Tory backlash as Sunak suggests he will water down net zero pledges

Published

2 years ago

September 19, 2023

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Rishi Sunak looks set to weaken key climate pledges in a move that has drawn heavy criticism from Tory MPs and environmental groups.

The prime minister said he remains committed to the net zero target by 2050 but will achieve it “in a better, more proportionate way”.

It comes after a BBC report said as part of a major policy shift, the PM could weaken the plan to phase out gas boilers from 2035 and delay the ban on the sale of new petrol and diesel cars – currently due in 2030 – by five years.

It sparked anger among Tory MPs, with one telling Sky News they are “seriously considering” a no confidence letter.

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However, in a statement on Tuesday night, Mr Sunak said: “No leak will stop me beginning the process of telling the country how and why we need to change.

“As a first step, I’ll be giving a speech this week to set out an important long-term decision we need to make so our country becomes the place I know we all want it to be for our children.”

Giving a flavour of what is to come, the prime minister added: “I know people are frustrated with politics and want real change.

“Our political system rewards short-term decision-making that is holding our country back.

“For too many years politicians in governments of all stripes have not been honest about costs and trade offs. Instead they have taken the easy way out, saying we can have it all.”

He nsisted that realism “doesn’t mean losing our ambition or abandoning our commitments – far from it”.

He said: “I am proud that Britain is leading the world on climate change. We are committed to net zero by 2050 and the agreements we have made internationally – but doing so in a better, more proportionate way.

“Our politics must again put the long-term interests of our country before the short-term political needs of the moment.”

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Mr Sunak has previously hinted he is prepared to water down climate policies that add extra costs and “hassle” to households.

It came after the Tories’ unexpected victory at the Uxbridge by-election, which was credited to their opposition to the ULEZ congestion zone charge scheme.

Since then some Tory MPs have argued the party should drop green policies that could impose costs on consumers to gain votes at the ballot box.

But others are concerned it will damage the UK’s reputation on climate change.

Tory MPs are particularly angry about the reported change to the car policy, with one calling it “anti-business” – given how much the car industry has invested in Electric Vehicles (EV).

They told Sky’s deputy political editor Sam Coates that a push back on the petrol and diesel ban would mean breaking a promise the prime minister made to Conservative MPs privately.

Separately, one minister said they would be “staggered” if the car ban is delayed because of the signals it sends to industry, telling Sky News: “Every automotive company is investing in EV, we’ve just given Tata all this money to make batteries, it’s bonkers.”

Some senior Tory figures voiced their concern publicly, with former Cop26 president Sir Alok Sharma warning that “for any party to resile from this (climate action) agenda will not help economically or electorally”.

Tory former Cabinet minister Sir Simon Clarke tweeted that “it is in our environmental, economic, moral and (yes) political interests as @Conservatives to make sure we lead on this issue rather than disown it”.

There was also anger from opposition MPs and climate groups.

Labour’s shadow energy secretary Ed Miliband said: “This is a complete farce from a Tory government that literally does not know what they are doing day to day.

“Thirteen years of failed energy policy has led to an energy bills crisis, weakened our energy security, lost jobs, and failed on the climate crisis.”

Friends of the Earth’s head of policy, Mike Childs, said: “Rolling back on key climate commitments as the world is being battered by extreme flooding and wildfires would be morally indefensible.

“It is legally questionable too as the UK has binding greenhouse gas reduction targets that it’s already in danger of missing.”

Politics

What is a wealth tax, how would it work in the UK and where else has one?

Published

18 mins ago

July 9, 2025

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What is a wealth tax, how would it work in the UK and where else has one?

The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.

Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.

Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”

While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.

Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.

What is a wealth tax?

A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.

It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.

The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.

Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.

A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.

How could it work in the UK?

Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.

Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.

Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.

The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.

Which countries have or have had a wealth tax?

In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.

France and Italy levy wealth taxes on selected assets.

Colombia

Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).

The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.

Norway

There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.

Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).

The maximum combined wealth tax rate is 1.1%.

The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.

Spain

Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.

The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.

It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.

Switzerland

All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.

It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.

Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.

Politics

Jingye and Whitehall officials hold talks over British Steel future

Published

3 hours ago

July 9, 2025

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Jingye and Whitehall officials hold talks over British Steel future

The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.

Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.

Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.

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Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.

Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.

Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.

British Steel has not yet been formally nationalised, although that remains a probable outcome.

Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.

Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.

Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.

News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.

Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.

Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.

“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”