Labour’s £28bn Green Investment Pledge Ditched: Keir Starmer Blames Tories for U-turn
In a surprising turn of events, Labour leader Sir Keir Starmer has announced the abandonment of the party’s ambitious £28 billion green investment pledge. Starmer defended the U-turn by blaming the Tories for crashing the economy, making the original plan unaffordable. Despite this setback, Starmer assured the public that Labour remains committed to clean power by 2030 and will still outspend the Tories on green projects if they win the election.
The decision to scale back the investment pledge comes after weeks of confusion and increasing attacks from the Conservative Party. Chancellor Rishi Sunak criticized Starmer, claiming that he lacks a plan for Britain. Labour’s revised plan represents a significant reduction in the amount they intend to invest in green industries if they come into power.
Initially announced in 2021, the £28 billion spending pledge had already been diluted by Labour. Last June, shadow chancellor Rachel Reeves revealed that the spending target would only be met after 2027, rather than from the first year of a Labour government. Additionally, Labour included around £10 billion per year of planned government spending in their figure, making the extra spending commitment compared to the Conservatives closer to £18 billion per year.
Now, Labour has confirmed that the total extra investment compared to government plans will be approximately £4.7 billion per year. To fund this, they intend to keep their proposed “windfall” tax on energy companies’ profits throughout their first term in office, hoping to raise £10.8 billion over five years. This reduced reliance on borrowing aligns with Labour’s goal of meeting their spending rules, which require debt to decrease as a share of the economy within five years.
Sir Keir defended the decision to change the spending plans, stating that it is a “perfectly sensible” move given the economic situation caused by the Conservatives. He emphasized that it would be irresponsible to ignore the damage inflicted on the economy by the Tories. Labour argues that the roll-back is necessary to comply with their spending rules, which prioritize reducing debt as a share of the economy.
However, the decision to abandon the green investment pledge has faced criticism from left-wing campaign group Momentum and Unite, Labour’s largest union backer. Momentum accused Starmer of capitulating to right-wing interests, while Unite leader Sharon Graham urged the Labour movement to stand up against false accusations of fiscal irresponsibility. Carla Denyer, co-leader of the Green Party, expressed disappointment, calling it a massive backward step for the climate, economy, and job quality.
The consequences of scaling back green spending are difficult to assess since Labour never provided detailed information on where all the money would go. However, they have confirmed that grants for home insulation will now only cover five million homes over five years instead of the initially planned 19 million homes over a decade. The funding allocated for this will be £13.2 billion over five years, double the amount currently committed by the government but less than Labour had intended.
Despite the reduction in spending, certain pledges remain unchanged. These include £1.8 billion for nine “renewable-ready” ports, £2 billion for eight battery factories, £3 billion for “clean” steel, and £500 million per year for grants supporting companies creating green jobs. However, it is important to note that the party has specified that the grants for green jobs will not begin until 2026.
Labour had not previously disclosed the amount they planned to spend on GB Energy, the publicly-owned clean generation company they aim to establish. They have now revealed an initial investment of £8.3 billion over five years, with £3.3 billion allocated for councils and community groups to become owners of local power.
Overall, Labour’s decision to abandon their £28 billion green investment pledge has sparked controversy and raised questions about their commitment to tackling climate change. While they argue that the economic situation necessitates a change in plans, critics accuse them of capitulating to right-wing interests. As the election approaches, it remains to be seen how this U-turn will impact Labour’s standing among voters concerned about the environment and the economy.
