Rishi Sunak warned that ditching green promises will hit UK economy as investors lose faith

Britain risks missing out on billions of pounds of investment and 1.7 million green jobs if the Government rows back on its net zero plans, Rishi Sunak has been warned.

A group of leading asset managers and banks has written to the Prime Minister urging him not to U-turn on the Government’s environmental commitments.

The firms, which include some of Britain’s biggest pension fund managers, claimed Mr Sunak had caused “uncertainty” by casting doubt on the phase-out of non-electric cars and gas boilers, as well as by unveiling plans to increase oil and gas drilling in the North Sea.

The Conservatives have sought to draw a dividing line with Labour over green policies, attacking links between the party and one of the major funders of the Just Stop Oil protest group.

Their rhetorical shift comes after the Tories scored a surprise win in the Uxbridge & South Ruislip by-election last month following a campaign which was dominated by debate over the expansion of London’s ultra-low emission zone.

Growing numbers of Conservative MPs are calling for a delay to the 2030 deadline for the sale of new petrol and diesel cars to be banned, although the Government insists it is committed to the push for net zero carbon emissions by 2050.

In the letter to Mr Sunak co-ordinated by the UK Sustainable Investment and Finance Association, finance firms said: “We are writing to express concern at Government’s recent public statements and policy signals, which risk undermining the UK’s leadership in the clarity, certainty, and confidence of policymaking toward meeting the UK’s commitment to net zero.”

They added: “Recent public debates have cast doubt on the UK’s 2030 phase-out of new petrol and diesel cars and 2035 phase-out of gas boilers, while the reforms to the UK’s carbon markets, energy efficiency standards for the private rented sector, and plans to issue new oil and gas licences in the North Sea all cast uncertainty on Government’s commitment to the UK’s near and longer-term climate targets.

“As investors and financial institutions, we need confidence in the Government’s long-term commitment to this agenda to allow us and our investee companies to make multi-billion-pound investments in the UK’s sustainable economy of the future.”

The group, which includes firms such as Aegon, Scottish Widows, Royal London and Jupiter Asset Management, claimed that 1.7 million “green collar” jobs could be created in the UK if the Government commits to “long-term policy” on the shift to renewable energy.

James Alexander, chief executive of the UK Sustainable Investment and Finance Association, said: “The global competition to capture billions of pounds of private investment in the clean industries of the future is intense. Ministers’ recent remarks are undermining investor confidence and putting the UK’s net zero head start at risk.”

Some Tories have previously warned that imposing new curbs on economic activity in order to hit the UK’s net zero targets would hurt British consumers without meaningfully reducing global emissions.

A spokesman for the Department for Energy Security and Net Zero said: “We are fully committed to our legally-binding target of achieving net zero by 2050. In fact, between 1990 and 2021 we cut emissions by 48 per cent while growing our economy by 65 per cent – decarbonising faster than any other G7 country.

“Our determination to reach net zero – while we strengthen energy security and grow the economy – is unwavering and we will continue leading efforts at home and abroad on climate change.”