In his recent speech to the London School of Economics the UK’s Secretary of State for Energy & Climate Change, Chris Huhne, acknowledged a sad fact about the recently commissioned wind farm at Thanet off the British coast: most of the value of building this wind farm, the world’s biggest, went to companies outside of the UK.
Mr Huhne says that this has to change, and so it should. The Secretary of State recognises that there are tens of thousands of jobs at stake in the fast expanding UK offshore wind industry, and that it is important we make sure turbine manufacturers can build what they need on the UK’s shores (instead of importing expensive finished products).The UK Government has just embarked on a programme of swingeing cuts across the public sector that is likely to also have profound consequences on employment in the private sector, since a fair proportion of public sector services is now outsourced to private companies. So, certainly we need to ensure that the UK plays a role in any burgeoning global industry that manufactures high value goods.
However, UK companies playing their part in this industry also need investment. Unfortunately, in recent years the UK Treasury has bungled incentives to invest in the kinds of fast-growing enterprises (both quoted and privately held) that would likely form essential roles in the UK’s cleantech supply chain.
Just a couple of years ago, the reward for investing in your own business (or a UK-based company quoted on London’s Alternative Investment Market) was 10% tax on any capital gains made from the investment provided the stake had been held for more than two years. This has now disappeared, to be replaced by rates varying between 18% and 28% depending on how much is earned.
If the coalition Government is serious about encouraging a cleantech industry in the UK, it needs to devise incentives for cleantech investors.
Jon Mainwaring
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