Labour has been slammed for pledging to invest £28 billion-a-year in tackling climate change, with critics warning the party’s plans will cause financial misery for millions of Britons.
According to ministers, Labour’s promise to throw money at environmental issues will increase mortgage rates and also make the country more reliant on foreign oil and gas.
The Treasury has reportedly worked out that homeowners may have to fork out up to around £1,000-a-year more due to a rise in interest rates – predicted to be 0.75% – which then has a knock-on effect for mortgages.
And Britain would also have to pay more money for imports as Labour wants to halt new investment in North Sea oil and gas (banning new extraction licences), something the much-maligned protest group Just Stop Oil has been demanding.
The Treasury said: “If interest rates go significantly higher, it could cause financial and market stability risks that lead to a recession.”
The Daily Mail reports that the Treasury also warned the unfunded spending would leave the “Government and Bank of England, pulling in opposite directions’ over inflation”.
Labour first came up with the proposals in 2021, before the cost-of-living crisis reared its ugly head and leading party officials are suggesting that their ideas may now have to be reigned in.
Unions and businesses have criticised Labour leader Sir Keir Starmer for his stance on the North Sea licences, with the former worried that his plan will see many within the industry lose their jobs.
But Starmer will tell the GMB today (June 6): “We will always see the fight for working people as our driving purpose. Labour in government will work with unions.”
David Whitehouse, the CEO of Offshore Energies UK, told BBC Radio 4’s Today programme: “In the UK today, 75 per cent of the energy – what drives our cars, our boilers, our energy – is from oil and gas.
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“We domestically produce about 50% of that. If we choose now to eliminate further investment that means that 80% will have to be imported by the end of the decade.
“That has real-world implications for our energy sector. It means choosing to import oil and gas from countries that do not share our climate goals, and it means exporting the jobs and skills we need to secure our energy transition.”
Starmer, though, said existing licences meant North Sea oil and gas would continue to be part of the energy mix “for many, many years to come”, but he said there was a “once-in-a-generation opportunity now to seize the jobs of the future”, by embracing green energy.
One Cabinet source described Labour’s ideas as “stark raving bonkers” and explained that by making the UK more reliant on foreign fuel, it will simply only serve to threaten energy security.
Even big Labour supporter, the GMB, waded in, calling the proposals “naive”, with union representative Gary Smith saying: “The energy we are going to need in the future, isn’t guaranteed. We still import too much.”
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