Sunak to challenge Biden over US green subsidy package at upcoming talks

Sunak to challenge Biden over US green subsidy package at upcoming talks

13 Mar    Finance News, News

The UK and US will “work through” concerns about Joe Biden’s multibillion-dollar package of green subsidies, Rishi Sunak revealed ahead of talks with the US president today in San Diego.

The Prime Minister welcomed the Biden administration’s commitment to tackling climate change, but confirmed the UK had already raised concerns about the measures in the Inflation Reduction Act.

Sunak told reporters: “We have raised concerns with the US about the Inflation Reduction Act and we will work through with them as they think about how best to implement it.

The $430bn (£357bn) package is an attempt to make the economy environmentally friendly with tax credits for green technology.

It is the largest spending commitment towards renewables ever signed into law.

However it has strained relations with European economies, which have been frozen out of US markets – with the EU set to announce its own plans to compete with the package, including loosening its subsidy restrictions.

Meanwhile, Business Secretary Kemi Badenoch has criticised the bill as being “protectionist”.

“Those are conversations that the Government has been having with them for a while and will continue to have.”

Tory MPs have been raising concerns over the government’s lack of response to the Inflation Reduction Act – putting Sunak under pressure to act.

They have urged the `UK to compete with rival markets for green investment, amid growing fears the the country could lose out to the US and EU unless it offered a more attractive climate for renewable energy projects.

At a green energy conference in London last month, Chancellor Jeremy Hunt described the new US subsidies as a “very real competitive threat” and announced the the government would respond in the “next few months”.

He said: “We are not hanging around on this. We need to give all those guys you saw at the conference a clear sense of how we are going to respond to the Inflation Reduction Act.”

However, he warned it wasn’t going to be easy for the UK to access the “GDP equivalent of $391bn,” in line with the US spending commitments.

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