Rishi Sunak has urged the Bank of England to ease up on its opposition to fossil fuel investment despite the UK’s green commitments.
In a letter Sunak told the Bank of England’s governor not to thwart projects on green grounds if they are important to UK energy security, the Telegraph first reported. The Chancellor is seeking to boost oil and gas production in the North Sea amid concerns over Russian energy supplies to Europe.
“Where practical and relevant, the committee should have regard to the Government’s energy security strategy and the important role that the financial system will play in supporting the UK’s energy security – including through investment in transitional hydrocarbons like gas – as part of the UK’s pathway to net zero,” Sunak wrote in a letter to Andrew Bailey, seen by the Telegraph.
Sunak wrote that ministers are taking a “balanced approach” to energy amid the Ukraine conflict by “supporting our strong and evolving UK hydrocarbon industry,” as well as exploring greener options
Fossil fuels play a “critical role” in the UK’s energy mix Sunak added, in spite of a recent Westminster report warning that Britain will miss its net zero target without urgent action.
Peers urged the government to introduce financial incentives to speed the transition to net zero and warned that expecting the costs to be met by consumer energy bills would place a “severe burden” on households which are already feeling the strain.
The UK is in the grips of a cost of living crisis being driven in part by soaring energy prices amid a global gas shortage. Last week the energy price cap jumped by 54 per cent sending annual energy bills soaring to almost £2000 for 22m UK households.