In a significant shift, the UK’s Labour Party is abandoning its £28bn annual green investment plan. Though it is not completely dropping its Green Prosperity Plan, which includes the creation of a public green power company, it will no longer allocate funding to green energy development if it wins the next election. Some senior Labour figures had been avoiding the £28bn figure when questioned in interviews about the party’s policy in recent weeks. Party Leader Sir Keir Starmer had continued to support the financing of the investment plan.
Labour will argue that it must be seen as a responsible steward of the economy rather than committing to an expenditure pledge that critics consider irresponsible. Shadow Chancellor Rachel Reeves first revealed the party’s green investment plan in September 2021. The £28 billion target was altered last June so that a Labour government would meet it about halfway through its first term rather than in the first year. Ms Reeves had stated that Labour needed to be responsible with public finance considering the poor economic backdrop and the increasing cost of borrowing. Since then, doubts have been rising about whether the policy could be reduced further.
A source within the Labour party has privately acknowledged an existing “brand weakness” in terms of economic credibility. It is therefore more vital to try to reassure voters that they can be trusted with the economy rather than to hold onto the £28bn promise. The move has been accused of being a “capitulation to right-wing interests” by left-wing Momentum and Labour’s biggest union supporter, Unite. Meanwhile, Green Party Co-leader Carla Denyer remarked that it was a “massive backward step,” damaging both the planet and the country’s economy and jobs.
On Thursday, Sir Keir completed the drafting of the party’s general election manifesto. It comes during a day when Treasury analysis by the Conservative Party found that part of Labour’s proposal to insulate homes would cost twice as much as Labour had claimed. Labour rejected the analysis as “bogus
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