THE assessment of the damage Net Zero could do to the economy admits that Sun readers will be hit the hardest.
Pressure on lower income households to change their lifestyle, heating and cars will be beyond many of them, civil servants admit.
The assessment of the damage Net Zero could do to the economy admits that Sun readers will be hit the hardest[/caption]
It says spending will be squeezed, especially after a decade of weak wage growth, the cost-of-living crisis, high inflation and high interest rates.
The Macroeconomic Impacts of the Net Zero Transition report says it is questionable whether less well-off households will be willing or able “to forgo consumption to fund higher investment.
“This raises questions as to whether the most affected households at the lower end of the income spectrum will be not just willing but in fact able to forgo consumption to fund higher investment.”
Written by the Business Department’s Economy & Strategic Analysis Team, it adds that public spending will be needed to offset such problems.
It says “the overall impact of the transition to Net Zero on public finances is likely to be negative: Public spending will be required to offset negative impacts on disadvantaged groups.
“Government will need to fund high levels of public sector investment.”
And it adds: “This is particularly relevant in the current context of high inflation, weak real wage growth, rising inequality, and high interest rates – which makes it harder for businesses and households to borrow and puts more fiscal pressure on Government when public services also demand more funding.”
Earlier this week Conservative leader Kemi Badenoch wrote in The Sun: “Anyone who has done any serious analysis knows Net Zero 2050 cannot be achieved without bankrupting us or the country.”
The report found that the overall impact of the transition to Net Zero on public finances is likely to be negative[/caption]
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