UK will not follow Biden’s ‘subsidy bowl’ economic policy, Chancellor says
The government’s £500m intervention into Britain’s biggest steelworks is not a sign that ministers are set to follow Joe Biden’s “subsidy bowl” economic policy, the Chancellor has said.
Jeremy Hunt insisted that the financial backing for Tata, the Indian conglomerate owner of the Port Talbot steelworks in South Wales, came after “very credible commitments” were received about its own £750m investment plans.
It comes after the government announced it would pump up to £500m into the steelworks under plans to produce “greener” steel, but up to 3,000 workers are set to lose their jobs.
Tata will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.
Speaking to the Financial Times, Hunt said: “We are very clear – we won’t pursue the Inflation Reduction Act (IRA) subsidy bowl approach to economic policy.
“We are very hard-headed. We will do what is right for the long-term interests of the UK.”
The Democrat president’s IRA has been hailed as a major shift in American economic policy, with the green subsidy push winning praise in the UK from Sir Keir Starmer’s Labour.
The opposition has been particularly critical of what it says is the lack of an industrial strategy from Rishi Sunak’s government.
The Chancellor told the paper that the Conservatives’ approach on industrial strategy was “alive and kicking”.
“The UK government is taking a very holistic approach when it comes to industrial strategy,” he said.
He insisted that Friday’s steelworks announcement was not a sign that the government was looking at “big pots of subsidies” for other key British sectors.
But he added: “Where there’s a strategic opportunity to progress, we will take it.”
Press Association – Dominic McGrath