Cut green taxes on British businesses, Labour MPs tell Starmer

Telegraph

12-07-2025

Labour MPs have called on Sir Keir Starmer to reduce net zero taxes on oil and gas producers or risk destroying thousands of jobs in their constituencies.
The MPs say that producers are at risk of being moved to other countries to escape carbon taxes imposed by the UK and EU.
Their demand is a significant push back against Downing Street's plan to reach net zero by 2030 by making it more expensive to produce energy from fossil fuels, which is becoming increasingly unpopular with voters.
A new report from the Commission for Carbon Competitiveness, which is chaired by a Labour MP, said that the UK should create more exemptions to carbon taxes for British companies.
The commission is calling for British companies to be given free credits to emit carbon under the UK's Emissions Trading Scheme, and to ignore the threat of legal action by the World Trade Organisation.
The demand, which is expected to be backed by dozens of MPs, comes after Sir Keir announced the UK would join the EU's carbon tax system, which could drive up the cost of energy for British companies.
Henry Tufnell, the commission's chairman, said the UK must pursue a 'just transition' towards net zero, and 'compete with the big industrial powers' like China and the United States.
Mr Tufnell, who represents the Welsh constituency of Mid and South Pembrokeshire, said producers in his area would close down and move their operations abroad without further support from the Government.
'If we can't be competitive with other countries around the world, all that happens is you end up exporting your carbon to other places that have less stringent policies,' he told The Telegraph.
'In Pembrokeshire, we used to have four oil refineries and now we have one. The oil refineries just take down all their factories, move them to a country like Pakistan, which has significantly less in terms of strict regulation on emissions.'
'Level playing field'
Some officials are concerned that giving British companies who export carbon-intensive products preferential treatment would open the UK up to legal challenges.
The WTO's rules are designed to ensure that companies operating in different countries can compete fairly.
But Mr Tufnell said that anyone hoping the organisation would create a 'level playing field' was 'living in cloud cuckoo land'.
'While Donald Trump is president of the United States it's going to be completely ineffectual,' he said, adding that he hoped to have 'significant support' for his proposals from Labour MPs who represent constituencies with heavy manufacturing or oil and gas plants.
The report is co-authored by another Labour MP, Melanie Onn, a former Conservative MP and a Conservative peer.
It comes amid rising scepticism towards the UK's net zero ambitions from some MPs. A report by the Office for Budget Responsibility this week estimated that the transition would cost £800bn.
New polling seen by The Telegraph finds that voters overwhelmingly want Labour to prioritise tackling the cost of living over net zero targets and 'woke' issues.
The findings will pile pressure on Downing Street to change course and take a more muscular approach to easing the pressure on households.
Top priority
One poll found that more than half of voters think bringing down the cost of gas and electricity should be the Government's top priority.
In contrast, just over one in 10 people said that reducing carbon emissions from energy usage was the most important thing to them.
YouGov asked voters which was most important to them out of the cost of bills, the security of Britain's energy supply, and carbon emissions.
Overall 55 per cent said that bills were their top priority, compared to 21 per cent who said security of supply and 12 per cent for emissions.
The results were most stark amongst those who voted for Reform at the last election, with 70 per cent saying bills and just five per cent citing emissions.
But even Labour voters are more focussed on their energy costs, with 48 per cent prioritising bills compared to 22 per cent who said emissions.
The survey was commissioned by the Energy and Utilities Alliance, a leading industry group which represents businesses in the energy sector.
Mike Foster, its Chief Executive, said: 'Whilst the UK being the first nation to achieve net zero might be a laudable ambition, overwhelmingly UK adults want the government to prioritise policies to address the cost of energy bills.
'This is certainly true for those that voted Reform at the general election last year. There is support to achieve net zero by 2050, but that cannot be on the basis of whatever it costs.
'Ed Miliband made a clear commitment to reduce energy bills by £300 and delivering on this will help determine how people vote at the next election, probably more so than reducing carbon emissions.'