Boris Johnson’s green agenda has been plunged into chaos amid fears that the costs of reaching “Net Zero” could cripple working class families in newly-won Tory seats.
A Treasury review of the costs of reducing net greenhouse gas emissions to zero by 2050 has been delayed since the spring. There are concerns the analysis highlights that the poorest households will be hit the hardest by the ambition, which will involve policies such as stripping out gas boilers and switching to electric or hydrogen cars.
Rishi Sunak, the Chancellor, is said to be increasingly concerned about a looming crisis over the cost of living for British households, as the country faces the triple threat of rocketing energy bills, the potential for rising prices as a result of inflation, and an as-yet unspecified suite of policies to enable the country to meet the net zero target.
The Treasury review has been held back amid fears that the analysis will lead MPs and the public to the conclusion that Mr Johnson’s net zero strategy would be politically toxic in the Red Wall seats won by the Conservatives in December 2019.
The disclosure comes amid claims of rising tensions between Mr Johnson and the Chancellor, with longstanding friction between Number 10 and Number 11 over the Prime Minister’s spending demands.
On Saturday night it was reported that Mr Johnson had expressed fury over the leak of a letter in which Mr Sunak lobbied for a relaxation of travel restrictions. In a barbed joke, Mr Johnson threatened to demote Mr Sunak to Health Secretary.
The Government had said in December that the review would be published in “spring 2021”. However, it is among several key documents to have been significantly delayed amid wrangling in Whitehall over how to achieve the target without disproportionately “clobbering” the finances of working class families, and plunging the country into hundreds of billions of pounds of further debt.
The issue is likely to be at the centre of Mr Sunak’s autumn spending review, which is expected to decide the overall pots of money available for subsidising green technologies such as hydrogen.
Meanwhile, one adviser of COP26, the climate conference due to be hosted by Mr Johnson in November, said: “I don’t think ministers knew what they were getting in to” when they set targets for the conference, such as securing commitments from attendees that will limit the rise in global temperatures to no more than 1.5C.
One official said: “There was a massive expectation on us as members of the G7 and home of the industrial revolution. Boris was trying to grab as much as he can and to be a mighty great host… But Covid has added massive complications.”
Amid growing disquiet among Tory MPs, a new net zero scrutiny group of backbenchers is being formed to hold ministers to account over the plans. Craig Mackinlay, its chairman, warned that spending vast sums on subsidising green schemes would be seen by the public as “aping” some of Jeremy Corbyn’s pledges at the 2019 election.
He said: “The Conservatives’ strongest hand has always been credibility: credibility to deliver good economics and good governance. To ape the failed policies of an extreme Labour politician does not seem to be the way of electoral success.”
He added: “I’m very pleased the Treasury are actually thinking of this with a financial head on rather than just a warm feeling.” […]
Insiders said that the “tension” behind the scenes was over the extent to which the Treasury should spend eye-watering sums subsidising green technologies, such as hydrogen and heat pumps – including the question of how many years it would take until taxpayer or consumer subsidies were no longer required.
Last month, Mr Johnson admitted that heat pumps, seen as an alternative to gas boilers, “cost about 10 grand a pop”. He added: “This is a lot of money for ordinary people. We’ve got to make sure that when we embark on this programme, that we have a solution that is affordable and that works for people. We won’t be imposing it until we have been able to create that market.”
There is alarm among some insiders about the amount of progress needed to achieve the net zero target by 2050. On the other hand, Mr Mackinlay’s group believe that, “while something sensible can emerge”, the current approach is “too rapid, too uncosted and too unscientific”.