Labour has ditched its flagship policy of spending £28 billion a year on a green prosperity plan as Sir Keir Starmer blamed interest rates and the government.
“I can’t ignore the fact the Conservatives have done huge damage to the economy,” said Sir Keir, referring to former Prime Minister Liz Truss and former Chancellor Kwasi Kwarteng’s 2022 mini-budget and the consequent reaction by the City of London which sent interest rates shooting up.
Labour’s original promise was that as soon as they came into power they would spend £28 billion annually on renewable energy projects, home insulation, and various other transitions to a green economy.
The policy was first announced in September 2021 but in recent months Sir Keir and his shadow chancellor, Rachel Reeves, have appeared increasingly unwilling to talk about it or use the figure itself.
On Thursday, Sir Keir said the pledge was being shelved owing to changes in the economic landscape since 2021.
‘I Don’t Want to Have a row About the Size of a Cheque’
But he played down the u-turn and said: “There is nothing we have said we will do that we are now saying we won’t do. I don’t want to have a row about the size of a cheque. I want to have a row about the outcomes.”
In June 2023 Labour adjusted the pledge and said they would seek to meet the £28 billion target halfway through their first term in office.
Last month Sir Keir described the £28 billion figure as “a confident ambition” but said it would be subject to the party’s fiscal rules.
But Ms. Reeves and other shadow Cabinet ministers avoided mentioning the figure altogether.
Greens Call It ‘Massive Backward Step’
Carla Denyer, co-leader of the Green Party, said it was a “massive backward step.”She said: “Labour have chosen to wear their fiscal rules as a millstone around their neck. A different approach through tax reforms, in particular by introducing a wealth tax on the super-rich, could help pay for the green transition. There is more than enough money in the economy to pay for this.”
Prime Minister Rishi Sunak, referring to Sir Keir, said: “This is a serious moment. This was the flagship plank of Labour’s economic policy and it now looks like he’s trying to wriggle out of it.”
Speaking during a trip to Cornwall, Mr. Sunak said: “It demonstrates exactly what I’ve been saying, that he u-turns on major things, he can’t say what he would do differently because he doesn’t have a plan. And if you don’t have a plan, then you can’t deliver change for our country.”
“In contrast, our plan is working and people can see that. Inflation has come down, mortgage rates are starting to come down and because economic conditions have improved, we’ve been able to start cutting people’s taxes,” added the prime minister.
In Parliament on Wednesday Mr. Sunak had accused the Labour leader of flip-flopping on policy and cracked a joke about Sir Keir being unable to “define a woman.”
On Thursday he was asked to apologise for the remark by Peter Spooner, the father of Brianna Ghey, whose killers were jailed for life last week. Brianna was a boy who identified as a girl and the judge said he believed one of the killers was motivated by transphobia.
Sunak Says Starmer Has ‘Proven’ PM’s Point
But Mr. Sunak refused to apologise for the remark and said he was actually making a serious point.“A point only proven by today’s reports that the Labour Party and Keir Starmer are apparently planning to reverse on their signature economic green spending policy,” he added.
The chief secretary to the Treasury, Laura Trott, said, “This is a serious moment which confirms Labour have no plan for the UK, creating uncertainty for business and our economy.”
“On the day that Labour are finalising their manifesto, Keir Starmer is torpedoing what he has claimed to be his central economic policy purely for short-term campaigning reasons,” she added.
The SNP’s leader at Westminster, Stephen Flynn, said, “Keir Starmer’s damaging decision to cut energy investment will destroy Scottish jobs, harm economic growth, and hit families in the pocket by keeping energy bills high.”
“It’s a weak and short-sighted u-turn, which shows Westminster is incapable of delivering the investment Scotland needs to compete in the global green energy gold rush and secure strong economic growth,” he added.
