The Confederation of British Industry (CBI) is calling for action from the Government to accelerate green investments, reduce taxes and unleash private capital. 

Louise Hellem, CBI chief economist, said: “On net-zero we have a big opportunity; CBI research has found that up to £57bn of green growth opportunities could be achieved by 2030. But there’s a risk according to the OBR, a hit to UK GDP five times higher if we don’t act, than if we act early in the transition to net-zero.”

The CBI proposes green tax incentives to form part of a comprehensive strategy to promote high-growth green technologies. In particular, taxes for electric car, heat pump and biofuel manufacturers need to be cut to drive to net-zero, with a suggest level of corporation tax reduced to ten per cent rate than the blanket 25 per cent.

Additionally, a new ‘green innovation credit’ as well as an enhanced ‘green super-deduction’ could help unlock private sector R&D and investment and ensure the UK remains internationally competitive as it strives to build advanced projects such as gigafactories.

The CBI points out that in 2020 the UK was investing the biggest share of GDP of any country in energy transition. Since then, the UK has dropped down the international league table.

Rain Newton-Smith, chief executive of the CBI, said that making these moves would encourage investment and allow the UK to become a centre of next generation technologies: “We recognise the Chancellor is walking a fine line with limited fiscal headroom. While we cannot risk the economic stability that is the bedrock of growth, we must be ambitious in our vision with Government laying the foundations for a prosperous future.”

Making the comments ahead of the Budget, the CBI also called for a reduction in EV charging tax and VAT on home improvements that lead to better insulation.

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