Net zero review calls for decarbonisation tax breaks and gas boiler ban

Net zero review calls for decarbonisation tax breaks and gas boiler ban


The 340-page document – Mission Zero: Independent Review of Net Zero – was commissioned in September by the then prime minister, Liz Truss.

Chris Skidmore MP was tasked with leading “an independent review into how to deliver its net zero commitment while maximising economic growth and investment, supporting energy security, and minimising the costs borne by businesses and consumers”. As instructed, he has completed the task in just three months.

Skidmore calls for “a step change in the government’s approach to delivering net zero”. He recommends the establishment of an Office for Net Zero Delivery, responsible for placing net zero delivery at the heart of government thinking, taking ownership of net zero priorities where they span different departments.

His recommendations include a review of incentives for investment in decarbonisation, including via the tax system, reforming the planning system to put net zero at the centre, legislating for the Future Homes Standard so that no new homes are built with gas boilers from 2025, and a 10-year campaign to make heat pumps mainstream.

He also calls for a cross-sectoral infrastructure strategy by 2025. “We need to rapidly build and adapt the infrastructure for electricity, hydrogen, other liquid and gaseous fuels and CO2 networks that support our green economy,” he writes. “The scale of this challenge, and the breadth, is too much to be left to the whims of individual projects.”

Other recommendations include the development of a government strategy to decarbonise construction and off-road machinery.

The review is split into two parts, with the first part exploring the opportunity, and benefits to individuals and the economy, emphasising that the UK must go further and faster to realise economic benefits. The second part sets out a roadmap for how government and industry can work to better exploit the opportunities and catalyse action in individual sectors of the economy, enhancing the role of local authorities, communities, and the individual to deliver the green transition.

Chris Skidmore MP
Chris Skidmore MP

“We must move quickly,” Skidmore writes. “We have heard from businesses that economic opportunities are being missed today because of weaknesses in the UK’s investment environment – whether that be skills shortages or inconsistent policy commitment. Moving quickly must include spending money. We know that investing in net zero today will be cheaper than delaying, as well as increasing the economic and climate benefits. Analysis suggests that delaying action by 10 years could mean UK debt could be 23% of GDP higher in 2050, doubling the fiscal cost of achieving net zero and not capitalising on economies of scale. Oxford research has shown that a fast transition to net zero based on scaling up key green technologies will continue to drive their costs down, and transitioning to a decarbonised energy system based on green technologies by 2050 can save the world at least US$12 trillion, compared to continuing our current levels of fossil fuel use.”

Business and energy Secretary Grant Shapps said: “With a wealth of talent and expertise, and a track record to be proud of, the UK is well placed to ensure that tackling climate change also brings new jobs and investment for businesses and communities.

Related Information

“I am grateful to Chris Skidmore – the man who signed our climate commitments into law – for his detailed report today, which offers a range of ideas and innovations for us to consider as we work to grasp the opportunities from green growth.”

The full document can be found at www.gov.uk/government/publications/review-of-net-zero

British Property Federation assistant director Rob Wall said: “The Skidmore review has highlighted several of the barriers the property industry is experiencing as it looks to transition to net zero. A lack of regulatory and policy certainty is impacting the ability for businesses to make long-term investment decision, while the significant cost of retrofitting and improving assets can be prohibitive. We recognise that the property industry has a significant role to play in decarbonising, the review recommends the creation of an overarching finance strategy to provide valuable support and for the tax system to be reviewed so it incentivises changes, both of these are essential. The planning system is another vital component of ensuring we deliver the necessary green infrastructure to move away from a reliance on gas, however the review could have gone further on mandating renewable energy sources, such as solar panels, on new developments.”

Federation of Master Builders (FMB) chief executive Brian Berry said: “The building industry is raring to act on energy efficiency improvements, which will decarbonise existing homes and reduce energy consumption, but there has been a lack of direction from the government now for too long. The FMB welcomes the recommendations made in this report from Chris Skidmore as they show that with the right policy levers being pulled, the building industry can deliver a long term national retrofit strategy, which the FMB has long been championing.

“It’s also positive that the creation of ‘retrofit hubs’ is a key recommendation for moving the industry forward. The FMB and partners have been working on setting up a cross industry retrofit hub to help co-ordinate and upscale retrofit delivery. The report rightly notes that a net zero skills plan will be needed by the government. There is a serious skills shortage in the building industry with at least a third of FMB members finding it difficult to hire bricklayers and carpenters. We need to see a clear roadmap for skills and a market for retrofit so that local builders can make the transition to training up in new green skills. 

 “What is abundantly clear from the Skidmore Review are the benefits of retrofitting – it’s a win-win solution. Retrofitting of existing homes lowers bills, warms homes, creates jobs, and provides local builders with skills for the future. The review points out what needs to be done by the government to make net zero a reality and industry stands ready to deliver on it.”    

Institution of Civil Engineers (ICE) director of policy Chris Richards said: “It is extremely encouraging to see today’s Net Zero Review describe infrastructure as ‘the key that will unlock net zero.’ We could not agree more that infrastructure has a vital role to play in reaching our climate goals, and the report’s recommendations align with the ICE’s position that economic levelling up ambitions and net zero targets should be linked. You can’t succeed at one while ignoring the other.

“However, in the current economic crisis the government needs to make it easier for people to make greener choices across key areas like improving home energy efficiency and access to reliable public transport. Additional place-based initiatives and funding will be instrumental in empowering people to make the lasting behavioural changes needed.

We urge the government to accept the recommendations in this Net Zero Review and to implement them as soon as possible – there is no time to waste.”

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