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Revenues from North Sea gas and oil should be taxed to help establish a dedicated net zero investment fund, according to the Institute for Public Policy Research (IPPR).
The thinktank calls for the establishment of a National Investment Fund which it claims is needed to prevent the UK from “falling behind in the global race to achieve a net zero economy”.
The IPPR’s new 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 fund would provide finance for investment projects in green manufacturing.
In doing so, the thinktank claims it would encourage private companies to make strategic investments that they would not otherwise make.
Simone Gasperin, IPPR associate fellow, said: “The National Investment Fund is a policy proposal for 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.”
The thinktank proposes that the investment fund is initially set up by Treasury. However, it says that 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.
George Dibb, head of the IPPR Centre for Economic Justice, said: “For the UK to hit net-zero our households and businesses will need to buy new green products – from electric cars to heat pumps. We have a choice: do we want to make those products in the UK with all the jobs and prosperity that come with green manufacturing, or do we want to import them from abroad?”
The report points to initiatives in the US and EU and warns that the UK “will remain on the starting blocks of the race to capture the green industries of tomorrow” unless it acts soon.
It echoes statements made by Energy UK in a recent analysis which warned that the UK is at risk of falling behind other countries in its push for a net zero economy.
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