Chancellor Jeremy Hunt has strongly rejected the idea of the UK adopting a wide-scale subsidy-based economic policy akin to the approach embraced by the Biden Administration through the Inflation Reduction Act.
Instead, Mr Hunt advocates for a more “hard-headed” strategy aligned with Britain’s “industrial strategy.”
This approach avoids across-the-board state handouts.
During an interview with the Financial Times, the Chancellor emphasised the importance of investing in electric arc furnaces to reduce carbon emissions and protect a strategic industry.
Notably, Tata’s £500 million funding was contingent on the company committing an additional £750 million to develop its Port Talbot site in Wales, reflecting a focus on credible, long-term commitments.
Mr Hunt revealed that discussions were also underway with British Steel, which has similar operations in Scunthorpe.
However, the Chancellor was clear that these steel subsidies should not be interpreted as an attempt to replicate the $369 billion (£297bn) Inflation Reduction Act pursued by the Biden Administration, aimed at facilitating the US transition to a net zero carbon economy.
Mr Hunt said: “We are very clear, we won’t pursue the IRA subsidy bowl approach to economic policy.”