Tory leadership hopeful Rishi wanted a green tax on fuel as Chancellor (but No10 blocked it)

Rishi’s petrol bombshell: Tory leadership hopeful wanted a green tax on fuel as Chancellor (but No10 blocked it)

  • The Tory leadership candidate proposed ‘fossil fuels emissions trading scheme’
  • Former chancellor’s suggestion was shut down by Boris Johnson and Cabinet
  • He has already come under pressure to pledge tax cuts and ease cost-of-living 

Rishi Sunak privately lobbied for the introduction of a green levy on fuel last year when he was chancellor, it emerged yesterday.

The Conservative leadership candidate, who has attracted the most votes from Tory MPs going into the second week of the race, proposed a ‘fossil fuels emissions trading scheme’.

But the former chancellor’s suggestion was shut down by other Cabinet members and outright rejected by Boris Johnson, it was reported. The levy would have added hundreds of pounds to annual fuel bills for motorists, a source said.

Mr Sunak has already come under pressure to pledge tax cuts and present ideas to ease the cost of living crunch during the leadership campaign, but has been more reluctant than his rivals to make policy commitments.

His spokesman said last night: ‘This was part of work looking to expand our emissions trading scheme to make our country greener – an agenda that was championed by No 10. Officials explored many options, as they always do, and it was not taken forward.’

Rishi Sunak privately lobbied for the introduction of a green levy on fuel last year when he was chancellor, it emerged yesterday

Mr Sunak’s suggestion, drawn up by the Treasury, intended to put a price on pollution coming from road transportation, shipping, diesel trains and heating buildings, which make up more than 40 per cent of the UK’s carbon emissions.

Proposed just months before the UK hosted the Cop26 climate summit in Glasgow in October last year, the plan was meant to shift responsibility for carbon emissions on to fuel importers and refiners, rather than the burden falling primarily on end users.

In order to encourage a shift towards green energy on the way to achieving the Government’s net zero commitments by 2050, firms would be forced to buy an allowance to cover any emissions created from the burning of the fuel they sold.

Mr Sunak proposed to set an annual cap on these emissions, which would gradually reduce every year, Bloom berg reported.

But the plan was opposed by senior members of the Government, with Business Secretary Kwasi Kwarteng and Mr Johnson suggesting the costs of the levy would be passed on to consumers at a time when the price of fuel was already rising.

Mr Sunak had been under pressure from Tory backbenchers to go in the other direction and slash fuel duty for motorists, currently paying record prices at the petrol pump.

He announced a 5p cut on fuel duty in his Spring Statement, but this has not prevented prices from inching towards £2 a litre at a time when other household bills are soaring.

Last month, before he quit as chancellor, Mr Sunak admitted the measure was ‘not being felt at the pumps because of the rise in wholesale prices’. But he has not pledged to cut fuel duty further, unlike some of his leadership rivals.

He is also refusing to scrap the green levy on energy bills, which helps fund investment in renewable energy, whereas Liz Truss and Kemi Badenoch have pledged to do so.

Nor has Mr Sunak committed to immediate tax cuts, saying he would only slash rates ‘responsibly’.

… and he put a stop on licence fee review, leaked letter shows 

By Jason Groves, Political Editor for the Daily Mail 

A review into scrapping the TV licence fee was ‘blocked’ by Rishi Sunak despite him claiming to be open to the idea, according to a leaked Whitehall letter.

During leadership hustings with Tory MPs this week, the former chancellor said the Government’s midterm review of the BBC Charter should be used to look at alternatives to the £159 annual licence.

Asked if he was prepared to scrap the fee, he replied: ‘Of course, we’ve got a consultation and we should use that process.’ An aide later confirmed he was ‘open’ to the idea.

But the leaked letter revealed that Culture Secretary Nadine Dorries warned Boris Johnson this month that the Treasury was imposing such strict conditions on the review, it would be rendered worthless.

In the letter, seen by the Daily Mail, Mrs Dorries says the Treasury was banning any consideration of alternative funding models.

She said this would make it impossible to work up alternatives to the licence fee when it next came up for renewal in 2027, adding that if Mr Sunak got his way, ‘any government would be forced to continue with the licence fee beyond 2027’.

Mrs Dorries also warned that the midterm review might have to be abandoned altogether as it was ‘likely that any credible candidate would refuse to lead a review with these restrictions’.

Mr Johnson first revealed the Government was looking at abolishing the licence fee during the 2019 election campaign, with aides saying he was interested in replacing it with a subscription model more suited to the modern broadcasting landscape. In April this year, Mrs Dorries said the Government was pursuing the issue, adding that she was ‘ready to implement a new way of funding’ the corporation.

A source close to Mr Sunak said last night: ‘The BBC is an institution which everyone agrees needs reform. But getting rid of the licence fee and just replacing it with another tax makes no sense.

‘Rishi is absolutely supportive of the review.’