Sir Keir Starmer has been accused of failing to guarantee the recently announced uplift in defence spending will not be spent on the contentious Chagos Islands deal.

After initially refusing to set out a timeline to increase defence spending to 2.5% of GDP, the prime minister confirmed on Tuesday the threshold would be met by 2027, with an ambition to reach 3% in the next parliament.

The move has been funded by a cut in the foreign aid budget from 0.5% of GDP to 0.3%, which the government says will release £13.4bn annually for defence – although experts say the figure is closer to half that, at £6bn.

Despite the move being welcomed by the main opposition parties, there have been questions as to whether the uptick in spending could be used to fund the Chagos deal, which would transfer the Indian Ocean archipelago to Mauritius after a decades-long dispute.

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The agreement includes the tropical atoll of Diego Garcia, home to a UK-US military base that plays a crucial role in the region’s stability and international security.

Under the proposed agreement, the UK would lease back Diego Garcia for 99 years at a reported annual cost of around £90m.

Although the Biden administration welcomed the deal as a “win for diplomacy”, Donald Trump’s White House has expressed reservations about the deal owing to its concerns over China’s influence in Mauritius.

During Prime Minister’s Questions, Tory leader Kemi Badenoch asked whether the increase in defence spending would be used to fund the Chagos deal.

“This morning the defence secretary could not say if the Chagos deal would come out of the defence budget,” she said.

“Can he confirm to the House that none of the defence uplift includes payments for his Chagos deal?”

The prime minister replied: “The additional spend I announced yesterday is for our capability on defence and security in Europe, as I made absolutely clear yesterday.

“The Chagos deal is extremely important for our security, for US security. The US are rightly looking at it. When it’s finalised I’ll put it before the House with the costings.”

He said “the figures being bandied around” were “absolutely wide of the mark”, adding: “The deal is well over a century but the funding I announced yesterday is for our capability to put ourselves in a position to rise to a generational challenge, that is what that money is all about and I thought she supported it.”

Later, Downing Street did not rule out that money from increased defence spending could be used as part of the Chagos deal.

Asked about Sir Keir’s response to questions about whether any of the new money will be spent on the deal, the prime minister’s official spokesman said: “The uplift announced yesterday will be going on our military capabilities, technology, adopting cutting-edge capabilities that are vital to retain a decisive edge as threats rapidly evolve”.

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He later added: “We’ll obviously present the details of the Chagos deal as and when it’s finalised.”

Experts have questioned the £13.4bn figure used by the government, arguing that a 0.2% increase amounted to an extra £6bn in cash terms.

Ben Zaranko, associate director at the Institute for Fiscal Studies, said the prime minister “followed in the steps of the last government by announcing a misleadingly large figure for the ‘extra’ defence spending this announcement entails”.

“An extra 0.2% of GDP is around £6bn, and this is the size of the cut to the aid budget. Yet he trumpeted a £13bn increase in defence spending.

“It’s hard to be certain without more detail from the Treasury, but this figure only seems to make sense if one thinks the defence budget would otherwise have been frozen in cash terms.”

Something has changed dramatically in your home in a way you won’t have even noticed.

The electricity in your plug socket no longer comes from coal, the workhorse of the industrial revolution that powered our economy for decades but which is also the most polluting fossil fuel.

Now it is generated by cleaner gas, renewable and nuclear power.

That shift has helped the UK cut greenhouse gas emissions by 50% since 1990 – a world-leading feat – and you won’t have batted an eyelid.

That’s about to change.

The country’s climate advisers, the Climate Change Committee (CCC), say in new advice today that emissions of greenhouse gases need to fall 87% by 2040.

One third of those emissions cuts will come from decisions made by households.

While the first stage of the country’s national climate action has “gone largely unnoticed”, the next phase will be “a lot more difficult”, said Adam Berman from Energy UK, which represents energy suppliers.

“It’s going to be technically more difficult, it is going to be much more visceral and tangible to people in their everyday lives. It affects how they get to work, what they use to heat their homes and even diet.”

Experts say if we get it right, it will make our lives better with cleaner air and better public transport.

It would also shave hundreds of pounds off annual household bills.

But it depends on what the government does next to help people.

The way we travel

The two “most impactful” things households can do are replacing their car with an electric one and a gas boiler with a heat pump (only when they pack up, and not before), the advice said.

By 2040, the share of electric cars on the road needs to jump from 2.8% in 2023 to 80% in order to meet net zero, according to the recommendations, which the government is not obliged to accept.

They are already cheaper to run than petrol or diesel cars, while the falling cost of batteries means EVs should finally cost the same upfront in the next three years.

The committee’s chief executive Emma Pinchbeck said: “Frankly, by the time a lot of people are going to be choosing a new car, the electric vehicle is just going to be the cheapest [option].”

How we heat our homes

But while the switch to electric vehicles is powering ahead, the move to greener home heating has barely left the starting blocks.

Homes are currently the second highest-emitting sector in the UK economy, and much of that comes from the way we heat them.

The CCC today put to bed calls to keep gas boilers but run them on hydrogen, recommending there be “no role for hydrogen heating in residential buildings”.

Hydrogen is hard to produce in a green way, and so would be reserved for other sectors that have no other viable alternatives.

The government is yet to confirm this decision, which would dismay the gas networks and boiler manufacturers.

Instead, the advisers said people should eventually replace boilers with heat pumps, which run on electricity and work a bit like a fridge in reverse: grabbing and compressing warmth from the outside air and using it to heat your home.

Amid a political row over the costs of net zero, the analysis concluded these two switches could save households around £700 a year on heating bills and a further £700 on motoring costs.

Cutting down on meat and on excessive flying will also play an important, but smaller role they said.

The upfront investment will cost the equivalent of 0.2% of GDP, most of which would come from the private sector.

Overcoming the costs

But at the moment the benefits of these green switches are not spread fairly, and some people can’t access them at all.

The upfront costs of a heat pump – and home upgrades needed alongside – are “sizeable” and price out poorer households, even with current government subsidies, campaigners and the CCC said.

Zachary Leather, an economist at the Resolution Foundation thinktank, said: “While politicians fret and argue about the cost of net zero, today’s report shows that there are long-term benefits for consumers and the environment.”

But the government needs to “get serious” about helping lower-income households to adopt heat pumps and EVs so they can save money too, he said.

Meanwhile, it is still cheaper for someone with a driveway to charge their EV than someone who charges theirs on the street – and electricity prices overall should be made cheaper to help people reap the benefits.

Mr Berman from Energy UK said: “All through the energy system there are these small examples that tend to mean working class households find it more expensive to take up low carbon alternatives.”

The energy transition is ‘not fair yet’

It also comes at a time of wavering support for climate action. While Labour was elected on a mandate to go faster on climate action, the Conservatives have retreated from green issues, and Reform UK wants to dismantle net zero altogether.

Mr Berman said a way to “resolve that question of public consent is to ensure we’re rolling out that infrastructure in a really, really fair and inclusive way. And we’re not there yet”.

The public are also confused about if, when and how to switch to these green technologies, and which government should tackle this with clearer guidance, the CCC said.

Energy Secretary Ed Miliband said: “This advice is independent of government policy, and we will now consider it and respond in due course.

“It is clear that the best route to making Britain energy secure, bringing down bills and creating jobs is by embracing the clean energy transition. This government’s clean energy superpower mission is about doing so in a way that grows our economy and makes working people better off.

“We owe it to current generations to seize the opportunities for energy security and lower bills, and we owe it to future generations to tackle the existential climate crisis.”