Starmer abandons £28bn green pledge

Analysis suggests cost to improve millions of homes would be vastly more than originally claimed by party

SIR KEIR STARMER is set to formally abandon his £28 billion green investment pledge today, arguing that Labour can no longer promise to borrow that amount a year.

The Labour leader will still say the party is committed to borrowing to invest but he no longer stands by the figure of £28bn as the ambition, according to a senior Labour source. The move comes after months of attacks from the Conservatives about the policy, which was first unveiled back in the autumn of 2021.

It is an attempt to finally give clarity over a position that has been repeatedly watered down and on which, in recent weeks, shadow cabinet ministers have voiced differing stances.

Sir Keir is likely to blame the move on economic woes seen in recent years under Tory rule and what Labour has claimed is the Conservatives’ “scorched earth” approach to finances that will leave them limited manoeuvrability after the election.

The Tories are likely now to turn their fire on the promises underpinned by the £28 billion plan.

Rishi Sunak, the Prime Minister, and his senior colleagues have been airing the argument this year that Labour does not have a credible plan for government and that more borrowing will mean more tax rises. In a Tory advertising campaign on the economy released yesterday, Mr Sunak explicitly made reference to Labour’s £28bn pledge and argued it would lead to higher taxes.

The decision by Sir Keir, first reported in The Guardian, reflects how he and Rachel Reeves, the shadow chancellor, have put at the heart of their re-election pitch the message that Labour can be trusted with the public finances.

Tory aides planning the next election who have relentlessly gone after the £28 billion promise will be heartened. Yesterday, they launched a related attack – using Treasury analysis to claim Labour plans to improve energy efficiency in the next decade would cost not £6 billion but £13 billion.

LABOUR’S plan to improve energy efficiency across millions of homes would cost more than double the amount the party has claimed, an analysis by Treasury officials has found.

The party has said its green measures would cost the Exchequer a maximum of £6 billion a year while bringing down the cost of bills for households across the country.

But the Government’s five-page analysis claims it would actually cost from £12 billion to £13 billion a year.

The calculation was immediately dismissed by Labour, which said the analysis did not take into account the fact that some of the costs would be paid by consumers and landlords – not the Treasury.

A party spokesman said: “This costing is ludicrous and uses bogus assumptions. They have costed someone else’s policy, not Labour’s.”

Rishi Sunak attacked Sir Keir Starmer, the Labour leader, over the policy at Prime Minister’s Questions.

The 10-year costing was produced by civil servants in the Department for Energy Security and Net Zero and published by the Treasury.

It said what it called the £13 billion “black hole” was equivalent to a 2p rise in income tax.

Labour’s policy is to spend £6 billion a year on grants to upgrade 19 million homes that have an Energy Performance Certificate rating below C.

However, the analysis by Treasury officials said there were 13.1 million homes with a rating below C, and the cost of upgrading them would be £7 billion more than Labour’s estimates.

Jeremy Hunt, the Chancellor, said: “This official costing shows that a key plank of Labour’s policy costs double what they have claimed.

“But given it was all coming out of a £28 billion a year spending splurge which is cancelled one day and then reinstated the next, the overall picture is an opposition party in a general election year that simply does not have an economic plan.

“And when you have an explicit spending commitment without a plan to pay for it, it can only mean one thing – higher taxes.”

However, the Energy and Climate Intelligence Unit (ECIU) said the analysis was not robust because it assumed the whole cost of home insulation would be met by the Exchequer.

It said that restoring the Minimum Energy Efficiency Standards for the private rented sector, which the Prime

Minister scrapped in September, would not cost the Treasury anything as costs would fall upon landlords.

There were about 4.5 million privately rented homes in the UK in 2022.

On top of this, the ECIU said that some existing insulation schemes such as the Energy Company Obligation and Great British Insulation Scheme are f unded by energy suppliers and recouped by a levy on bills – again not funded by the Treasury.

Jess Ralston, energy analyst at the ECIU, said: “These appear to be politically motivated figures, rather than a proper assessment.

“They deflect from the failure of the Government to get homes insulated which has left the most vulnerable choosing between eating and heating during the gas price crisis. Sky-high bills and a multi-billion pound taxpayer bailout are the price for this lack of investment from the Government.

“Anyone arguing against investment in insulation is calling for higher bills, less e nergy i ndependence a nd unhealthy homes. Cold, damp homes damage people’s health and cost the NHS billions of pounds every year.”

Catherine Haddon, from the Institute for Government think tank, said: “Costing opposition policies has happened since at least the 1950s. It’s very much a political tool.

“The Treasury only do the calculations based on assumptions about the policy which have to be given to them by ministers or special advisers. It’s a long-standing convention.”

Lord Macpherson, the former Treasury permanent secretary, said such costings should be ignored. “Over the next nine months, we will have to [tolerate] many an ‘official Treasury’ costing of Opposition policy,”he said.

“Since time immemorial, whatever the party in power, these costings have had little if any credibility. Political advisers determine the assumptions.”

‘This costing is ludicrous. They have costed someone else’s policy, not Labour’s. ‘In a general election year, the opposition party does not have an economic plan’