Pressure on Hunt rises as CEOs criticise lack of investment support before budget

The chief executives of three of the UK’s biggest companies have criticised the government’s energy policy for failing to spur investment, as pressure mounts on the chancellor to announce pro-business measures in the budget next week.

Shell boss Wael Sawan, Miles Roberts, the chief executive of packaging company DS Smith, and Keith Anderson, the chief executive of ScottishPower, said investment in energy was being held back by uncertainty and planning difficulties.

The comments come amid scrutiny of the UK’s attractiveness for business compared with rivals such as the US, which is planning large subsidies particularly for green energy.

The UK’s broader competitiveness has also been put in the spotlight after Shell reportedly considered moving its headquarters out of the UK and another FTSE 100 company, building materials supplier CRH, said it would move its primary stock market listing from London to New York.

On Monday, London-listed big data company WANdisco said it would also list its shares in the US. WANdisco, which has headquarters in Sheffield, England, and California, said it was “in the early stages of proactively exploring” the option of a dual listing, but that it was “committed” to keeping its listing on London’s Alternative Investment Market.

The budget on 15 March will offer the chancellor, Jeremy Hunt, a chance to try to address some of the criticisms levelled by the chief executives and steer the UK out of an expected recession.

The business leaders suggested the UK was being hampered by a lack of clarity, particularly regarding energy policy.

Roberts said the UK government’s long-term energy plan was unclear, which made it difficult for DS Smith, a large-scale energy user that is a member of the FTSE 100, to commit to investments in Britain.

“When we look at the UK we’re really saying to the government help us understand, ‘what are your short, medium, and long-term plans for energy, carbon zero?’ And then we can invest behind.”

The lack of clearly communicated strategy “makes our job of investing really that much more difficult, particularly when you compare it to other countries” such as Germany, France or Portugal, he said.

“There we’ve been able to get a lot more clarity, and that has resulted in some major commitments from us in new energy solutions, things around biomass, waste-to-energy plants,” he said. “We want to commit, but we’re finding it very difficult when we don’t know what the UK’s longer-term energy solutions are going to be.”

Shell’s Sawan compared UK “volatility” with the “10-year clarity and tangible, fixed incentives that people know to bank on” introduced by the US government, notably under the $369bn (£307bn) Inflation Reduction Act package of subsidies for green energy. Sawan also criticised the UK’s windfall tax on North Sea oil producers, a measure widely welcomed by environmental campaigners but hated by oil companies.

“When you have such volatility, it fundamentally saps your conviction around your ability to be able to see the returns that are required on that investment, and therefore you move your capital to the areas where you see healthy returns at lower risk,” he told the Times.

ScottishPower boss Anderson said there was a danger of the UK missing out on “an absolutely colossal opportunity” in offshore wind power because of the extended planning permission process. He said the delays meant energy companies were unable to roll out new investments quickly enough to address the energy crisis triggered by Russia’s invasion of Ukraine.

“It only takes us two years to physically build an offshore windfarm but the planning process is fundamentally flawed and means it takes us more like 10 years,” Anderson told the Financial Times.

Sir James Dyson, the vacuum cleaner billionaire, has also criticised the government’s plan to raise corporation tax on businesses. The tax on company profits will rise from 19% to 25% in April. He also criticised the UK for taking part in the minimum global tax plans being worked on jointly by members of the Organisation for Economic Co-operation and Development, in a letter to the chancellor shared with the Sun.

Dyson said: “The government has done nothing but pile tax upon tax on to British companies.

“Is it any wonder that the economy is teetering on recession, or that companies like AstraZeneca are deciding to take their investment elsewhere?”