Rishi Sunak and Joe Biden announce green funding agreement

UK firms could gain access to billions in US green funding under new plans announced by Rishi Sunak and Joe Biden.

The Atlantic Declaration would allow British electric car firms access to new US green tax credits and subsidies, steps up co-operation on AI and includes a data protection deal.

The deal may be subject to approval by Congress and state-by-state agreement in the US for some areas.

Mr Sunak said the deal "sets a new standard for economic cooperation".

The agreement comes after hopes of a full-blown free trade deal were abandoned. On the plane ride over to Washington Mr Sunak said: "For a while now, that has not been a priority for either the US or UK."

UK officials insist a new targeted approach set out in the Atlantic Declaration, was a better response to the economic challenges posed by China and Russia's invasion of Ukraine.

Mr Biden's key policy is focussed on building up the US domestic energy market and contains $370bn (£297bn) to boost green technology production.

Under current policy, the IRA provides tax credit worth $3,750 (£3,000) for each electric vehicle (EV) manufactured in the US, or which use components mined, processed or manufactured in the country.

The UK is already a net exporter of raw materials for EV batteries to the US. But nations without a US trade deal are barred from accessing IRA subsidies.

The Atlantic Declaration commits the UK and US to working on a new Critical Minerals Agreement - which would give buyers of vehicles made using critical minerals processed, recycled or mined by UK companies access to tax credits.

The declaration says the agreement would be launched after consultation with US Congress.

Japan already has a similar deal, which allows Japanese firms to also swerve export duties on minerals used in producing EV batteries.

The declaration also includes a commitment to a "new UK-US Data Bridge" which would allow UK firms to transfer data freely to certified US organisations without paying a levy.

Downing Street estimate the change will affect around 55,000 UK businesses - translating into £92.4m in direct savings per year.

Mr Biden also supported Mr Sunak's plans to set up an international summit on AI safety which will be hosted in the UK later this year.

The prime minister said: "The UK and US have always pushed the boundaries of what two countries can achieve together.

"So it is natural that, when faced with the greatest transformation in our economies since the industrial revolution, we would look to each other to build a stronger economic future together.

"The Atlantic Declaration sets a new standard for economic cooperation, propelling our economies into the future so we can protect our people, create jobs and grow our economies together."

Both Mr Biden and Mr Sunak agree to carry out work to improve the resilience of supply chains and efforts will be stepped up to shut Vladimir Putin's Russia out of the global civil nuclear market.