Carbon costs

Taxes to rise to pay for Britain’s eco revolution

The Prime Minister has unveiled his carbon targets (pic: Downing Street)

Boris Johnson’s green revolution will come at a price as taxes are expected to rise to pay for the transition from fossil fuels.

The Treasury is preparing the country for how much it will cost to achieve the targets in the PM’s Net Zero strategy.

Rishi Sunak, the Chancellor, is already looking at a £37 billion-a-year black hole in its finances because of loss of revenue from fuel duty. More money will be needed to decarbonise the economy.

Heating bills are likely to rise – possibly by more than 50% – as households are forced to replace gas boilers.

New taxes such as road pricing are under consideration while poorly-insulated homes may struggle to qualify for a mortgage as lenders are forced to disclose the energy performance of properties on their books.

Rishi Sunak

Rishi Sunak: warning

Treasury analysis of the Net-Zero Strategy says the plans would mean “the loss of significant amounts of tax revenue as the economy shifts away from the use of fossil fuels”.

Fuel Duty and Vehicle Excise Duty will no longer applicable, and no explicit plans have been put forward to fill a £37billion gap left by these two taxes.

The Net Zero Strategy will see UK powered entirely by clean electricity by 2035, subject to security of supply, while also outlining plans for a wave of investment into wind power.

There are huge commitments to electric charging points, more wind power, and a three-year £450m Boiler Upgrade Scheme, which will see households able to apply for grants worth £5,000 to change their boilers to more environmental friendly heat pumps.

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