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The home secretary has said that “we’re not going to save the planet by bankrupting the British people” in response to reports the government is looking at watering down some of its key green pledges

Among the changes being considering are the pushing back of a ban on the sales of new vehicles with internal combustion engines (ICE) from 2030 to 2035 – and a weakening of plans to phase out gas boilers by 2035.

Suella Braverman told Sky News that, while the government remains committed to the goal of achieving net zero greenhouse gas emissions by 2050, “we need to put economic growth first”.

Politics latest: Tory row as Sunak set to delay net zero policies

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“We need to put household costs and budgets first. We need to put the cost of living first,” she added.

“And we’re only going to achieve that net zero target whereby people and the British people can go about their daily lives using their cars, using the facilities that are available.”

The chair of Ford UK says a delay to the 2030 deadline for selling ICE vehicles would undermine the “ambition, commitment and consistency” they need from the UK government.

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The 2030 ban on ICE vehicles is considered a key plank of the government’s goal of achieving net zero because experts say it will encourage people to switch to zero-emission electric vehicles sooner.

Climate scientists say that urgent cuts are needed to the world’s greenhouse gas emissions if we are to stop temperatures rising to a potentially catastrophic extent.

Prime Minister Rishi Sunak is set to lay out further details of his plans in a speech in the coming days. The reported change in stance has led at least one Tory MP to “seriously” consider putting in a letter of no confidence in Mr Sunak’s leadership.

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In a statement, 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.”

Conservative MPs are particularly angry at the potential delay to the ending of the sale of internal combustion engines to 2035.

One branded the move “anti-business” given how much has been invested into electric vehicles (EV) and the associated infrastructure.

Could watering down net zero pledges trigger Tory civil war?



Mhari Aurora

Politics and business correspondent

@MhariAurora

An unusual late-night statement from the prime minister triggered by leaks to the media regarding the government’s plans to water down its net zero pledges: Rishi Sunak is continuing to draw the battlelines for the next general election.

Green policy is a contentious topic for both main parties – Keir Starmer, like Sunak, has been heavily criticised for abandoning his green pledges.

But as politicians struggle to balance the cost of going green with boosting the UK’s recovering economy, how much political pain could this really inflict on the prime minister?

Despite a vocal group of critics, behind the scenes many Tory MPs are keen on the climbdown.

One Tory backbencher told Sky News that being “pragmatic and outcome-focused beats virtue signalling every time”.

And Marco Longhi, a Tory MP with a red wall constituency, told me the PM’s decision was extremely welcome.

He said: “While fully behind efforts to deliver a greener planet I am not going to support policies that are only affordable by the richest.”

And at a time when the Conservative party is 19 points behind in the polls – with Labour on 44 points and the Tories lagging on 26 points – Rishi Sunak is keen to make some bold policy decisions in an attempt to close that gap.

However, it remains to be seen whether this is the smartest policy area in which to do that.

According to a YouGov poll from August, 33% of those surveyed said they believe the government should be spending more on the environment and climate change, and 49% believe Sunak’s government isn’t doing enough to reduce carbon emissions.

So, with tentative public support for a green economy, Sunak’s predicted climbdown is an electoral gamble he will be hoping pays off at the ballot box.

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.

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

He was referring to plans by the owner of Jaguar Land Rover to build an electric car battery factory in the UK.

Tory MPs Chris Skidmore, Alok Sharma and Sir Simon Clarke all complained publicly about the potential watering down of the pledges.

Lisa Brankin, the chair of Ford UK, highlighted that her company had invested £430m in UK development and manufacturing facilities, with more cash to come to fit the 2030 timeframe.

Ms Brankin said: “This is the biggest industry transformation in over a century and the UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future.

“Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.

“We need the policy focus trained on bolstering the EV market in the short term and supporting consumers while headwinds are strong: infrastructure remains immature, tariffs loom and cost-of-living is high.”

A spokesperson for Jaguar Land Rover said: “We are committed to and on track to offer pure electric variants across our brands by 2030 and welcome certainty around legislation for the end of sale of petrol and diesel powered cars.

“We are investing £15bn over the next five years to electrify our luxury brands, which is key to JLR reaching net zero carbon emissions across our supply chain, products, and operations by 2039.”

Stellantis, the owner of Vauxhall, Fiat, Alfa Romeo and DS said: “Clarity is required from Governments on important legislation, especially environmental issues that impact society as a whole.”

BMW MINI, which announced plans to construct its electric Mini in Oxford, said it “neither sought or was made any promises” about the timings of an ICE ban when the decision was made.

Asked about the EV industry, Ms Braverman said: “I’m not going to prejudge what the prime minister is going to set out in detail.

Read more:
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“But I would say I do commend him for taking difficult decisions, long-term decisions in the national interest and in the interest of the British people.”

Asked about the concerns raised by her Conservative MPs, Ms Braverman said “everyone should just wait until they hear the detail from the prime minister himself”.

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Darren Jones, Labour’s shadow chief secretary to the Treasury, said we will need to wait for the reaction of the car companies to the anticipated policy change.

He told Sky News that “part of the problem” is Mr Sunak’s “weak leadership”, and the way in which the changes first surfaced through a leak and with a “late night press release from the prime minister’s bunker”.

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Lloyds Banking Group in talks to buy digital wallet provider Curve

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Lloyds Banking Group in talks to buy digital wallet provider Curve

Britain’s biggest high street bank is in talks to buy Curve, the digital wallet provider, amid growing regulatory pressure on Apple to open its payment services to rivals.

Sky News has learnt that Lloyds Banking Group is in advanced discussions to acquire Curve for a price believed to be up to £120m.

City sources said this weekend that if the negotiations were successfully concluded, a deal could be announced by the end of September.

Curve was founded by Shachar Bialick, a former Israeli special forces soldier, in 2016.

Three years later, he told an interviewer: “In 10 years time we are going to be IPOed [listed on the public equity markets]… and hopefully worth around $50bn to $60bn.”

One insider said this weekend that Curve was being advised by KBW, part of the investment bank Stifel, on the discussions with Lloyds.

If a mooted price range of £100m-£120m turns out to be accurate, that would represent a lower valuation than the £133m Curve raised in its Series C funding round, which concluded in 2023.

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That round included backing from Britannia, IDC Ventures, Cercano Management – the venture arm of Microsoft co-founder Paul Allen’s estate – and Outward VC.

It was also reported to have raised more than £40m last year, while reducing employee numbers and suspending its US expansion.

In total, the company has raised more than £200m in equity since it was founded.

Curve has been positioned as a rival to Apple Pay in recent years, having initially launched as an app enabling consumers to combine their debit and credit cards in a single wallet.

One source close to the prospective deal said that Lloyds had identified Curve as a strategically attractive bid target as it pushes deeper into payments infrastructure under chief executive Charlie Nunn.

Lloyds is also said to believe that Curve would be a financially rational asset to own because of the fees Apple charges consumers to use its Apple Pay service.

In March, the Financial Conduct Authority and Payment Systems Regulator began working with the Competition and Markets Authority to examine the implications of the growth of digital wallets owned by Apple and Google.

Lloyds owns stakes in a number of fintechs, including the banking-as-a-service platform ThoughtMachine, but has set expanding its tech capabilities as a key strategic objective.

The group employs more than 70,000 people and operates more than 750 branches across Britain.

Curve is chaired by Lord Fink, the former Man Group chief executive who has become a prolific investor in British technology start-ups.

When he was appointed to the role in January, he said: “Working alongside Curve as an investor, I have had a ringside seat to the company’s unassailable and well-earned rise.

“Beginning as a card which combines all your cards into one, to the all-encompassing digital wallet it has evolved into, Curve offers a transformative financial management experience to its users.

“I am proud to have been part of the journey so far, and welcome the chance to support the company through its next, very significant period of growth.”

IDC Ventures, one of the investors in Curve’s Series C funding round, said at the time of its last major fundraising: “Thanks to their unique technology…they have the capability to intercept the transaction and supercharge the customer experience, with its Double Dip Rewards, [and] eliminating nasty hidden fees.

“And they do it seamlessly, without any need for the customer to change the cards they pay with.”

News of the talks between Lloyds and Curve comes days before Rachel Reeves, the chancellor, is expected to outline plans to bolster Britain’s fintech sector by endorsing a concierge service to match start-ups with investors.

Lord Fink declined to comment when contacted by Sky News on Saturday morning, while Curve did not respond to an enquiry sent by email.

Lloyds also declined to comment, while Stifel KBW could not be reached for comment.

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UK economy figures not as bad as they look despite GDP fall, analysts say

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UK economy figures not as bad as they look despite GDP fall, analysts say

The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.

A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).

Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.

It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.

A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.

This was borne out by other figures released by the ONS on Friday.

Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.

More on Inflation

Overall, there was a “large rise in goods imports and a fall in goods exports”.

A ‘disappointing’ but mixed picture

It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.

“I am determined to kickstart economic growth and deliver on that promise”, she added.

But the picture was not all bad.

Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.

It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.

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The expansion in March means the economy still grew when the three months are looked at together.

While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.

Such a cut would bring down the rate to 4% and make borrowing cheaper.

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Is Britain going bankrupt?

Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.

“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.

Why did the economy shrink?

The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.

The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.

It made up for a “very weak” month for retailers, the ONS said.

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UK economy remains fragile – and there are risks and traps lurking around the corner

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UK economy remains fragile - and there are risks and traps lurking around the corner

Monthly Gross Domestic Product (GDP) figures are volatile and, on their own, don’t tell us much.

However, the picture emerging a year since the election of the Labour government is not hugely comforting.

This is a government that promised to turbocharge economic growth, the key to improving livelihoods and the public finances. Instead, the economy is mainly flatlining.

Output shrank in May by 0.1%. That followed a 0.3% drop in April.

Ministers were celebrating a few months ago as data showed the economy grew by 0.7% in the first quarter.

Hangover from artificial growth

However, the subsequent data has shown us that much of that growth was artificial, with businesses racing to get orders out of the door to beat the possible introduction of tariffs. Property transactions were also brought forward to beat stamp duty changes.

More from Money

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In April, we experienced the hangover as orders and industrial output dropped. Services also struggled as demand for legal and conveyancing services dropped after the stamp duty changes.

Many of those distortions have now been smoothed out, but the manufacturing sector still struggled in May.

Signs of recovery

Manufacturing output fell by 1% in May, but more up-to-date data suggests the sector is recovering.

“We expect both cars and pharma output to improve as the UK-US trade deal comes into force and the volatility unwinds,” economists at Pantheon Macroeconomics said.

Meanwhile, the services sector eked out growth of 0.1%.

A 2.7% month-to-month fall in retail sales suppressed growth in the sector, but that should improve with hot weather likely to boost demand at restaurants and pubs.

Struggles ahead

It is unlikely, however, to massively shift the dial for the economy, the kind of shift the Labour government has promised and needs in order to give it some breathing room against its fiscal rules.

The economy remains fragile, and there are risks and traps lurking around the corner.

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Is Britain going bankrupt?

Concerns that the chancellor, Rachel Reeves, is considering tax hikes could weigh on consumer confidence, at a time when businesses are already scaling back hiring because of national insurance tax hikes.

Inflation is also expected to climb in the second half of the year, further weighing on consumers and businesses.

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