Is UK being left behind in global fight for investment?

When the US Congress passed Joe Biden's Inflation Reduction Act past summer, the measure seemed built connected bully intentions. Designed to boost America's greenish system and tackle clime change, the enactment included billions of dollars of subsidies for the acquisition of electrical cars and different eco-friendly products.

But a proviso that those subsidies volition lone beryllium disposable to consumers who bargain American-made products has enraged galore European nations. They spot it arsenic a thinly-disguised effort to drawback a stock of Europe's precocious tech manufacturing sector, including Britain's, by luring European companies to relocate factories to the US.

Welcome to the planetary contention for dominance of greenish technology, wherever the aboriginal of the satellite and the planetary system are entwined successful a perchance risky geopolitical game.

It is the US and the EU astatine loggerheads, but immoderate East Asian nations are registering their displeasure too, and immoderate successful British concern are wondering precisely wherever the UK stands successful this increasing row.

While astir countries subsidise greenish technology, it was Joe Biden's circumstantial targeting of funds solely for North American-made cars that spooked galore allies. People who bargain rider vehicles assembled successful America present suffice for a taxation recognition of up to $7,500 (£6,000) .

Many European firms were connected the database of investors successful US car accumulation work retired by Joe Biden erstwhile helium unveiled the Inflation Reduction Act. But it isn't conscionable cars that volition beryllium affected.

Svein Tore Holsether, the brag of Norwegian fertiliser shaper Yara, told me: "The US is putting successful spot a strategy that provides rewards for sequestering c and besides for switching to greenish accumulation astatine a level that truly incentivises and drives investment.

"Questions are being asked successful galore [European] companies close now. Where are the incentives? Businesses are shutting down. New investments are being made successful the US."

Meanwhile, the French concern curate Bruno Le Maire told me: "We shouldn't underestimate the interaction of the Inflation Reduction Act... [French President Emmanuel] Macron has been precise clear... First of all, we privation to get immoderate concessions from the US administration. We are friends and allies truthful we privation to get immoderate exemptions."

Mr Le Maire said helium would spell to Washington with his German counterpart soon to rise these concerns. In fact, German Chancellor Olaf Scholz has already held nonstop discussions with apical US senators and members of Congress implicit the Inflation Reduction Act.

Mr Le Maire besides wouldn't regularisation retired the thought of Europe launching its ain "Buy European" subsidies for greenish tech successful response.

"Everyone understands that astatine immoderate constituent successful strategical sectors similar greenish industry, determination is simply a request to put much and to person a benignant of European buyback."

Leo Varadkar, person of Ireland, traditionally the closest US state successful Europe, was much direct. He said his state was "not happy" astir the Inflation Reduction Act.

"There volition person to beryllium a effect from the European Union and that volition astir surely impact providing authorities assistance and subsidies to European businesses. The trouble with that is you extremity up successful a subsidy war, a subsidy competition," helium said.

What is wide is that the EU is astir to respond to the monolithic American plan, contempt concerns among members astir sparking a commercialized war. And the White House is alert of the issues, having acceptable up a US-EU task unit to see them.

Where the UK stands successful each of this is little certain.

While the BBC understands that some the Business and Trade Secretaries person raised their concerns with their US counterparts, their precise demands are unclear. The Business Secretary Grant Shapps says the UK doesn't request a US-style bundle of greenish incentives, due to the fact that the UK is already "ahead of the game".

"Actually we've done our concern to get renewable energy, which is what the US Inflation Reduction Act is each about. We've done it a decennary ago," helium told me.

"Which is wherefore we don't conscionable person the world's largest offshore windfarm, we've got the 2nd largest and the third, the 4th and we've got different coming on that's bigger still."

He's besides assured the UK won't beryllium overlooked successful what whitethorn extremity up being an EU-US carve-up connected this issue.

He said helium had besides spoken to his other fig successful the Biden ministry, Climate Envoy John Kerry, and Mr Shapps says overmuch of what the US is doing is welcome. "The bits that really could impact us, the protectionist bit, they're the edges that request to travel disconnected [this caller bill]."

The existent enactment from leaders that person discussed the Inflation Reduction Act with their US counterparts is that this was each an accident, and successful drafting this authorities the US "just forgot" astir Europe and committed an economical "half aggression".

The reassurance has been that this was each aimed astatine China, not Europe. But determination is nary uncertainty that the heads of large European manufacturers are being turned. And portion the needs of nett zero bash thin towards much of Europe's manufacturing being done successful Europe, and likewise for North America, determination is simply a reddish enactment that shouldn't beryllium crossed, according to 1 European leader.

If European export production, concern and jobs commencement to migrate implicit the Atlantic, things could get sticky, they told me.

There's besides interest this won't extremity with "green technologies". The proviso concatenation bottlenecks sparked by the pandemic person made countries rethink their reliance connected East Asia, and not conscionable China, for manufactured goods.

Spades are going into the crushed crossed the EU and the US connected caller facilities for the accumulation of microchips, with large occidental tech manufacturers attracting immense subsidies. Europe calls this "strategic autonomy", the Americans telephone it "friend shoring" oregon the restoring of proviso chains to affable nations.

It signals the redirection of monolithic flows of concern distant from their existing homes astatine a clip erstwhile galore industries are undergoing immense transformative change. This process could alteration the scenery of satellite manufacturing for a generation.

Some successful British manufacture fearfulness an EU-US carve-up not conscionable implicit electrical cars, but microchips and different captious technologies. And it is wide that the "globe" which "global Britain" sought to prosecute aft Brexit has changed significantly, raising rather cardinal strategical questions astir Britain's aboriginal successful the midst of it all.