On the day when we find out global warming has exceeded 1.5°C across an entire year, Labour has decided to drop what it branded its “Green Prosperity Plan”, a £28bn proposal that aimed to tackle climate change, reduce energy bills, create jobs and drive economic growth.
There are two types of politicians according to the late Labour grandee Tony Benn: signposts and weather vanes. Keir Starmer and Rachel Reeves have today proved that they are weather vanes – blowing with the wind and buffeted by events.
The dumping of Labour’s £28n “Green Prosperity Plan” marks more than just another U-turn or capitulation from Starmer’s Labour. It marks the death knell in Labour’s economic and environmental credibility, and destroys any remaining shreds of Starmer’s political integrity.
The policy was launched to great fanfare at the Labour Party conference in 2021. Shadow Climate Change Secretary Ed Miliband set out the moral case and policies, while shadow Chancellor Rachel Reeves put forward the economic argument, pledging an “additional £28bn of capital investment in our country’s green transition for each and every year of this decade”.
This was personal to Reeves: “I don’t want my children to grow up in a country… which fails to rise to the challenge of the climate crisis”, she told conference, pledging to be Britain’s first “green chancellor”. Last week signalled her shift – the aim now is to be, in her words, the “champion of a thriving financial services industry”.
When Starmer announced his “mission” for the UK to achieve the highest sustained growth in the G7, the cornerstone was still “a Green Prosperity Plan that will provide the catalytic investment needed to become a clean energy superpower”. And at Labour conference in September, Starmer again assured the audience that he would “speed ahead” with green investment, lambasting the Prime Minister for rowing back on his commitments.
But even before today’s denouement, the policy had been repeatedly downgraded. The £28bn is no longer additional money (it includes whatever Labour deems is the existing green investment), it’s been delayed (so not “each and every year”), made conditional on Labour’s arbitrary fiscal rules and reduced to an ambition rather than a pledge.
Keir Starmer seems to believe he can will the ends without delivering the means to achieve it. Clean energy by 2030 was a huge gambit – an ambitious policy when I oversaw it as part of Labour’s 2019 manifesto.
But since then the Conservatives have utterly failed on climate transition. In 2020, Boris Johnson’s energy minister left the government saying saying “we are miles off track” in meeting climate targets. And just last year, the Committee on Climate Change (chaired by Thatcher-era minister Lord Deben) said government progress was “worrying slow” and that the cause was a “lack of urgency” and a “worrying hesitancy” by ministers across government. This affliction has now spread to the opposition, too.
Starmer’s defenders argue that the economic climate has changed since 2021. The damage done by Liz Truss shows you can’t borrow large sums without spooking the markets, and the rise in interest rates in the last two years shows that the economic climate has changed. Both these arguments are – to put it mildly – bunkum. Truss promised massive unfunded tax cuts which would neither create jobs nor growth. Productive investments do both.
As well as the environmental case becoming more urgent, the case for greater domestic energy security has intensified following Russia’s invasion of Ukraine, growing instability in the Middle East, and disruption in the Red Sea.
But the economic case remains strong, too. Sharon Graham, general secretary of the UK’s largest private sector union Unite, was sharply critical of Labour’s retreat: “The Labour movement has to stand up to the Conservatives’ false accusations of fiscal irresponsibility. There is a catastrophic crisis of investment in Britain’s economic infrastructure. Britain needs more not less investment.”
She has an ally in the Institute of Fiscal Studies, which last week rightly pointed out that “public sector net investment is currently set to fall as a share of GDP over the next parliament” and that “increasing productive investment in the UK would likely boost long-term growth prospects”.
The UK lags behind the rest of the world in both public and private investment, which is a key driver of growth. Further reduce that and it’s hard to see how Keir Starmer’s mission of the highest sustained growth in the G7 can be achieved.
Watering down their green investment plans shows Labour’s economic illiteracy. Instead of showing they’re the party of sound money, this move today exposes that Labour has no plan to grow the economy, and no plan to decarbonise it either. When it comes to climate change the costs of inaction are much greater than the costs of action.
Labour’s failure has been three years in the making. Having announced a headline figure, the party has failed to make a strong argument for what that investment would deliver: warmer homes, cheaper bills, better jobs and higher growth. By dumping the plan it means we all will be paying higher bills for longer, and Labour now has no model for growth in an economy that has stagnated for 15 years. Labour has today lost its economic and environment credibility.
Andrew Fisher is the former director of policy for the Labour Party
Labour has managed to lose both its economic and environmental credibility
10
1
08.02.2024
On the day when we find out global warming has exceeded 1.5°C across an entire year, Labour has decided to drop what it branded its “Green Prosperity Plan”, a £28bn proposal that aimed to tackle climate change, reduce energy bills, create jobs and drive economic growth.
There are two types of politicians according to the late Labour grandee Tony Benn: signposts and weather vanes. Keir Starmer and Rachel Reeves have today proved that they are weather vanes – blowing with the wind and buffeted by events.
The dumping of Labour’s £28n “Green Prosperity Plan” marks more than just another U-turn or capitulation from Starmer’s Labour. It marks the death knell in Labour’s economic and environmental credibility, and destroys any remaining shreds of Starmer’s political integrity.
The policy was launched to great fanfare at the Labour Party conference in 2021. Shadow Climate Change Secretary Ed Miliband set out the moral case and policies, while shadow Chancellor Rachel Reeves put forward the economic argument, pledging an “additional £28bn of capital investment in our country’s green transition for each and every year of this decade”.
This was personal to Reeves: “I don’t want my children to grow up in a country… which fails to rise to the challenge of the climate crisis”, she told conference, pledging to be Britain’s first........
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