LONDON — Keir Starmer's Labour Party u-turned on its green investment plans after months of speculation.
The party on Thursday ditched its totemic pledge to spend £28 billion a year on green policies — slashing those spending plans by nearly 75 percent.
In a move likely to dismay green campaigners and the left-wing of the party, Starmer told reporters the target would be “stood down.”
The party — on course for government on current opinion polling — has now pledged to spend £23.7 billion on its Green Prosperity Plan over the entire course of the next parliament, on top of the roughly £10 billion per year already committed by government.
As a result, the actual increase in green investment per year under a Labour government would be £4.7 billion. Labour’s old spending plans had been expected to add around £18 billion extra per year to achieve the £28 billion target — meaning the new policy represents a huge cut of nearly 75 percent.
Starmer said he wanted to “focus on the outcomes” of the green plans, not the “size of the check.” The party’s aim of achieving a decarbonized power grid by 2030 remains in place. The Labour leader insisted the new spending plan was still consistent with that goal.
But Starmer said as recently as this Tuesday that he was still committed to the £28 billion figure, insisting investment was “desperately needed.”
The cuts include a big decrease in spending on domestic energy efficiency measures, from a target of £6 billion per year by the end of the parliament to just £6.6 billion over five years.
Starmer said it would mean only 5 million homes being insulated in the next parliament. The party’s previous ambition was to insulate 19 million homes over the next decade.
Shadow Chancellor Rachel Reeves said the party’s plans would be funded through an extension of the windfall tax on oil and gas producers, bringing in £2.2 billion a year, along with £2.6 billion per year in additional borrowing.
Labour hope the stripped back spending plan will blunt Conservative attacks over its economic policy. Prime Minister Rishi Sunak, speaking ahead of Starmer’s announcement, said: “I think it demonstrates exactly what I’ve been saying — that he U-turns on major things, [that] he can’t say what he would do differently because he doesn’t have a plan.”
Labour's new spending plan includes an £8.3 billion capitalization for its planned state-run power company, GB Energy.
The party’s planned National Wealth Fund, which will invest in electric car production, ports, clean steel, hydrogen and carbon capture, will receive £7.3 billion, £2.5 billion of which will go to green steel.
Steel had previously been allocated £3 billion, but Starmer said that the new figure reflected the fact that the Conservative government had now included a £500 million investment in their own spending plans.
The plans are backed by Shadow Energy and Climate Secretary Ed Miliband, the main advocate for the party’s green agenda.
In a statement, Miliband said Labour would still be fighting the forthcoming election with a“world-leading agenda” on climate.
All the party’s pre-announced green policies would still be in its manifesto, Miliband said. Albeit now with less money attached.