How Labour ditched its flagship £28bn green investment pledge

Labour’s pledge to spend £28bn a year on green investment is to be ditched, two and a half years after it was announced to cheering party members as an eye-catching flagship policy.

It has been at the centre of a public and private struggle since it was announced, with factions inside Labour arguing against moves to water it down.

The decision on Thursday is to be defended on the basis of uncertainty about public finances as Labour moves to finalise its election manifesto. Nevertheless, voices from different sections of the party and from business are mourning a failure of ambition.

Following 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.

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

Keir 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 fronbencher Sir 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”.