National Investment Fund is needed to boost investment in green technologies and achieve a net zero economy, says report
New body should take strategic stakes in firms to secure future jobs and prosperity from net zero transition
The UK is at risk of falling behind in the global race to achieve a net zero economy without strategic public investment in green manufacturing technologies, according to a new report by the IPPR think tank.
In the US the Biden administration has just marked the first anniversary of its Inflation Reduction Act, aimed at boosting domestic investment in clean energy technologies and infrastructure and creating green jobs. The EU has meanwhile responded with its own Green Deal Industrial Plan.
IPPR says without urgent government action, the UK will remain on the starting blocks of the race to capture the green industries of tomorrow. A new, green industrial strategy is needed, with the government setting a clear direction for investment that will deliver prosperity, levelling up, reduced emissions and restoration of nature.
The report, Growing green: A proposal for a National Investment Fund calls for a new UK-wide public body to help finance investment in net-zero industries. The proposed National Investment Fund (NIF) would provide finance for investment projects in green manufacturing. In doing so, it would encourage (or “crowd-in”) private companies to make strategic investments that they would not otherwise make.
The NIF would provide equity finance to firms, supplying funding in return for becoming a part-owner of the business and sharing in its success and future profits – analogous to the type of investment offered on the BBC’s Dragon’s Den.
Initial funding to the NIF itself would be provided by the Treasury, but it would be further supported by tax revenues from North Sea gas and oil, or by levies which IPPR is urging be imposed on share dividends and ‘buybacks’ - effectively diverting excess profits and “economic rents” from fossil fuel activities into productive investments in a future green economy.
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Posted On: 23/08/2023