Treasury analysis warns that Starmer's £28BILLION net zero strategy will drive ... trends now
Labour's ‘bonkers’ green energy plans will drive up mortgage rates and make Britain more reliant on foreign oil and gas, ministers warned last night.
Treasury analysis suggests that the idea of investing £28billion a year in tackling climate change could increase interest rates by 0.75 per cent, piling misery on millions of homeowners.
The study said a rise of that level would see the standard interest payments on a £200,000 home loan go up by £83 a month, almost £1,000 a year.
Quizzed about the proposals, Labour hinted the pledge could be scaled back, with a spokesman saying the final plan would be ‘subject to our fiscal rules being met, which includes getting debt falling.'
The Treasury's analysis warns the unfunded spending would leave the Government and Bank of England ‘pulling in opposite directions’ over inflation.
Keir Starmer has come under fire from all sides over his move to halt new investment in North Sea oil and gas
The Labour leader faced criticism from both business and unions after confirming he would ban new extraction licences in the North Sea – a key demand of the campaign group Just Stop Oil
‘The Bank of England will offset looser fiscal policy with higher interest rates, weighing on the recovery,’ it states.
‘If interest rates go significantly higher, it could cause financial and market stability risks that lead to a recession.’
The green spending plan was announced in 2021 before global inflation took off – and interest rates followed. Senior Labour figures are debating whether it will have to be scaled back to reflect the more straitened economic circumstances.
The warning emerged as Keir Starmer came under fire from all sides over his move to halt new investment in North Sea oil and gas.
The Labour leader faced criticism from both business and unions after confirming he would ban new extraction licences in the North Sea – a key demand of the campaign group Just Stop Oil.
Offshore Energies UK, which represents the industry, warned the plan would see the UK’s reliance on fossil fuel imports rise. And unions called on the Labour leader to adopt ‘plans, not bans’ amid fears for jobs.
