Autumn Statement polling: MPs and business leaders agree Government U-turns damaging to investor confidence in UK

The finding is backed up by separate polling conducted by Focaldata for ECIU which found half of business leaders (50%) believe the Prime Minister’s recent ‘U-turns’ on net zero will negatively affect business confidence in making investments in the UK [2].

Almost nine in ten MPs (87%) believe the UK economy had not grown fast enough in the past few years. More than two-thirds (77%) say the UK economy has not seen enough investment in recent years, with the same number (77%) agreeing that to grow the economy the UK will need to invest more.

Among business leaders, there is support for recent Government decisions to invest in a battery plant for electric vehicle manufacture and to help Port Talbot steel works transition to electric arc furnaces (66%), saying the decision “enhances business confidence in the UK”

Likewise, there is similar support among business leaders for Labour’s plan to gradually ramp up investment in the green economy to £28billion per year by the end of the next Parliament, with two thirds (66%) agreeing that “right now, this plan brings more opportunities than risks”. Half (48%) of Conservative MPs think the USA’s Inflation Reduction Act, a series of tax cuts and grants to support the country’s net zero economy to grow, was having a negative impact on investment in the UK.

A clear majority (79%) of business leaders want to see the Chancellor bring forward a similar green investment package to that of the Inflation Reduction Act in the United States.

Nearly two thirds (63%) of business leaders see the UK as being in a global net zero race with the United States, European Union and China and the Government needs to take action in order to “keep up”.

Of the sectors that present the biggest growth opportunity for the UK in the next five years, MPs picked renewables and clean technology top with just under two thirds (62%) selecting it.

Alasdair Johnstone from the Energy and Climate Intelligence Unit said: “Recent Government U-turns on net zero have left investors shaken, and questions remain as to whether the Chancellor will make good on what he previously promised in bringing forward a bold package for the sector. The US is dragging investments away from the UK with its Inflation Reduction Act, and British business is clear that it wants the UK to fight back with its own plan to encourage clean industries to set up in the UK. Will Jeremy Hunt muster the tax breaks, investment and avoid any further U-turns to do that? All eyes are on the Autumn Statement”.

Earlier in the Year, Jeremy Hunt unveiled the “Powering Up Britain” plan, which he said was the “first part of the response to the challenges created by the Inflation Reduction Act”. He also committed to a fuller national response at the Autumn Statement [3].

UKSIF Chief Executive, James Alexander, said: “Investors continue to require clear and consistent government policy and messaging if they are to help finance at scale the transition to a thriving low-carbon economy.

“It is encouraging to see MPs across political parties recognise this, although recent policy U-turns on net zero risk further damaging investor confidence in the growth of the green economy.

“The Chancellor should urgently set out the UK’s overdue response to the U.S Inflation Reduction Act and similar measures adopted in other jurisdictions, such as the EU, Canada, Japan, and elsewhere.”