By Johanna Bradford

The government are reportedly considering plans to increase the costs of gas and petrol in a bid to accelerate the move to Net Zero. This would make running a petrol car £100 more costly a year.

Critics question why a government publicly committed to ‘levelling up’ would risk increasing levels of fuel poverty and abandon traditional voters.

The rationale is that by increasing uptake of green energy, costs will eventually be driven down as the market becomes more saturated. To date, the government has looked to big business to lead this charge. So why now the change of heart?

A recent report by the UK climate change committee, who report to Parliament on progress made in reducing greenhouse gas emissions, made clear that our strategies “too often missed the mark” and urgent action is needed. Clearly there is a real nervousness that the UK’s Net Zero targets will not be met, and these proposals may be a way to address the apparent policy vacuum.

Richer households typically use more carbon on a day-to-day basis, so are expected to bear the brunt of the proposed policy. They are expected to be able to absorb the increased costs (particular as running costs will be cheaper over the longer term) – but will not be happy about it. Remember these are the same type of voter that the Conservatives encountered in the Chesham and Amersham by election recently, and we all know how that ended up. Those who are less affluent, particularly voters living in ‘red wall’ seats will not only be unhappy but unlikely to be able to foot the bill.

Data from the Department of Business, Energy and Industrial Strategy shows that fuel poverty has decreased in recent years. Nonetheless there remained 1,928,000 vulnerable households in fuel poverty in 2019 – this represents over 14% of all vulnerable households. Add this to the 3,176,000 non-vulnerable households still in fuel poverty and it is clear there is still a way to go. If the proposals to increases petrol and gas costs rises, progress to date could be seriously jeopardised.

It is clear that targeting the wealthy is the quickest route to success but to encourage broader take-up, the government should look to introduce policy solutions that help those unable to cope with the increased costs.

So, what options are open to government? 

An obvious place to start would be to continue to improve connectivity across the UK and between the nations and indeed, this is something the government is investing in. Providing efficient and greener public transport ultimately reduces the reliance on cars and improving connectivity is a key tenet of the government’s levelling-up rhetoric.

Another option would be to introduce transport vouchers similar to those being piloted in Coventry. The trial, run by Transport for the West Midlands, sees drivers receive up to £3,000 per year in transport vouchers in exchange for scrapping their cars.

The government could also look at scrappage schemes aimed specifically at those from poorer backgrounds, providing a one off-payment towards a new electric vehicle (something which has already been done to encourage electric van take-up).

Interest-free loans are another option. The government would guarantee the loan of the money against a new electric car which could then be deducted in regular payments either through PAYE or another repayment system.

Whilst it is clear that the UK government wants to bolster its green credentials in the run-up to COP26 and be seen as a world leader in this space, it cannot not afford to do so to the detriment of its levelling-up agenda. Setting Britain apart on the world stage in a post-Brexit era is important, but the prime minister must remember the levelling-up pledges in his own manifesto.

Clearly, hitting the 2050 Net Zero target will be expensive and this is particularly difficult in the aftermath of an unprecedented health and economy crisis. We know that the Treasury has been pushing back on spending plans and with the prime minister due to make a speech on levelling up in the coming weeks, we await to see if the proposals are given the ‘green’ light. In the meantime, expect the Prime Minister himself to take a keener, more visible interest in renewable energy over the next few days with visits planned and fresh announcements on the table.

The politics of energy still has lots left in the tank – let’s hope the UK’s Net Zero ambitions are not left running on fumes.

Johanna Bradford is Built Environment Lead at iNHouse Communications