Starmer set to abandon £28billion green investment pledge

Keir Starmer
Keir Starmer will no longer stand by the figure of £28 billion, it is believed
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Sir Keir Starmer is set to formally abandon his £28 billion green investment pledge on Thursday, arguing that Labour can no longer promise to borrow that amount a year.

The Labour leader will say the party is still committed to borrowing to invest, but, according to a senior Labour source, he will no longer stand by the figure of £28 billion as the ambition.

The move comes after months of increasingly loud attacks from the Conservatives about the policy, which was first unveiled in the autumn of 2021.

It is an attempt to finally give clarity over a position that has been repeatedly watered down and on which shadow cabinet ministers have voiced differing stances in recent weeks.

Sir Keir is likely to blame the move on economic woes seen in recent years under Tory rule and what Labour has claimed is the Conservatives’ “scorched earth” approach to finances that will leave them limited manoeuvrability after the election.

The Tories are likely now to turn their fire on the promises underpinned by the £28 billion a year borrowing plan, specifically the drive to bring about “clean energy” by 2030.

Rishi Sunak and his senior colleagues have been airing the argument this year that Labour does not have a credible plan for government and that more borrowing will mean more tax rises.

In a Tory advertising campaign on the economy released on Wednesday, Mr Sunak explicitly made reference to Labour’s £28 billion pledge and argued it would lead to higher taxes.

Splits in party

The decision by Sir Keir, first reported in the Guardian, reflects how he and Rachel Reeves, the shadow chancellor, have put at the heart of their re-election pitch the message that Labour can be trusted with the public finances.

But the move could reopen splits in the Labour coalition. Trade unions and Ed Miliband, the shadow climate change secretary, have been reportedly pressing Sir Keir to hold firm.

Tory strategists have taken heart from how flat-footed Labour has been in attempting to neutralise Conservative attacks over the figure, with the row making headlines for weeks.

The initial promise of £28 billion a year of new borrowing was eventually changed to include the £8 billion a year that is already borrowed for green projects.

Then it was no longer going to come in from the first year of a Labour government but the second half of the next parliament instead. Then the whole policy was dependent on Labour’s “fiscal rules”.

Now, Sir Keir is expected to say that the party is no longer aiming to hit the £28 billion a year at all in the next parliament. The exact phrasing of the new position remains to be seen.

The Tory aides planning the next election who have relentlessly gone after the £28 billion promise will be heartened by Sir Keir’s decision to abandon the figure.

On Wednesday, they launched a related political attack, using Treasury analysis to claim that Labour’s plans to improve energy efficiency in 19 million homes in the next decade would cost not £6 billion as Labour claimed but £13 billion.

The analysis was dismissed as “bogus” by Labour figures, who noted it assumed all funding for the policy would be funded from central government, which was not their approach.

Yet it acted as a reminder that the Tories in the coming year will continue to zoom in on specific Labour promises, not least on green issues, and question the credibility of those plans.

Mr Sunak’s key message to voters is that it is best to “stick with the plan” under the Tories rather than risk returning “back to square one” under Sir Keir.

The general election is expected to be held in the autumn. The Tories remain close to 20 percentage points behind Labour, a result that would remove them from office if replicated on voting day.

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