The UK government needs to set up a Dragon’s Den style “national investment fund” for green technology firms to avoid falling behind the US and EU in the global race to net zero, the Institute for Public Policy Research (IPPR) has said.
The proposed fund would provide equity finance to firms, supplying funding in return for the state becoming a part-owner of the business and sharing in its success and future profits.
IPPR Centre for Economic Justice head George Dibb warned, “it’s time the UK steps up” as the US and EU are already making “making major investments to secure the manufacturing and technologies of tomorrow.”
“Our proposal for a national investment fund is a practical way for the UK government to crowd-in private sector investment by strategically supporting companies and taking a share in their future success,” Dibbs added.
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The IPPR say the 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.
IPPR associate fellow Simone Gasperin argues the national investment fund is a “policy proposal of our time.”
“The UK needs to finance and coordinate strategic industrial policy projects that will deliver a net zero transition through economic prosperity and inclusion.
“The cost of inaction on people’s livelihoods will be too high, while there are huge opportunities to be captured by the government co-investing with private companies,” he added.
Naked Energy CEO Christophe Williams agrees that “the cost of inaction” on people’s livelihoods are too high to slow down efforts to deliver a net zero transition.
“If the UK wants to keep pace with the US and Europe, we must now pull out all the stops and take every opportunity to invest in green energy,” he said.
“Reliable government funding for renewable infrastructure would dramatically increase investor and business confidence and help those struggling to pay rising energy prices,” Williams added.
