Labour to ditch £28bn green investment pledge blaming Tories for 'wrecking the economy'

7 February 2024, 22:46 | Updated: 8 February 2024, 13:08

By Kieran Kelly

@kellyjourno

Labour is set to abandon its staple environmental policy of spending £28 billion a year on green projects in a major U-turn.

An announcement about the party's flagship green prosperity plan will be announced on Thursday following months of uncertainty about the pledge.

Senior figures have refused to commit to the figure in recent weeks, even though Sir Keir Starmer used it himself this week.

The Labour leader will confirm that the pledge is being scaled back due to the changing economic landscape, reports suggest.

In 2023, Labour said the £28 billion-a-year target would instead be met in the second half of a first parliament, rather than immediately, should they get into No10.

Labour has insisted for weeks that it remains a target, though said it would be subject to its "strict" fiscal rules, which include getting debt falling as a percentage of GDP.

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Shadow chancellor Rachel Reeves has repeatedly declined to recommit to the spending pledge, instead highlighting the need for "iron discipline" with the public finances.

But on Tuesday, Sir Keir said the money was "desperately needed" for the party's key mission to achieve clean power by 2030.

The Conservatives have also seized on the figure as a key attack line in the run-up to an election this year, claiming Labour would ultimately have to raise taxes to meet the "unfunded spending spree".

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Reacting to the news on LBC this evening, Tory MP and former chief whip Wendy Morton said: "[It's] another flip flop, another u-turn, this just shows Labour doesn't have a plan."

Meanwhile, former Green Party leader Baroness Natalie Bennett said: "If you want green, you clearly have to vote Green at the next election...to be really serious about this, this is obviously a great concern environmentally, but it's also a great concern in terms of the cost of living crisis, in terms of public health and the quality of people's lives."

Labour has pointed to recent economic turmoil under the Tories, including the turbulence caused by Liz Truss' mini-budget in 2022, when accused of watering down its flagship environmental pledge.

It was first announced in September 2021 by Ms Reeves, who at the time committed to spending an extra £28 billion each year to help Britain tackle climate change if the party wins power.

The U-turn would come after the Tories claimed an official Treasury costing had suggested that part of the plan - to upgrade insulation for 19 million homes - would cost more than double the party's estimate of £6 billion.