Labour has watered down its multi-billion-pound “green prosperity plan,” saying it will prioritise “financial stability” if it wins the next general election.
The opposition party had promised in 2021 to invest £28 billion a year until 2030 in green projects if it came to power.
The plan, billed as the party’s answer to U.S. President Joe Biden’s Inflation Reduction Act, included pledges to invest more in projects such as wind and carbon capture.
But shadow chancellor Rachel Reeves said on Friday that Labour could not commit to the spending pledges until the financial situation it would inherit becomes clearer.
Inflation Fears
The shadow chancellor said it would be crucial to show “responsibility” with borrowing after the Conservative government had “crashed” the economy, leading to soaring interest rates and high inflation.Reeves refused to say how much investment in the plan there would be in the first year of a future Labour government, saying: “I will never be reckless with the public finances. Economic stability, financial stability, always has to come first and it will do with Labour.
“That’s why it’s important to ramp up and phase up our plans to get to the investment we need to secure these jobs so that it is also consistent with those fiscal rules to get debt down as a share of GDP and to balance day-to-day spending.”
Reeves insisted that Ed Miliband, the shadow net zero secretary, was “on the same page” as her.
The Conservative Party said Labour is backtracking because it has realised the policy would lead to “disaster.”
Conservative Party chairman Greg Hands said: “Keir Starmer’s main economic policy is in tatters, after even he and Rachel Reeves realised it would lead to disaster.”
Hands stressed that Labour’s ultimate goal remained to reach the £28 billion figure.
Net Zero ‘Cliff Edge’
Labour’s plan to speed up Britain’s transition to “net zero” has met with criticism even among trade unions—the party’s most important backers.Two major trade unions have expressed concerns after media reports suggested that Labour would promise to halt new oil and gas production in the North Sea in its net zero energy policy, to be announced later this month.
Gary Smith, general secretary of the GMB union, said on Sunday that Labour’s policies are “naive” and will “create a cliff edge with oil and gas extraction from the North Sea.”
He said that the sector had been promised “tens of thousands of jobs” in renewable energy “time and time again” but they “simply have not emerged.”
“When it comes to jobs, we can’t have jam tomorrow,” she said.
“I think we have a once-in-a-generation opportunity now to seize the jobs of the future,” he told broadcasters.
“Oil and gas will be part of that, because where there are existing licences they will go on to the 2050s and so oil and gas will be part of our energy mix for many, many years to come.”
