Proposals to reduce CO2 emissions to ‘net zero’ as part of Boris Johnson’s plan to make the UK a ‘world leader’ in green policies have been thrown into disarray after Rishi Sunak raised objections to the eye-watering cost to the Treasury.
As part of the net zero plan –which would decarbonise the economy by 2050 – No 10 had been expected to publish in the spring details of the strategy for moving away from gas boilers ahead of Glasgow’s COP26 climate change conference in November.
But this has been delayed until the autumn amid mounting alarm about the bill.
The Chancellor – who is already looking for ways to pay back the £400 billion cost of the Covid crisis and the £10 billion a year required to reform long-term care for the elderly – is understood to have baulked at estimates of hitting net zero at more than £1.4 trillion.
The independent Office For Budget Responsibility (OBR) calculated the cost of making buildings net zero at £400 billion, while the bill for vehicles would be £330 billion, plus £500 billion to clean up power generation and a further £46 billion for industry.
After energy savings across the economy, this would leave a £400 billion bill for the Treasury.
The OBR also warned that the Government would need to impose carbon taxes to make up for the loss of fuel duty and other taxes.
The Prime Minister is considering issuing millions of households with ‘green cheques’ worth hundreds of pounds to compensate them for the cost of becoming more energy efficient.
It is the latest claim of tensions between No 10 and No 11 over the strains on the public purse.
Last week, The Mail on Sunday revealed Mr Sunak had warned that reforms to social care would not be affordable without the introduction of a new dedicated tax, equivalent to an extra 1 per cent on National Insurance.
After a backlash, No 10 shelved the plans until the autumn.
There are also ongoing discussions about how to reduce the predicted £4 billion cost of the ‘triple lock’ protecting the value of the state pension, amid fears that a surge in average earnings figures will push it unaffordably high.
Both the increase on National Insurance and extra green costs are controversial within Government because the burden of both fall more heavily on younger people and lower income households.
The summit is expected to bring together more than 100 world leaders to make commitments on how they intend to reach global net zero and limit global warming to 1.5C.
Yesterday, Allegra Stratton, Mr Johnson’s COP26 spokeswoman, promised that the details will be published before November’s meeting. She said the Prime Minister believed that ‘if we are going to transition to net zero it needs to be in a way the British public understand and are comfortable with’.
A Treasury spokesman said that No 10 and No 11 were ‘on the same page’ on both the triple lock and the need for an effective, affordable net zero strategy.
via The Global Warming Policy Forum
July 25, 2021