Keir Starmer was facing a credibility crisis last night after ditching the central plank of his economic policy.
Just 48 hours after saying it was desperately needed, he confirmed the commitment to splash out £28billion a year on green projects had been ‘stood down’.
The policy flip-flop triggered a backlash, with Labour MPs warning it would leave voters asking ‘what, if anything, our party stands for’.
Sir Keir had said on Tuesday that the policy was ‘desperately needed’ to help decarbonise the UK’s energy supplies by 2030, five years earlier than planned.
A shadow cabinet source said he had lost a ‘battle of wills’ with his shadow chancellor Rachel Reeves, who has been pushing to ditch the policy for months.
The Labour Leader Sir Keir Starmer. Just 48 hours after saying it was desperately needed, he confirmed the commitment to splash out £28billion a year on green projects had been ‘stood down’
Levelling Up Secretary Michael Gove. Mr Gove branded the Labour leader the ‘jellyfish of politics’, claiming he was ‘transparent, spineless and swept along by the tide’
Sir Keir during a visit to the Hamiltonhill Claypits Local Nature Reserve in Glasgow
Sir Keir insisted last night the pair were ‘in lockstep’ in agreeing that the pledge had to be dramatically scaled back.
Lord Blunkett, a former Labour minister, said it was better to axe the policy now than ‘let people down in government’.
But he told BBC Radio 4’s PM programme: ‘The optics, the PR, the timing could not have been worse, and I hope lessons have been learned.’
Sir Keir said Labour would now spend less than £5billion a year extra on tackling climate change. The reliance on state borrowing will be cut back, with the policy now part-funded by an extended windfall tax on North Sea oil and gas, which the party had planned to use to freeze council tax. The party’s Warm Homes Plan, a £6billion package of measures to improve energy efficiency, is set to be one of the casualties, with funding slashed to just £1.3billion a year.
The decision raises serious doubts about Labour’s commitment to tackling climate change – and leaves a gaping hole in its plans for economic growth.
Shadow Chancellor of the Exchequer Rachel Reeves at Labour’s Party Conference in Liverpool in October 2023. Ms Reeves has been pushing to ditch the green policy for months
Sir Keir claimed his dramatic U-turn was necessary because the Conservatives had ‘crashed the economy’. He insisted Labour could still achieve its green goals, but acknowledged it would ‘challenging’.
He said: ‘We will not reach the £28billion – the £28billion therefore is stood down and we focus on the outcomes.’
The Labour leader said it was ‘plain common sense’ to cut back spending commitments after soaring interest rates sent the cost of the project through the roof.
But Rishi Sunak described Sir Keir’s decision to drop his biggest policy pledge as a ‘serious moment’ and claimed ‘uncertainty about what a Labour government would do is a real risk to our country’s future’.
On a visit to Cornwall, the Prime Minister said: ‘It demonstrates exactly what I’ve been saying, that he U-turns on major things, he can’t say what he would do differently because he doesn’t have a plan.’
Levelling Up Secretary Michael Gove branded the Labour leader the ‘jellyfish of politics’, claiming he was ‘transparent, spineless and swept along by the tide’.
Labour’s former climate chief Barry Gardiner branded the decision ‘economically illiterate and environmentally irresponsible’. He said the U-turn heightened concerns that Labour’s election manifesto will be ‘so bland’ the public will conclude the party ‘stands for nothing’.
Fellow Labour MP Mick Whitley said: ‘The dumping of the Green Prosperity Plan casts major doubt on whether Labour can provide the leadership to meet the challenges of a fast-warming world. This latest U-turn will leave many voters asking what, if anything, our party stands for.’
John McTernan, a former adviser to Tony Blair, described it as ‘probably the most stupid decision the Labour Party’s made’.
He added: ‘Great parties have great causes. If we don’t have a great cause, you want a change from this government, sure, but change to what? What is the change that Labour now offers? It’s very disappointing.’
The Unite union, which is Labour’s biggest donor, also condemned the move. General secretary Sharon Graham said: ‘The retreat from Labour’s £28billion green investment pledge will confirm workers’ scepticism of the endless promises of