Sam Richards: Sunak’s Net Zero speech. It disappointed investors and demoralised allies. Nonetheless, his plan may work.

21 September, 2023
ConservativeHome, by Sam Richards


The good news is that the carpool carabinieri won’t be knocking on your door any time soon. In his bold repositioning on Net Zero, the Prime Minister wisely ruled out such policies as compulsory car sharing, steak bans, and seven bins for every household.

But alongside the bonfire of the invisible red tape, there were two matters of substance in the Prime Minister’s speech. The first was the pushing back of the date for the phaseout of new petrol and diesel vehicles from 2030 to 2035. Now, in some ways this won’t make much of a difference for consumers. Most people buy their cars second hand – hundreds of thousands of petrol and diesel cars would still have been bought and sold after 2030 under the old target. There was also always the provision that hybrids would still be sold from 2030 to 2035.

But the flip-flopping has spooked investors. “Our business needs three things from the UK government: ambition, commitment, and consistency. A relaxation of 2030 would undermine all three.” Ahead of the speech, the Chair of Ford in the UK set out, in crystal clear terms, that shifting the target would dent their faith in Britain as a place to do business.

The Net Zero transition involves mobilising huge amounts of private capital to invest in technology of the future and secure the jobs that come with that. Car manufacturers work, at a minimum, to seven year investment cycles. At the exact point when the US, the EU, China, and others are investing trillions in new clean industries, sending out the signal that the UK, as another auto industry source put it, is “closed for business” wasn’t the wisest thing to do.

Yet while the target matters to guide investment, the real driver of electric vehicle uptake will be if people can afford to buy them and feel confident charging them. The first half of this equation will be taken care of over the course of this decade – the cost reductions in batteries mean that the electric version of a petrol car will be the same sticker price by the late 2020s. The second half, on confidence in our charging infrastructure, was addressed by the second substantive point that the Prime Minister made – on the need to speed up planning and reform grid connections.

I’ve spoken to hundreds of firms across the country over the last year. lanning and grid come up in almost every conversation. They’re at the heart of why it takes up to 13 years to get an offshore wind farm up and running, despite construction taking just 2. They’re the reason why we have unconnected EV chargepoints sitting unused in service stations.

The Prime Minister trailed a move to spatial planning in his speech; if this is akin to the clean energy zones that the EU have deployed, which allow clean energy developers to bypass cumbersome planning rules in areas of low natural value, this could be game-changing. Meanwhile, by aggressively accelerating the connection of EV chargers to the grid – perhaps by introducing a market mechanism into the grid queueing system – the Government can make electric vehicles a much more attractive choice for drivers.

The last 24 hours have disappointed investors in Britain and demoralised our allies around the world. But if the Government is serious about planning reforms and changes to the way we hook stuff up to the grid, it’s just possible today’s speech could end up accelerating the rollout of electric cars, and the deployment of new clean energy.