People won’t have to pay more to go green, says Kwarteng

The secretary of affairs denied that individuals will bear the cost of switching to greener ways of life.

Kwasi Kwarteng said that “it is not true” to say that switching to more environmentally friendly transport and energy production “would cost us”.

The government plans to reduce greenhouse gas emissions to reach the net zero target by 2050.

The Treasury has suggested that tax increases may be needed as revenues from fossil fuel-related businesses run out.

Hitting net zero means the UK will no longer add to the total amount of greenhouse gases in the atmosphere. Without action on climate change, the world faces a warmer planet, rising sea levels and extreme weather conditions.

The Treasury said achieving the target would put pressure on public spending, but added that “the biggest impact” came from “the erosion of tax revenues from fossil fuel related businesses.”

Last year £ 37 billion was raised through fuel tax and vehicle excise duty, but it is believed that the switch to electric vehicles could create a temporary fiscal vacuum by 2040, meaning new ones would be needed. revenue increase measures.

A net zero report from the Treasury said future governments “may have to consider changes to existing taxes and new sources of revenue” rather than relying on higher loans.

He also warned policies supporting the adoption of electric vehicles “could disproportionately benefit” the richest people, with those with lower incomes likely to bear the brunt of rising costs.

“As higher income families drive more and are likely to adopt electric vehicles [electric vehicles] first, the costs and benefits of adopting electric vehicles are likely to fall on higher-income households first, “the Treasury report said.

“Conversely, any changes to the cost of running an internal combustion engine vehicle will fall disproportionately on low-income families, so there may be a trade-off in some cases.”

Asked on the BBC’s Today program whether there was a danger that the poorest people could lead to “mitigating the green guilt of the rich”, Kwarteng replied, “No, I don’t accept that at all.”

He added that the switch to electric vehicles was “successful and we should do it faster,” but admitted there was still “range anxiety” about how far such vehicles could travel.

Kwarteng said up to £ 90bn of private investment by 2030 would help the country get more energy from renewable sources, with “evidence” of such predictions based on previous £ 100bn investment in offshore wind farms. from 2012.

“It is not a heroic hypothesis to say that by 2030 we would have attracted another 90 billion pounds,” he said.

In addition to plans to encourage more people to drive electric cars, the government will also offer subsidies of £ 5,000 from next April to allow people to switch from gas-fired boilers to low-carbon heat pumps.

Heat pumps extract heat from the air, ground or water – a bit like a refrigerator running in reverse – and are powered by electricity. An air source heat pump costs between £ 6,000 and £ 18,000, depending on the type installed and the size of the property.

Although up to 25 million homes in the UK have gas boilers, government grants will only fund 90,000 pumps over three years. Critics said the plans don’t go far enough.

Mr. Kwarteng added that the cost of heat pumps could “drop” as more companies start manufacturing them, which would see more people “adopt” them.

“People will have seen this in their own lives. A few years ago with things like iPhones, they were very, very expensive at first. Of course, the unit cost, as the private sector invests in producing these things, goes down,” he said. said.

The recently released iPhone 13 phone is currently priced at £ 779 on Apple’s website.

Mr. Kwarteng admitted that it was “a lot of money” to install a heat pump, adding, “Nobody is saying that we are imposing heat pumps on anyone.

“What we’re trying to do is encourage behavior.”

The government’s zero plans come as global leaders prepare to meet in Glasgow to negotiate how to curb climate change.