A speech by the prime minister scheduled for Friday was hastily brought forward to Wednesday evening after advanced news of his plans broke.
In the event, his speech said pretty much exactly what the press reports said it would.
Lobby groups and vested interests howled in anguish but Sunak is banking on voters quietly thanking him for relieving them of substantial financial commitments that were about to land. London ULEZ expansion was not mentioned in his speech, but it provides context.
Sunak said that the UK remains committed to net zero by 2050 but we don’t have to do it the way that Boris Johnson said we should.
Under revised plans, the government will:
- delay the ban on the sale of new petrol and diesel cars by five years to 2035
- delay the ban on installing oil and LPG boilers, and new coal heating, for off-gas-grid homes to 2035, instead of phasing them out from 2026
- scrap policies to force landlords to upgrade the energy efficiency of their properties.
He has also raised the boiler upgrade grant by 50% to £7,500 to help households who want to replace their gas boilers with a low-carbon alternative like a heat pump.
He said that it would still be possible to buy second-hand petrol and diesel cars after 2035, just not new ones. It is not yet known whether this dispensation will also apply to construction and industrial machinery. If so, it will then be up to construction clients to specify what machines are used on their sites, rather than government diktat.
The prime minister said: “We’ve stumbled into a consensus about the future of our country, that no one seems to be happy with,” he said. “It cannot be right for Westminster to impose such significant costs on working people especially those who are already struggling to make ends meet and to interfere so much in people’s way of life without a properly informed national debate.”
“The risk here, for those of us who care about reaching net zero – as I do – is simple: 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, meaning we might never achieve our goal.
“We need a balance between incentivising businesses to innovate, so heat pumps become even cheaper, more effective, and more attractive. But without imposing costs on hard-pressed families, at a time when technology is often still expensive and won’t work in all homes.
“For a family living in a terraced house in Darlington, the upfront cost could be around £10,000. Even the most committed advocates of net zero must recognise that if our solution is to force people to pay that kind of money support will collapse, and we’ll simply never get there.”
Business groups hate change. It loves level playing fields, immovable goalposts, impartial referees and, in fact, just about any sporting cliché available.
Rishi Sunak has attempted to make the game fairer for the British taxpayer by moving the goalposts. Business groups are not happy.
Construction Plant-hire Association policy manager Chris Cassley said: “The announcement by the prime minister adds confusion to the construction equipment sector on its efforts to remove diesel from sites and move towards alternative fuels.
“Like all business sectors, the construction plant-hire sector has a key role to play in decarbonisation. CPA members want clarity and consistency in government policy when it comes to long established policies that impact on investment decisions, and the development of new diesel free technologies in construction plant. The prime minister’s speech does nothing to help this process and further throws into doubt future investment decisions and efforts to decarbonise the construction plant fleets of the future.”
The Construction Equipment Association represents machinery manufacturers and importers. Its chief executive, Suneeta Johal, said: “In recent years, the construction equipment sector has taken significant leaps in embracing alternative fuels and pioneering electric machinery. Our prevailing agenda revolves around decarbonisation, with a clear vision directed toward achieving net-zero emissions. Members of the CEA have collectively poured millions into research and development, striving to be at the forefront of sustainable innovation. It’s both disheartening and frustrating when, after such substantial investment and progress, the metaphorical goalposts seem to shift, making it challenging for our members to plan and execute their long-term strategies with confidence.
“Such announcements create ambiguity in the construction equipment industry, especially in its endeavours to phase out diesel and transition to alternative energy sources. Every industry, including the construction equipment rental sector, holds a pivotal position in the transition to a greener future. Our members at the CEA are in pursuit of transparent and stable governmental policies, particularly those that have been in place for a while and influence pivotal investment choices, as well as the innovation of diesel-free solutions for construction machinery. Regrettably, the prime minister’s remarks don’t facilitate this mission and instil further uncertainty about future investments and the green transition for upcoming construction equipment fleets.”
UK Green Building Council deputy chief executive Simon McWhirter said: “The anger and frustration at this latest policy U-turn has reverberated across industry today. Delaying green policies just means they’ll have to be implemented much faster, later, pushing up the cost for everyone – householders and businesses alike. The prime minister’s change in approach will also have a chilling effect on investment and skills training across green industries as they’re faced with yet another pull on the policy handbrake, just as our members and wider business were scaling up their pro-green activities across the economy.
“To really tackle this problem, the best way to bring down costs for households is to insulate homes, but the prime minister pulled the plug on measures to ensure landlords upgrade the draughty homes of renters – the group most affected by fuel poverty. Apart from an increase in the heat pump grant, no other measures were announced to incentivise and help households to insulate and make the transition from fossil fuel heating. We’re awaiting the long-overdue national strategy to upgrade all of our homes and buildings. But all we’ve had today is a further erosion of commitment and clarity from government.”
David Wells, chief executive of Logistics UK, which represents trucking companies, said: “Pushing back the deadlines to decarbonise, rather than making progress on the investment and policies logistics businesses need to implement the route to net zero, is unhelpful and will discourage private investment in the UK and its industries. There is still much to be done, from delivering a charging network to confirming plans for alternatively fuelled vehicles, but our industry remains committed to achieving net zero.
“As a sector, logistics works hard to deliver on time for all sectors of the economy – if new decarbonisation deadlines are to be achieved, it is vital for the health of the UK’s supply chain, and therefore our economy, that the government does the same. At a time when industry needs detail and action, delay just creates more uncertainty.”
Chartered Institute of Building policy director Eddie Tuttle said: “Decarbonising homes and the wider built environment is vital to reach net zero so it’s disappointing to hear the prime minister scaling back energy efficiency targets and the commitments made in the government’s own net zero growth plan published only six months ago, which refers to minimising reliance on fossil fuels.
“Energy consumption in buildings accounts for almost half of the UK’s carbon emissions so to deprioritise this issue is baffling when the government should instead be finding ways to support homeowners to retrofit their properties and improve their energy efficiency for the lowest possible cost.
“The boiler upgrade scheme has had very low take up and in our view, increasing the grant available to homeowners will make little difference, as the remaining 25% will still be unaffordable for many households amidst a cost of living crisis.
“If government remains committed to reaching net zero by 2050, as they say they are, then they must set out how they plan to achieve this without reducing the reliance on carbon-based fuels to heat homes on the scale and at the pace required.”
A dissenting voice was Michael Cook, group managing director of Leaders Romans Group, who said: “Whilst we recognise all individuals and industries must think differently and act differently to reduce their carbon footprint and the impact of climate change, we welcome this u-turn by the government.
“Essentially, asking homeowners and landlords to dig deeper into their pockets at this difficult time is unwanted pressure. Landlords in particular have been continually hit with higher taxation and legislation, coupled with inflationary pressure and higher interest rates, leading many to conclude that it is time to sell. This supply restriction has seen rents go up at a greater rate than in living memory. Therefore reducing capital outlay by reversing out of policies like this is in everyone’s interest in the short-to-medium turn.”