The chancellor of the exchequer must lay out urgent plans to realign government spending with the target to cut carbon emissions to net zero, or risk missing the target and fuelling high carbon emissions for years to come, Labour has urged. The warning comes as the Treasury prepares key policy announcements on the UK’s recovery from the coronavirus recession, which Rishi Sunak is expected to set out in his spending review next week. Environmental campaigners are pinning their hopes on the chancellor proving more receptive to a green recovery than the prime minister, after Boris Johnson set out his vision for a “new deal” this week in which the climate crisis merited barely a mention, but “newt counting” was singled out as “a drag on productivity”. Wes Streeting, Labour’s shadow exchequer secretary to the Treasury, said a key test for Sunak would be the Treasury’s Green Book, a set of guidelines that governs how ministers and civil servants appraise and evaluate policy, projects and programmes. Streeting wants to see sweeping reforms. “The Treasury really is crucial [and] should step up,” he told the Guardian in an interview. “A reform of the Green Book should have net zero writ large, so that the civil servants and ministers making appraisals of policy can take account of whether those policies help or hinder reaching net zero.” The Green Book matters because in the past many proposed green policies, such as incentives for low-carbon energy, or infrastructure building, have fallen foul of the Treasury’s criteria on value for money. But if the net zero target, enshrined in law last year, is to be reached then it must also be made a key criterion for the Treasury. “They are squandering this opportunity,” said Streeting. “The government approach to climate change reeks of complacency. But the Committee on Climate Change has warned that they’re not going far enough, fast enough. There is no plan for net zero.” Streeting also called for the chancellor to put in place a programme of energy efficiency improvements for Britain’s homes: the draughtiest in Europe and a leading source of greenhouse gas emissions. On electric vehicles, he said the government needed to provide more incentives to car-owners. He urged the chancellor to fund a new green infrastructure bank, that would provide public money and attract private sector investment for big projects such as improving the railways and public transport. The long-awaited national infrastructure strategy has been put off until this autumn, which will also delay net zero plans, he warned. “There is no shortage of ideas and recommendations [on how to ensure the economic recovery is in line with the net zero target] but what’s missing is leadership and action,” Streeting said. If the government were to bring forward plans for a green recovery, Labour would support them, he pledged. “We worked constructively with the government on the coronavirus crisis,” he pointed out. “Net zero is a cross-party issue.” The Liberal Democrats are also pushing for the government to ensure its spending plans lead to a green recovery, after Johnson’s “new deal” announcement held little new policy on cutting emissions. The party is hoping for wider backing for a new draft bill that would require the secretary of state to help the 2.6m households in England living in fuel poverty, making fuel bills cheaper and reducing the UK’s carbon footprint. The private member’s bill would require the government to ensure all fuel-poor households were brought up to energy performance band C by 2030 and all other households to the same band by 2035. The Liberal Democrat peer and former MP for Bath, Don Foster, told the Guardian that the government had promised such action on fuel poverty in 2017 but had failed to follow through. “The prime minister has promised a green recovery to help rescue our economy from the coronavirus crisis – however, we are yet to see any concrete action,” he said. “If this government is determined to prove their green recovery is more than just empty promises, they need to be more ambitious. Backing this bill would be a welcome start.” A Treasury spokesperson said: “The Green Book requires that environmental impacts – including the impact on our net zero target – are considered in all government investment decisions. We remain committed to tackling climate change and as our economy reopens following from the coronavirus outbreak we will seeks to drive clean, sustainable growth across all regions. This includes continuing the review of the Green Book and our processes for allocating funding.” Next week, after the chancellor’s announcement, the UK will be one of the leading participants in a key summit on the green recovery, to be held by the International Energy Agency with the US, China, India, Brazil and the EU participating. The UK will be in the spotlight as host of the next UN climate summit, Cop26, postponed to next year. Streeting said: “Cop26 is the last chance saloon. The UK has a huge responsibility to the rest of the world. But we are clearly behind on Cop26. We need to do more.”