate change policies — insisted the world was “now playing catch-up” with the U.K.’s own green energy investment.
Hunt told MPs Wednesday that the U.K. will unveil a full response to the IRA in the fall. And, writing in the Times, he claimed the U.K.’s approach “will be different — and better.”
He added: “We are not going toe-to-toe with our friends and allies in some distortive global subsidy race. With the threat of protectionism creeping its way back into the world economy, the long-term solution is 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 U.K. has a clear competitive advantage.”
It’s not the first time a British Cabinet minister has taken aim at the U.S. plan. Business and Trade Secretary Kemi Badenoch told POLITICO last month it won’t help the U.S. counter the rise of China and could create a “single point of failure” in key supply chains.
The opposition Labour Party this week unveiled its own response to the IRA should it win power — and urged the government to “stop moaning” about Biden’s plan.