Rachel Reeves backs out of Labor’s £28bn environmental investment pledge
Rachel Reeves has rejected Labour’s flagship plan to spend £28 billion a year on new green jobs and technology.
The shadow chancellor said this morning that the party would “step up” spending to that figure every year as she blamed the new post on the country’s finances and the Conservatives, who she said had “broken our economy”.
Asked how much the Labor government will now spend under its eco-prosperity plan in its first year in power, Ms Reeves told the BBC: “As we get closer to the election, we’ll be putting out all our figures that match this fiscal rule. .”
Ms Reeves said the £28bn figure previously set by Labor would be a target to work towards, rather than the amount allocated initially.
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The figure was outlined as investment to fund a range of green industries and other schemes such as insulating homes.
When the pledge was first made in 2021, Rachel Reeves promised to be the “first Green Chancellor”.
Earlier this week, Sir Keir Starmer wanted to face down domestic critics of the green energy plan, insisting that the £28bn green energy investment plans would deliver economic growth.
The Labor leader, speaking at the GMB trade union conference on Tuesday, said he remained committed to Labour’s “green prosperity plan”.
He said: “Our Green Prosperity Plan, like President Biden’s Deflation Act, is our plan for growth, and because we’re Labor, it’s also a plan for working people, their jobs and their prosperity.”
But the new post came after days of internal and external criticism.
Gary Smith, general secretary of the GMB, described Labour’s oil and gas policy as “naive” and lacking in “intellectual rigour”.
His criticism was joined by Unite general secretary Sharon Graham, who said Labor must “make it very clear that they will not let workers pay the price” for the switch to renewable energy.
The Conservatives said Labor had “handed its energy policy over to its funders Just Stop Oil” – a reference to the £1.5m the party received from donor Dale Vince.
It comes as Labor also suggested it would cut tax on oil and gas windfalls.
Asked by Sky News this morning, Stephen Kinnock, the shadow immigration secretary, said the windfall tax was introduced primarily because of pressure from Labour, but accused ministers of leaving “loopholes” which allowed some companies to “offset some of their windfall.” tax against investment’.
He said Labor would close it so the tax “generates its full potential”.
However, he also somewhat welcomed the move, saying: “The windfall tax is by definition a one-off. It’s not a built-in, structural, permanent tax – it’s about taxing what is effectively war profit.’
Mr Kinnock said it was “right that there is a strategy to stop paying tax when the time comes because it should only be based on windfall profits”.
He added that the goal should be to “wean ourselves off oil and gas” and invest in renewable energy. But he noted that fossil fuels will be “an important part of the mix” by the 2050s.
