Labour has ditched its pledge to spend £28bn a year on green investment, blaming the Conservatives for “crashing the economy”. The policy, the main component of Labour’s green prosperity plan, has been at the centre of a public and private struggle since it was announced, with factions inside the party arguing against moves to water it down. The plan has now been drastically scaled back to under £15bn a year, only a third of which – just over £4.7bn a year – would be new money. Below are some of the key moments leading up to this point. 27 September 2021 Rachel Reeves, the shadow chancellor, pledges to become the UK’s first “green chancellor” and invest £28bn a year for the rest of the decade, in front of cheering Labour members at the party’s conference in Brighton. 23 September 2022 Liz Truss and Kwasi Kwarteng’s disastrous mini-budget leads to what is later estimated to be a £30bn fiscal black hole, setting the scene for a recalibration of Labour’s own spending plans and pledges.
9 June 2023 Labour scales back plans to borrow £28bn a year to invest in green jobs and industry. Citing the poor economic backdrop and interest rate rises since the Truss mini-budget, Reeves delays plans for a green prosperity fund to start in the first year of a Labour government. December Discussions within Labour about scaling back the £28bn plans increase amid fears the Conservatives will use the policy as a central line of attack in the general election campaign. But sources also express concern about how a Labour government would improve economic growth without the green plan, and whether it could leave Keir Starmer open to charges of “flip-flopping” by the Tories. 31 January 2024 A pushback against plans to water down the pledge gathers pace among leading economists and business experts. Jürgen Maier, the former UK head of Siemens and a figure advising Labour on transport and infrastructure, describes £28bn a year as an “absolute minimum”. 1 February 2024 The Guardian reveals that the £28bn a year pledge is to be ditched. Asked 10 times on Sky News if she backed the target, Reeves refuses to use the number at all, saying instead: “The importance of economic and fiscal stability … will always come first.” Jonathan Reynolds, the shadow business secretary, says the figure remains an ambition but it is unclear “if we can get there”. Darren Jones, the shadow chief secretary to the Treasury, all but confirms a day later that the commitment is going. 6 February Starmer says in a Times Radio interview that the pledge to spend £28bn a year is “desperately needed”, as he reopens the issue and supporters view his comments as a recommitment. The Labour frontbencher Chris Bryant says a day later: “On the £28bn, we are not scaling back. We intend to deliver that.” 7 February
Bryant, the shadow culture minister, says in a morning interview that Labour will spend £28bn. Hours later, after prime minister’s questions in parliament, a Labour spokesperson tells reporters the party is committed to “£28bn, subject to the fiscal rules and subject to what the government leave on the table”. 8 February Labour confirms the party does not now believe it will be able to meet the commitment of £28bn a year in its green prosperity plan, blaming the Conservatives for “crashing” the economy, and what it described as the government’s plan to “max out the country’s credit card”. Instead, Labour “reconfirms” its commitment to policies under the plan to create jobs and cut bills. It says the policies would represent £23.7bn of investment over the course of the next parliament, funded in large part by a windfall tax on oil and gas companies, with the remainder coming through borrowing within its fiscal rules.