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October 23, 2023

UK should consider ‘green levies’ and other net zero measures, says banking trade body

Solar panel farm Renewable energy
UK Finance’s report is aimed at mobilising capital towards the country’s net zero transition (Photo: James MacDonald/Bloomberg)

Blended finance, new sector-specific plans and targeted tax incentives are part of UK Finance’s list of demands to the government in the push towards mobilising capital for the green transition

The UK government should reissue net zero road maps for different sectors and give an independent body such as the Office for Budget Responsibility the power to track financial flows, argues UK Finance, which represents banks and financial services companies, in a new report.

The study is aimed at mobilising capital towards the net zero transition and appeals for the government to push for coherence across sustainability regimes around the world, emphasising the need for “the right level of expertise” at organisations such as the International Sustainability Standards Board.

UK Finance also mooted changes to the UK’s tax system, including “green levies”, in a push to encourage sustainable behaviour. Changes to customers’ electricity bills could help incentivise homeowners to replace gas boilers, the report suggests.

The report separates its recommendations into “low-cost” and “higher-cost” actions. New road maps and a public investment bank with a greater “risk-taking capacity” to attract private capital are regarded as low-cost; while UK Finance’s suggestion that the government raises sources of public financing and considers increasing the loan book of the UK Infrastructure Bank — the country’s public investment bank — are acknowledged as being more expensive measures.

Infrastructure and planning features on its list of requests, including a call for “long-term clarity on the process to achieve outcomes like the phase-out of diesel and petrol cars”. The government’s decision to push back a planned ban on new diesel and petrol vehicles from 2030 to 2035 was criticised by automotive giant Ford.

You can read the report here.

A service from the Financial Times