16:39

Downing Street has very firmly, if indirectly, reprimanded Philip Hammond for arguing that a pledge to reduce greenhouse gas emissions to net zero by 2050 would cost the country £1tn, money which could otherwise have been spent on public services.

In a letter to Theresa May, leaked to the Financial Times, the chancellor argued that the target could see some industries become “economically uncompetitive”.

In a robust response, May’s spokeswoman dismissed Hammond’s line of argument, while officially insisting this was a general point, and not directed particularly at the chancellor.

No 10 believe Hammond is, in economic terms, comparing apples and oranges by both treating an all-economy cost as if it was just a government spend, and failing to take account the benefits such a policy would bring, or accounting for the costs of failing to act. Downing Street also says any predicted cost would be bound to fall over time.

The spokeswoman said:

Obviously, I’m not getting into the contents of the letter, but broadly there are a lot of figures out there on this issue that don’t factor in the benefits or consider the costs of not doing this. I would add that the costs related to meeting this target are whole-of-the-economy costs, not a fiscal cost, and so it’s not really right to frame it as a trade-off for public spending. I think that’s important to set out.

Asked if Hammond was thus being misleading, she added: