TheCityUK response to the Business and Trade Committee’s call for evidence on industrial policy and net zero
Our submission emphasises the UK’s service-dominated economy and the need for an industrial strategy that leverages our competitive advantages in this area. We propose how the government could deliver a net zero industrial policy that capitalises on the UK's commitment to reach net zero by 2050, focusing on the UK’s areas of competitive strength.
Our key recommendations for a net zero industrial policy are:
- Joint up design and financingof industrial policy to align with UK policies to attract foreign investment. Making the UK more investable will involve mainstreaming green investment and R&D incentives, creating a global talent hub, and streamlining regulatory processes.
- Leverage UK’s inherent advantages: A net zero industrial policy must recognise the UK's inherent advantages and build on them. To achieve this, government action is needed in three key areas: long-term policy, long-term certainty, and nurturing of competitive advantage.
- Long-term policy development: Developing a comprehensive strategy for the net zero transition.
- Providing market confidence: Ensuring tax regimes for green and sustainable finance are internationally competitive, providing long-term predictability and stability.
- Focusing on competitive industries: The government should support industries where the UK can excel, such as carbon capture, utilisation and storage (CCUS), green hydrogen, tidal and wind power, battery and hydrogen storage, and sustainable aviation fuel.
- Scaling finance for net zero: To de-risk and scale up low carbon investments, a net zero industrial policy should include government support, through blended finance solutions, price stabilisation mechanisms and first loss positions.
- Just Transition: Ensuring net zero achievement aligns with local job security and investment. This requires increasing investment in green jobs and skills, providing access to low-cost finance and working with local communities to ensure equitable benefits.
- International engagement: The government must continue to engage with other jurisdictions and international institutions to drive global convergence and interoperability on sustainability disclosures and reporting standards.
To read our full submission, click ‘Read here’.