Boris and Rishi’s eco war heats up
Treasury’s jobs warning over PM’s zero carbon aim
BORIS Johnson’s drive to tackle climate change could result in British jobs disappearing abroad, the Treasury has warned.
Leaked documents hint at growing tensions between the Prime Minister and Rishi Sunak over the ambitious target to cut emissions to ‘net zero’ by 2050.
Mr Johnson is due to publish his longawaited net zero strategy this week ahead of next month’s Cop26 climate summit in Glasgow.
The PM has become a passionate convert to the cause of climate change, but critics complain that he has done little to explain the cost of achieving his eyewatering targets.
Mr Sunak is said to be among those frustrated by the lack of candour about the likely costs involved.
Confidential Treasury documents warn that racing to net zero ahead of rival
‘A mad dash to net zero’
countries could make the British economy increasingly uncompetitive.
The documents, seen by the Observer newspaper, were used as part of a presentation to outside interest groups. They stated: ‘Climate action in the UK can lead to economic activity moving abroad if it directly leads to costs increasing, and it is more profitable to produce in countries with less stringent climate policies.’
The Treasury also suggested that while investment in green technology could provide some productivity gains, they would lead to ‘diminishing returns’ if the push to net zero is too fast.
‘Some green investments could displace other, more productive, investment opportunities,’ the papers said. ‘If more productive investments are made earlier in the transition, this risk may be accentuated later in the transition.’
The warning comes ahead of the publication of a series of green strategy documents this week.
Tory MPs are particularly nervous about the new heat and buildings strategy, which will propose new levies on gas as part of a plan to ban the installation of conventional gas boilers by 2035. Government sources insist the levies will be phased in over time and will not add to the overall burden as they will gradually replace existing green levies on electricity.
But many MPs fear they will face a backlash from voters over the cost of switching to ‘greener’ forms of energy. There is also concern that tough climate policies could force many firms to the wall.
Former minister Steve Baker has warned that the PM faces a political ‘fiasco’ if he fails to confront the cost of his green ambitions.
Craig Mackinlay, founder of the Net Zero Scrutiny Group of Tory MPs, said British jobs had already been lost overseas because of climate policies. He said the carbon emissions of shipping goods back to the UK which were once produced here was rarely taken into account. He added: ‘Further price rises on the back of a mad dash to net zero will undoubtedly accelerate these trends with the loss of jobs overseas. As ever, China laughs all the way to the bank.’
Privately, some ministers are also nervous about the pace of change.
A Treasury spokesman denied that the department was acting as a drag anchor on Mr Johnson’s climate plans.