Labour backtracks on £28bn green plan

LABOUR has backtracked on its £28bn green prosperity plan, saying “economic stability” must come first if it wins the next election.

Shadow chancellor Rachel Reeves refused to commit to new spending figures until the financial situation the Opposition would inherit becomes clearer.

The party had promised in 2021 to invest £28bn a year until 2030 in green projects if it came to power.

But Ms Reeves said yesterday that figure would instead be a target to work towards in the second half of a first parliament, blaming the Tories for having “crashed our economy”.

The shadow chancellor said demonstrating “responsibility” with borrowing would be crucial amid soaring interest rates and high inflation.

Ms Reeves appeared to admit that the party’s green proposals risked spooking the markets as Liz Truss’ mini-budget did last year.

She would not say how much investment in the plan there would be in the first year of government but suggested details would be given following further fiscal updates from the Government.

“I will never be reckless with the public finances,” the shadow chancellor said.

“Economic stability, financial stability, always has to come first and it will do with Labour.

“That’s why it’s important to ramp up and phase up our plans to get to the investment we need to secure these jobs so that it is also consistent with those fiscal rules to get debt down as a share of GDP and to balance day-to-day spending.”

Ms Reeves insisted that Ed Miliband, the shadow net zero secretary who set out the multi-billion pound investment plan, was “on the same page” as her.

The Tories sought to stress Labour was simply delaying its ultimate goal of reaching the billion commitment, which they said would spell “disaster” for the economy.

Conservative Party chairman Greg Hands said: “Keir Starmer’s main economic policy is in tatters, after even he and Rachel Reeves realised it would lead to disaster.

“It doesn’t matter if they try and pretend otherwise, Labour’s plan remains to stick billion of borrowing on the Government credit card which will lead to higher inflation and higher interest rates.”

Labour’s flagship green prosperity plan, billed as the party’s answer to Joe Biden’s clean energy-promoting Inflation Reduction Act, included pledges to invest more in projects such as wind and carbon capture.