Keir Starmer defends Labor’s U-turn on £28bn green spending

Sir Keir Starmer has insisted he has no choice but to scrap Labour’s £28bn annual green investment pledge.

He defended the U-turn by arguing that the Conservatives had ruined the economy and it was no longer affordable.

He also told the BBC that Labor would still spend more money on green projects than the Conservatives if it won the election, saying it would commit to “clean power by 2030”.

But Chancellor Rishi Sunak said Labour’s flagship economic policy was “in tatters”.

“This is what happens when you don’t have a plan. You can’t bring about change in a country without a plan.”

He added that the Labor leader “has a track record of U-turns on key issues”.

Labour’s announcement means it will significantly scale back its investment plans for green industries if it wins government, with around £4.7bn a year more to be invested.

Mr Sunak said the necessary borrowing would force Labor to raise taxes, following weeks of confusion over the policy and coming under increasing attack from the Conservatives ahead of the election.

The Labor leader said all the green plans his party had previously announced would be retained, including funding for battery factories and “clean steel” production.

However, subsidies and loans to help families insulate their homes will be reduced in the future.

The investment plan would also be partly funded by taxes on energy companies’ profits, rather than by increased government borrowing.

The £28bn spending pledge first announced for 2021 had already been significantly watered down by Labor.

In June last year, Shadow Chancellor of the Exchequer Rachel Reeves announced that spending targets would only be met from 2027 onwards, rather than from the first year of a Labor government.

The party has since included a government spending plan of around £10bn a year in its figures, taking the Conservative Party’s pledge for additional spending to around £18bn a year.

The party has now confirmed that the total additional investment compared to the government’s plan will be around £4.7bn a year.

He also said his party, if it won power, would partially fund it by maintaining a higher “windfall” tax on energy companies’ profits throughout the government’s first term.

The party now says it hopes this will raise £10.8bn over five years to fund the scheme and reduce its reliance on borrowing.

Sir Keir said in an interview with the BBC that the change in spending plans was “perfectly sensible”, adding that it would be “irresponsible” to ignore the economic situation.

He added: “We cannot ignore the fact that the Conservative Party has caused huge damage to the economy.”

Labor has argued that the cuts are necessary to comply with party spending rules that require debt to fall as a proportion of the size of the economy over five years.

Shadow Chancellor Rachel Reeves said in an interview with the BBC that the Conservative Party would leave behind a “dark legacy” and said she would “make no apologies” for ensuring Labour’s plans were “fully funded”. Ta.

But the move to scrap spending pledges was criticized by Momentum and Unite, the left-wing campaign group that is Labour’s biggest trade union supporter.

A Momentum spokesperson said: “Starmer’s latest U-turn represents a further capitulation to the right-wing forces.”

Unionist leader Sharon Graham said: “The Labor movement must stand up to the Tories’ false accusations of fiscal irresponsibility.”

“This is a huge setback for the climate, the economy and quality jobs,” said Green Party co-leader Carla Denyer.

It is difficult to assess the consequences of Labor cutting back on green spending because it did not provide details of how all the money would be spent.

Plans for subsidies for families to improve home insulation will only cover 5 million homes over five years, rather than 19 million over 10 years, it has been confirmed.

The funding allocated for this will amount to £13.2 billion over five years, almost double the amount currently promised by the government but less than Labor had planned.

Unchanged commitments include £1.8bn for nine ‘renewables-enabled’ ports.

It also maintains commitments to spend £2bn on eight battery factories and £3bn on “clean” steel, figures that include expected government spending.

There also remains a pledge to spend £500m a year on grants to companies that create green jobs, but the party has specified that this will not start until 2026.

The party did not say how much it would spend on GB Energy, a publicly owned clean power generation company it is seeking to establish.

It has been confirmed that this will be an “initial” £8.3 billion over five years, including £3.3 billion for councils and community groups to become “owners of local power”.