Establishing stability and delivering the legislation needed to deliver net zero should be top of the next PM’s to-do list, writes the REA’s Amy MacConnachie
Boris Johnson’s government retained a commitment to reaching net zero. While I share the frustration of many in our industry that more progress was not made during his time in office, we must also recognise what was achieved. The sensible proposals put forward in the Review of Electricity Market Arrangements (REMA) consultation were welcome. While we wish it to go further, the Contracts for Difference (CfD) policy is undoubtably a success, and the removal of VAT for Energy Saving Materials (ESMs), a long-standing ask of the REA, will prove to be crucial.
Johnson’s overall legacy when it comes to the energy transition will be mixed – the Green Homes Grant, an absence on heat decarbonisation policy, and the concern that a number of emerging technologies are not receiving the requisite support, certainly tarnish Johnson’s record in this regard.
Whatever our views, this chapter is now closing, and we now have to look forwards. Which begs the question, which one of Johnson’s potential successors will prioritise tackling climate change?
Two MPs remain in the race: Rishi Sunak and Liz Truss. Each candidate has confirmed their commitment to net zero by 2050 by signing a pledge written by the Conservative Environment Network vowing to continue the climate policies put in place by Johnson’s government. Yet, despite this commitment, it is important to consider their record in assessing whether they really intend to deliver the strategies needed for energy transition.
Rishi Sunak has stated that he cares deeply for the environment and is committed to net zero, but he has not yet given any concrete policy ideas. His time as Chancellor was checkered, with Sunak not mentioning the climate in the 2021 Budget. Instead, his tenure was marked by the halving of air passenger duty and, as previously mentioned, he did away with the Green Homes Grant, despite calls to reconsider. In terms of his voting record, Sunak has almost always voted against measures to prevent climate change, also voting against calling on the Government to plan to eliminate the majority of transport emissions by 2030. However, Sunak did recently tell the Conservative Environment Network (CEN) ) hustings that he is looking at launching a new energy efficiency scheme focused on smart heating controls and cavity wall insulation, and he delivered the ESM VAT cut this year.
Liz Truss did not include climate commitments in a number of trade deals when she ran the trade department. Her voting record shows generally voting against measures to fight climate change. For example, Truss voted against requiring ministers to have “due regard” of the net zero 2050 target when taking actions such as setting up agricultural subsidy schemes, and voted not to require a “climate and nature emergency impact statement” as part of a proposal for financial assistance. Recent comments on solar has caused some alarm in the industry, noting that it was Truss who cut subsides for solar farms while environment minister in 2014. Truss has indicated that she would attend COP27 and the biodiversity-focused COP15 to showcase British global leadership on climate .
Previous candidates in the running did not offer too many encouraging statements when it came to the climate either, with Penny Mordaunt and Tom Tugendhat both failing to offer much enthusiastic support for the country’s net zero ambitions. Kemi Badenoch went even further, claiming that climate measures could “bankrupt” the economy.
While I will not dwell for too long on this point, the energy transition is not only an environmental imperative, but an economic one. This winter, the UK will face another surge in gas bills, due to the energy price cap likely exceeding £3,200 in October. The REA has repeatedly urged the government to take immediate action, stating that there is a moral and economic imperative for intervention. We need a national effort to ensure as many households as possible can insulate their homes and increase the installation of domestic renewables and clean technology before the winter, but, frankly, we are fast running out of time.
Many of the UK’s leading businesses say too that net zero is crucial for jobs and growth and can kickstart the economy again. It is clear that this is not a ‘cost’ to our country, but an investment in our future.
We remain hopeful that, as the leadership contest develops, the candidates will go much further than simply maintaining the target of net zero by 2050 – we want to see their plans outlining how we get there. The incoming Prime Minister will, of course, continue to shape the UK’s role in reaching net zero, and the most pressing item in their in-tray will be the cost-of-living crisis and how to boost growth and productivity again. These pressing issues are not mutually exclusive – the next leader of the country will have to demonstrate environmental responsibility as well as fiscal capability. They will need to quickly provide stability and deliver the legislation needed to deliver net zero We simply cannot afford to keep stopping and starting.
Together with our members, the REA will continue to work tirelessly, pressing the government – and the Prime Minister – to deliver a net zero future and a commitment to the energy transition.
Now, more than ever, we need decisive action, not warm words.
Amy MacConnachie is director external affairs at the REA