Labour’s pledge to spend £28bn a year on its flagship green economic policy is unlikely to ever be met because of the state of the public finances.
Labour’s “green prosperity plan” promised to pour the money into climate-friendly investments every year until 2030 if it wins the next election.
But it was already watered down by the shadow chancellor Rachel Reeves earlier this year – after she blamed that Tories for “crashing the economy”.
At the time she said she would always prioritise being economically responsible.
The plan, announced at the Labour conference two years ago, is designed to reap the benefits of a ‘net zero’ future.
Initially, Labour planned to spend £28billion a year from the moment it entered government.
Ms Reeves later amended that to say the party would “ramp up” to the figure by 2027.
Now there are major doubts at the top of party that that level of investment will ever be met, a source close to the Labour leader Keir Starmer told the BBC.
The party’s ‘rules’ for responsible management of the economy – which include a promise to get debt falling within five years – are seen as the “North Star”, more important than any individual policy.
The green promise, Labour’s biggest spending pledge, would require more than £100bn borrowing.
It has come under fire over fears that the scale of borrowing would drive up interest rates.
The chancellor Jeremy Hunt has accused Labour of planning to “fuel” inflation with the plans.
In June Ms Reeves insisted Labour would “ramp up” to the £28bn figure. “We will get to the £28bn – it will be in the second half of the first parliament. But we will get to that £28bn,” she told BBC Radio 4’s Today programme.
Friends of the Earth’s Jamie Peters, said rowing back on the pledge would be “deeply disappointing and damaging”
“Green investment is not only vital for tackling the climate emergency; it’s a huge economic opportunity too.. The UK could be a leader in the global race to be a zero-carbon economy, but we are currently trailing a long way behind the US and Europe. “
A Labour spokesperson denied separate reports that Sir Keir had asked for the £28bn pledge to be watered down again.
The spokesperson added: “Labour will ramp up investment in jobs and energy independence through our green prosperity plan to a total of £28bn a year as planned in the second half of the Parliament.”
