Alan Mak is MP for Havant and served in Rishi Sunak’s Ministerial team at HM Treasury
A month ago, the Prime Minister announced his new approach to New Zero, where he balanced pragmatism and support for households with a continued commitment to the 2050 Net Zero target.
A direct line can be drawn from last month’s announcement to Rishi Sunak’s long-term actions and thinking, which I witnessed first-hand during our time together at the Treasury together when he was Chancellor. Working with him and his team on fiscal events such as the Budget and Spring Statement, for international gatherings such as COP26, and Treasury legislation and statements in the Commons, it was strongly evident that he saw Net Zero and green growth as an enormous economic opportunity for Britain.
That’s why pro-environment policies – and Treasury funding to make them a reality – were a consistent hallmark of his tenure as Chancellor, combined with a pragmatic appreciation that the transition must be managed sensibly and work practically in people’s financial interests rather than against them.
Certain “big picture” themes were mainstays during the weekly Monday morning Ministerial team meetings I attended and which he chaired in the Chancellor’s office. Amongst them was Sunak’s vision for a green industrial revolution and societal transformation powered less by unrealistic targets and more by technology, with the protection of household budgets and living standards a key determinant of his thinking.
This approach during his time as Chancellor was reflected in policy terms too. He used last year’s Spring Statement to remove VAT from energy-saving products and installations so homeowners having solar panels, heat pumps, and insulation installed would no longer pay 5 per cent VAT. This pro-consumer reform also reflected Sunak’s commitment to taking advantage of and using Britain’s Brexit freedoms – another key theme I remember he consistently championed.
His pitch last month was therefore a seamless continuation of the approach that I saw motivating him at Number 11. If public consent for Net Zero collapses, then public support will be hard to sustain for the reductions in emissions and the practical changes to our lifestyles that are needed in the coming decades.
That’s why he moved the ban on the sale of new petrol and diesel vehicles to 2035, giving people more time to adjust and putting the UK on the same timeline as France, Germany, Australia, Canada, and American states such as California and New York. YouGov’s snap poll following the Prime Minister’s speech shows that 50 per cent of voters back the change, against 34 per cent who oppose it.
It’s thus wrong to characterise September’s reforms as rowing back or watering down environmental policy in response to the Conservatives’ recent Uxbridge by-election victory. Equally, suggestions that Sunak wasn’t interested in green issues or backing Net Zero when he was Chancellor are also wide of the mark based on my experience of working with him, hearing his thinking ahead of fiscal events (usually sustained by deliveries from Pizza Pilgrims and cans of Sprite), and his actual record.
Within a month of taking office, Sunak championed green issues in his first Budget, promising to “deliver green growth and protect our environment” from the outset with a focus on innovation and job creation. His first Budget measures included £500 million to support the rollout of new rapid charging hubs; more than doubling R&D investment in the energy innovation programme to £1 billion; investing £300m in tackling nitrogen dioxide emissions in towns and cities across England; and investing £800m to establish new Carbon Capture and Storage clusters.
Sunak also funded new port infrastructure in Teesside and Humberside to support Britain’s offshore wind industry, recognising it as a sector “where the United Kingdom already has a global competitive advantage”. Today, the world’s four largest offshore wind farms by output capacity are in British waters. We’re now getting around a quarter of our energy from offshore wind – up from under 1 per cent in 2010 – thanks partially to investment from Sunak’s time as Chancellor.
Sunak’s first year as Chancellor is now largely remembered for his response to Covid. However, a strong focus on green growth and a pragmatic but committed approach to the environment was also consistent throughout. That first Budget was followed a few months later by his Plan For Jobs, a “comprehensive and ambitious plan to help people back into work…as the UK emerges from the pandemic”. The Plan had a special focus on the transition to Net Zero with £1 billion to make public sector buildings more energy efficient and a new £50 million pilot fund to decarbonise social housing.
Throughout his time as Chancellor, Sunak heavily promoted and strengthened the UK’s financial services sector, and understood from the outset that “greening” our finance system was key to its future success whilst delivering practical environmental benefits. Launching the Financial Services Act 2021, his first signature piece of legislation, he pledged in Parliament to make “the UK a world leader in Green Finance”.
This included launching the UK’s inaugural Sovereign Green Bond (or “Green Gilt”) – a form of Government borrowing to finance green projects with clearly defined environmental benefits. When launched the Green Gilt was the largest sovereign green bond ever listed on the London Stock Exchange and enjoyed record-breaking demand from investors.
Subsequently, the programme has raised £22 billion of finance for green transition and green projects. The public were also incentivised to invest in green projects, with the launch by Sunak of National Savings & Investments (NS&I) green saving bonds.
The Prime Minister concluded his speech last month by saying that in a democracy, the only “realistic path to Net Zero” is based on “consent, not imposition.” He also reminded us not to forget that Britain is already a global leader in driving down emissions and we should be proud of our record.
We were the first country in the world to legislate for carbon reduction, and since 1990 the UK has cut its emissions by almost 50 per cent while still growing our economy by 65 per cent. In contrast, France has only managed a 22 per cent reduction, the United States none at all, and China’s emissions have risen by 300%.
Under the Conservatives, the UK should continue on this trajectory. But Sunak is right that it must be achieved in a pragmatic, proportionate, and realistic way, without losing sight of the need to protect households from bills pushed up by global events. This is the only way to ensure we can protect the huge progress that we have made – and it’s the approach the Prime Minister has long believed in and followed.