Rishi Sunak confirms he’s delaying ban on new petrol and diesel cars and boosts boiler upgrade scheme
Rishi Sunak has confirmed he will be easing a series of green policies under a “new approach” designed to protect “hard-pressed British families” from “unacceptable costs”.
Delivering a speech from Downing Street, he said he is still committed to reaching net zero by 2050, but the transition can be done in a “fairer and better way”.
Announcing a raft of U-turns, the prime minister confirmed he will delay a ban on the sale of new diesel and petrol cars by five years and a weakening of targets to phase out gas boilers.
He also said a “worrying set of proposals” that had emerged during debates on net zero would be scrapped, including:
- For government to interfere in how many passengers you can have in your car
- To force you to have seven different bins in your home
- To make you change your diet and harm British farmers by taxing meat
- To create new taxes to discourage flying or going on holiday
“Our destiny can be of our own choosing,” Mr Sunak said – while calling for politicians to be “honest” about the costs of green policies on families.
Politics live: Rishi Sunak gives speech from Downing Street
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‘No rights to impose costs on people’
The measures have faced criticism from across the political spectrum as well as from businesses, environmental groups and even former US vice president Al Gore.
Labour accused the prime minister of “dancing to the tune” of net zero-sceptic Tories and said the plans would actually add more costs to households while damaging investor confidence.
Explaining the government’s decision to delay the ban on the sale of new petrol and diesel cars – currently due in 2030 – by five years, Mr Sunak said this would give businesses “more time to prepare”.
He also said people would still be allowed to buy secondhand diesel and petrol cars after that date and this would align the UK’s approach with countries across Europe, Canada and many US states.
In weakening the plan to phase out gas boilers from 2035, Mr Sunak said households would “never” be forced to “rip-out their existing boiler and replace it with a heat pump”.
This will only be required when people are due to change their boiler anyway and there will be an exception for households for whom that will be the hardest.
Mr Sunak also announced an increase to the boiler upgrade scheme, saying rather than banning boilers “before people can afford the alternative” the government is going to “support them to make the switch” to heat pumps.
He said: “The boiler upgrade scheme which gives people cash grants to upgrade their boiler will be increased by 50% to seven and a half thousand pounds.
“There are no strings attached. The money will never need to be repaid.”
Landlord efficiency targets scrapped
Mr Sunak has also scrapped plans to force landlords to upgrade the energy efficiency of their properties, saying some property owners would have been forced to “make expensive upgrades” within two years and that would inevitably impact renters.
“You could be looking at a bill of £8,000, and even if you’re only renting, you’re more than likely to see some of that passed on in higher rents,” he said.
“That’s just wrong, so those plans will be scrapped.”
Despite the “new approach”, the prime minister insisted the UK would meet its international obligations on climate change – such as those made under the Paris Climate Accords.
He went on to defend the UK’s record, arguing the country is “so far ahead” of other countries in the world when it comes to cutting greenhouse gas emissions.
PM wants to portray himself as a leader prepared to take unpopular decisions his predecessors weren’t
For all the rhetoric about democracy and real political change – today’s speech was fundamentally about the Prime Minister giving into the concerns of many in his party about the costs of the green policies set out by Boris Johnson’s government.
Labour see these announcements as projecting fundamental political weakness: 20 points behind in the polls and struggling to meet the majority of his five pledges, Rishi Sunak urgently needs to find a way to connect with voters struggling during the cost of living crisis. He’s keen to win over the right wing Tory backbenchers concerned about the electoral danger of expensive environmental policies like the ULEZ expansion which was widely seen to have cost Labour the Uxbridge by election.
It’s an impression underlined by the hurried way the announcement was made – less than 24 hours after these controversial change in tack was leaked to the media, prompting a huge backlash from business and many in his own party. Making such a key speech in the Downing Street media briefing room – rather than to Parliament, also looks chaotic.
It’s sent the Speaker into a fury, earning a humiliating rebuke. “Ministers are answerable to MPs – we do not have a presidential system here,” Sir Lindsey Hoyle thundered. For a man like Mr Sunak, who prides himself on being a sensible pragmatist – the complete opposite to the cavalier Boris Johnson – it’s surely a criticism that will sting, though it’s hardly unexpected.
The irony is that Rishi Sunak opened his speech by pledging to put the long term interests of the country before the short term political needs of the moment. Climate campaigners, for whom nothing could be more urgent, will surely scoff at this.
But in the framing of his speech – as the first of a series of long term policy decisions in a ‘new kind of politics’ – the Prime Minister and his team are keen to burnish his reputation as a pragmatic reformer, prepared to take the kind of unpopular decisions his predecessors weren’t. Certainly many in his party have been calling for a change in approach, a new bolder strategy to set out a greater distance with Labour – and it seems he has been listening.
The PM’s key arguments – that government shouldn’t impose unnecessary or heavy handed costs on hard working people, and relying on the market to drive change – are a return to classic Conservatism.
But his core argument that the need for action is less urgent than we have previously been led to believe, because of the UK’s success in meeting existing climate targets – is not one which will sit easily with green minded MPs.
And while he spent a key part of the speech concentrating on the importance of green technological innovation, and celebrating the power of the market in delivering progress – that will surely stick in the throat of companies who’ve spent billions getting ready to meet targets which have now been delayed. Many in his own party are concerned about the reputational damage to the UK as a centre of business investment.
He’s well aware that today’s message will be deeply unpopular with some – but promised to ‘meet any resistance’. Many Tory MPs will welcome that more bullish approach; but his promise to deliver ‘pragmatism and not ideology’ is pure Sunak.
The question now is in the hands of voters – do they buy into this argument that the country can reach Net Zero by 2050 without many of the policies designed to get there? Or in the midst of the cost of living crisis – will they be delighted to avoid the cost of paying for them?
‘Act of weakness’
Among the critics, Ed Miliband, Labour’s Shadow Energy Security and Net Zero Secretary, said: “Today is an act of weakness from a desperate, directionless prime minister, dancing to the tune of a small minority of his party. Liz Truss crashed the economy and Rishi Sunak is trashing our economic future.
“Having delivered the worst cost of living crisis in generations, the prime minister today loads more costs onto the British people.”
Lib Dem leader Ed Davey said: “This is a prime minister who simply doesn’t understand and cannot grasp for Britain the opportunities for jobs and our economy of driving forward with action on clean energy.”
There was also criticism from the car industry and energy industry.
Chis Norbury, the chief executive of the E.ON energy firm, said it was a “false argument” that green policies can only come at a cost, arguing they deliver affordable energy while boosting jobs.
He said companies wanting to invest in the UK need “long-term certainty” while communities now risk being condemned to “many more years of living in cold and draughty homes that are expensive to heat”.
Ford cars UK chairwoman Lisa Brankin said: “Our business needs three things from the UK Government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.”
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Rishi Sunak is asked if his net zero policy climbdowns are a result of him panicking about the next election.
Tory MPs split
The announcement comes after last night’s leak of the plans sparked a major Tory backlash and even a threat of a no confidence letter.
Mr Sunak was due to give the speech later this week but brought it forward following a hastily arranged cabinet meeting this morning.
Commons Speaker Sir Lindsay Hoyle reacted furiously to the announcement not being made to MPs, who are on recess for conferences, expressing his views “in the strongest terms” in a letter to Mr Sunak.
Tory MPs are split, with some seeing the row back on costly green policies as a vote winner and others fearing the impact it will have on business and the climate.
Senior figures who have backed the prime minister include his predecessor Liz Truss, who said: “I welcome the delay on banning the sale of new petrol and diesel cars as well as the delay on the ban on oil and gas boilers. This is particularly important for rural areas.”
Read more:
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Sunak’s messaging suggests net zero is negotiable
What could be scrapped from net zero pledges?
However Boris Johnson, who Ms Truss briefly took over from, said the row back would cause uncertainty for businesses, adding: “We cannot afford to falter now or in any way lose our ambition for this country.”
Mr Johnson’s ally and prominent Tory environmentalist Lord Zac Goldsmith went as far as to demand a general election over the “economically and ecologically illiterate decision”.
The UK’s commitment to reach net zero by 2050 was written into law in 2019.
Climate scientists say urgent cuts are needed to the world’s greenhouse gas emissions if we are to stop temperatures rising to a potentially catastrophic extent.
In the summer, scientists warned extreme heat events were rapidly on the rise due to climate change.
Britain’s wealth gap is growing and it’s now practically impossible for a typical worker to save enough to become rich, according to a report.
Analysis by The Resolution Foundation, a left-leaning think tank, found it would take average earners 52 years to accrue savings that would take them from the middle to the top of wealth distribution.
The total needed would be around £1.3m, and assumes they save almost all of their income.
Wealth gaps are “entrenched”, it said, meaning who your parents are – and what assets they may have – is becoming more important to your living standards than how hard you work.
While the UK’s wealth has “expanded dramatically over recent decades”, it’s been mainly fuelled by periods of low interest rates and increases in asset worth – not wage growth or buying new property.
Citing figures from the Office for National Statistics (ONS) Wealth And Assets Survey, the think tank found household wealth reached £17trn in 2020-22, with £5.5trn (32%) held in property and £8.2trn (48%) in pensions.
The report said: “As a result, Britain’s wealth reached a new peak of nearly 7.5 times GDP by 2020-22, up from around three times GDP in the mid-1980s.
“Yet, despite this remarkable increase in the overall stock of wealth, relative wealth inequality – measured by the share of wealth held by the richest households – has remained broadly stable since the 1980s, with the richest tenth of households consistently owning around half of all wealth.”
According to the think tank, this trend has worsened intergenerational inequality.
It said the wealth gap between people in their early 30s and people in their early 60s has more than doubled between 2006-08 and 2020-22 – from £135,000 to £310,000, in real cash terms.
Regional inequality remains an issue, with median average wealth per adult higher in London and the South East.
Could wealth tax be the answer?
The report comes seven weeks before Rachel Reeves delivers her budget on 26 November, having batted away calls earlier this year for a wealth tax.
Former Labour leader Lord Kinnock is among those to have called for one, in an interview with Sky News.
Read more from Sky News:
What is a wealth tax?
What wealth tax options could Britain have?
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Options for wealth tax
But speaking to Bloomberg last month, Ms Reeves said: “We already have taxes on wealthy people – I don’t think we need a standalone wealth tax.”
Previous government policies targeting Britain’s richest, notably a move to grab billions from non-doms, has led to concerns about an exodus of wealth. The prime minister has denied too many are leaving the capital.
Molly Broome, senior economist at the Resolution Foundation, said any wealth taxes would not just be paid by the country’s richest citizens.
She said: “With property and pensions now representing 80% of the growing bulk of household wealth, we need to be honest that higher wealth taxes are likely to fall on pensioners, southern homeowners or their families, rather than just being paid by the super-rich.”
Business
Millions of people could each get hundreds of pounds in compensation over car loan mis-selling
Up to 14.2 million people could each receive an average of £700 in compensation due to car loan mis-selling, the financial services regulator has said.
Nearly half (44%) of all car loan agreements made between April 2007 and November 2024 could be eligible for payouts, the Financial Conduct Authority (FCA) said.
Those eligible for the compensation will have had a loan where the broker received commission from a lender.
Lenders broke the law by not sharing this fact with consumers, the FCA said, and customers lost out on better deals and sometimes paid more.
A scheme is seen by the FCA as the best outcome for consumers and lenders, as it avoids the courts and the Financial Ombudsman Service, therefore minimising delay, uncertainty and administration costs.
The scheme will be funded by the dozens of lenders involved in the loans, and cost about £8.2bn, on the lower end of expectations, which had been expected to reach as much as £18bn.
The figure was reached by estimating that 85% of eligible applicants will take part in the scheme.
What if you think you’re eligible?
Anyone who believes they have been impacted should contact their lender and has a year to do so. Compensation will begin to be paid in 2026, with an exact timeline yet to be worked out.
The FCA said it would move “as quickly as we can”.
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Payouts due after motor finance scandal
People who have already complained do not need to take action. Complaints about approximately four million loan agreements have already been received.
There’s no need to contact a solicitor or claims management firm, the FCA said, as it aimed for the scheme to be as easy as possible.
A lender won’t have to pay, however, if it can prove the customer could not have got cover anywhere else.
The number of people who will get a payout is not known. While there are 14.2 million agreements identified by the FCA, the same person may have taken out more than one loan over the 17-year period.
More expensive car loans?
Despite the fact many lenders have to contribute to redress, the FCA said the market will continue to function and pointed out the sector has grown in recent years and months.
In delivering compensation quickly, the FCA said it “can ensure that some of the trust and confidence in the market can be repaired”.
It could not, however, rule out that the scheme could mean fewer offers and more expensive car loans, but failure to introduce a scheme would have been worse.
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UK steel set for further hit as EU to double tariffs
Is another spectacular Bitcoin comedown inevitable?
The FCA said: “We cannot rule out some modest impacts on product availability and prices, we estimate the cost of dealing with complaints would be several billion pounds higher in the absence of a redress scheme.
“In that scenario, impacts on access to motor finance and prices for consumers could be significantly higher with uncertainty continuing for many more years.”
Sir Keir Starmer has begun the first full-blown trade mission to India since Theresa May was prime minister, bringing 125 UK CEOs, entrepreneurs and university leaders to Mumbai.
The prime minister flew on a plane with dozens of Britain’s most prominent business people, including bosses from BA, Barclays, Standard Chartered, BT and Rolls-Royce, for the two-day trip designed to boost ties between the two countries.
Starmer will meet Prime Minister Narendra Modi on Thursday, five months after the UK signed the first trade deal with India since Brexit.
The agreement has yet to be implemented, with controversial plans to waive national insurance for workers employed by big Indian businesses sent to the UK still the subject of a forthcoming consultation.
Speaking to journalists on the plane on the way out, the prime minister said he was determined to boost ties between the two countries.
The trip has been arranged to coincide with the Conservative Party conference, with the first day of meetings coinciding with Kemi Badenoch’s speech to activists in Manchester.
Politics latest – Badenoch: ‘Robert Jenrick is not the leader of the Conservative Party’
However, the business delegation is likely to use the trip to lobby the prime minister not to put more taxes on them in the November budget.
Sir Keir has already turned down the wish of some of the CEOs on the trip to increase the number of visas.
“The visa situation hasn’t changed with the free trade agreement, and therefore we didn’t open up more visas,” he said.
He told business that it wasn’t right to focus on visas, telling them: “The issue is not about visas. It’s about business-to-business engagement and investment and jobs and prosperity coming into the United Kingdom.”
Narendra Modi and Keir Starmer during a press conference in July. Pic: PA
The prime minister sidestepped questions about Mr Modi’s support of Russian leader Vladimir Putin, whom he wished happy birthday on social media. US President Donald Trump has increased tariffs against India, alleging that Indian purchases of Russian oil are supporting the war in Ukraine.
Asked about Mr Modi wishing Mr Putin happy birthday, and whether he had leverage to talk to Mr Modi about his relationship with Russia, Sir Keir sidestepped the question.
“Just for the record, I haven’t… sent birthday congratulations to Putin, nor am I going to do so,” he said. “I don’t suppose that comes as a surprise. In relation to energy, and clamping down on Russian energy, our focus as the UK, and we’ve been leading on this, is on the shadow fleet, because we think that’s the most effective way. We’ve been one of the lead countries in relation to the shadow fleet, working with other countries.”
Sir Keir refused to give business leaders any comfort about the budget and tax hikes, despite saying in his conference speech he recognised the last budget had an impact.
“What I acknowledged in my conference and I’ve acknowledged a number of times now, is we asked a lot of business in the last budget. It’s important that I acknowledge that, and I also said that that had helped us with growth and stabilising the economy,” he added. “I’m not going to make any comment about the forthcoming budget, as you would expect; no prime minister or chancellor ever does.”
Asked if too many wealthy people were leaving London, he said: “No. We keep a careful eye on the figures, as you would expect.
“The measures that we took at the last budget are bringing a considerable amount of revenue into the government which is being used to fix things like the NHS. We keep a careful eye on the figures.”
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