Net-zero goals reviewed amid security fears Food retailer ‘Ministers should end green-related taxes’
Liz Truss moves to address fears that attempts to hit green goals by 2050 are damaging the economy
LIZ TRUSS has announced a sweeping review of Britain’s net-zero goals amid concerns the target to cut carbon emissions by 2050 is damaging the economy.
Ms Truss has appointed Chris Skidmore, a leading green Tory who signed the net-zero target into law, to examine whether it is fit for purpose.
The Prime Minister also launched a separate task force to reform the energy market with the aim of reducing the long-term cost of power.
The Prime Minister yesterday reiterated her support for the UK’S legally binding target to reach net zero by 2050, but said the review of the goal would ensure current policies were “pro-business and pro-growth”.
Mr Skidmore is expected to look at the impacts of net-zero policies such as carbon taxes on heavy industry, or the potential for new jobs and industries such as hydrogen or heat pump manufacturing.
It is also likely to examine the levelling up impacts of insulation and energy efficiency, given the unequal distribution of leaky homes in former Red Wall areas.
The review will be completed by the end of this year, and comes amid friction in the party over the netzero goals.
Some Tories argue the target is undermining the country’s energy security and its economic growth.
Separately Ms Truss has appointed Madelaine Mcternan, a former investment banker who was director general of the vaccine task force during the Covid crisis, to renegotiate overly lucrative contracts for renewable and nuclear power generators.
The Energy Supply Taskforce is aiming to strike a series of “cap and floor” deals that will guarantee minimum incomes for these businesses while also capping their profits at a set level, giving them enough certainty to offer lower prices over a longer time period. It would replace a system which currently allows the owners of some solar and wind farms to profit massively from record gas prices – even though gas prices do not affect their costs.
Under these existing arrangements, wind and solar farms built before 2014 can sell electricity at the market rate while also benefiting from government subsidies, allowing some to reap huge windfalls as prices surged this year.
The new deals that the Government wants these businesses to sign up to would be so-called contracts for difference, where they agree to set prices over a 15-year period. If the market price for power is below this level, the contract acts as a subsidy.
But when prices are higher, the energy producer pays the Government the difference, which will potentially help to lower bills.
Announcing that her other review into the economics of net zero will be led by one of its biggest proponents may allow Ms Truss to allay some of the concerns of both net-zero sceptics and the greener members of her party.
Mr Skidmore set up the Net Zero Support Group among Conservative MPS in response to vocal opposition from a small number of MPS who argue that the country is decarbonising too fast.
The Government said the review would “ensure we are meeting our Net Zero 2050 target in an economically efficient way, given the altered economic landscape.”
It added that the review would “ensure delivering the target is not placing undue burdens on businesses or consumers”.
When we built our new smoked salmon factory, having been evicted from our previous premises for the construction of the Olympic Park, our electricity prices were about £100,000 per annum.
Over 14 years until last September, our prices rose little by little to £200,000. When we came to renegotiate last year, the rate doubled to a horrific £400,000, and that was only if we tied in for three years. We had no option.
If ministers now step in and limit prices for business customers, we could be in a situation where those who are now tied down end up suffering.
The best way for ministers to approach this crisis from a business perspective is to end all greenrelated taxes, charges and subsidies. They can also help by introducing business rates holidays and NI holidays. Lance Forman, head of Forman & Field