Sunak’s net zero change puts industry in a spin
Rishi Sunak opened a new rift with industry and Holyrood yesterday after rolling back the net zero timetable, saying he would not impose “unacceptable costs” on households.
The Prime Minister accused the political elite of not being honest with the public about the financial impact of the green agenda.
A ban on the sale of new petrol and diesel cars would be pushed back from 2030 to 2035, and new deadlines were put in place for the sale of new gas boilers.
His reversal of what had been a broad consensus on fossil fuels drew immediate criticism from across the political spectrum – including some in his own party – and from industry which said he had thrown their plans into disarray.
Car manufacturers warned that the change of plan would hit the sale of electric vehicles just as companies were investing billions in the technology.
There was fury at Holyrood which has more ambitious targets that are now likely to breach internal market rules.
Sources involved in drawing up the post-Brexit Internal Market Act have warned that cross-border travel to England would make Scotland’s plan to stick to its 2030 target redundant and impossible to enforce.
It is thought car manufacturers or Whitehall officials would have scope to pursue a legal challenge to the Scottish ban on diesel and petrol cars.
A backlash against Mr Sunak’s change of position prompted some Tory MPs and former Prime Minister Boris Johnson to warn that Britain risked losing its lead on green technology.
Mr Johnson, who introduced the 2030 electric vehicle target, said business needed to have certainty about the net zero commitments.
“Industry — such as motor manufacturing — are rightly making vast investments in these new technologies,” he said. “It is crucial that we give those businesses confidence that government is still committed to net zero.”
At a hastily arranged press conference in London following the leak of his new strategy, Mr Sunak said: “It cannot be right for Westminster to impose such significant costs on working people . . . without a properly informed national debate.”
He said that unless this approach were changed, politicians risked alienating the public and undermining the aim of net zero itself. He said he remained committed to net zero by 2050 but wanted to “bring people with us”.
He said: “If we continue down this path, we risk losing the consent of the British people and the resulting backlash would not just be against specific policies, but against the wider mission itself.”
He added: “We seem to have defaulted to an approach which will impose unacceptable costs on hard-pressed British families, costs that no one was ever really told about and which may not actually be necessary to deliver the emissions reduction that we need.”
Car manufacturer Ford said that it had invested £430 million in its British development and manufacturing facilities, based on a transition to electric vehicles from 2030. Lisa Brankin, Ford UK’s chairwoman, demanded “ambition, commitment and consistency” from the government.
Piers Forster, interim chairman of the government’s climate change committee, voiced “concern” about the changes, saying they were “likely to take the UK further away from being able to meet its legal commitments”.
Former cabinet minister Sir Jacob Rees-Mogg declared his support for the new policy. “The problem with net zero and having regulations coming in so quickly was that it was a scheme of the elite on the backs of the least well off.
“Rishi Sunak has changed that. He is going with the grain of the nation and moving for ‘intelligent net zero’ by 2050, but not putting in costly bans in the next few years,” he told the BBC.
Labour argued that delaying the 2030 ban on sales of new petrol and diesel cars would “cost consumers more” by preventing a switch to vehicles that are cheaper to run, saying it would reverse the policy.
Ed Miliband, shadow climate secretary, argued that Sunak “simply sees net zero as an obligation to be managed, not an opportunity to be seized. That is the way he behaved at the Treasury, and that is the way he’s behaving as prime minister.”
Critics noted that an incoming Labour government could scrap Mr Sunak’s new targets and revert to the existing plan, creating yet more confusion and chaos for business and industry.
Shevaun Haviland, director general of the BCC, said: “If we are to meet the challenge of making the UK Net Zero by 2050 then we must have pragmatic goals, that business can be confident they will be supported to reach.
“Companies want to address climate change but cannot plan for future investment if the sands keep shifting.
“This means political consensus about the goals, combined with pragmatism on the solutions. Constant tinkering with Net Zero policies will only have further negative impacts on business confidence and investment plans.
“Other countries and trading blocs are pouring billions into low-carbon technology, and we are getting left behind.
“But if we get this right, and play to our country’s strengths then there is huge opportunity for UK Plc. It is vital we have a long-term Net Zero strategy which Government must demonstrate it can stick to.”
Mr Sunak’s key changes:
- The ban on new petrol and diesel car sales is delayed from 2030 to 2035.
- Subsidies for replacing gas boilers with heat pumps will rise from £5,000 to £7,500 but Mr Sunak said the poorest fifth of households would never have to do so.
- New fossil fuel heating for homes off the gas grid will be banned in 2035, not 2026.
- Landlords will no longer have to ensure from 2025 that rental properties have a C-rated Energy Performance Certificate or better.