Labour will ditch its policy of spending £28 billion a year on its green investment plan in a major U-turn.
The investment funds, first announced by shadow Chancellor Rachel Reeves in September 2021, would have been spent on projects like offshore wind farms and developing electric vehicles.
Though the official announcement is yet to be made, sources say that the party’s Green Prosperity Plan – which includes creating a publicly-owned green power company – will not be dropped altogether.
What is confirmed is that if Labour wins the next election, it will no longer commit to investing £28 billion a year in green energy projects.
There were signs that Labour were moving away from the policy in recent weeks, as some senior figures repeatedly refused to use the £28 billion figure in interviews, despite the party leader Sir Keir Starmer continuing to do so.
In an interview last month, Starmer described the £28 billion figure as “a confident ambition”, which was subject to the party’s fiscal rules, while the prime minister has repeatedly attacked him over the policy, suggesting it will lead to higher taxes.
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Ultimately, the decision has been taken to reassure voters they can be trusted with the economy, rather than keeping the £28 billion promise.
Left-wing campaign group Momentum and Unite, Labour’s biggest union backer, have criticised the move, saying it represents “yet another capitulation to right-wing interests”.
Labour MP and a former shadow environment secretary Barry Gardiner told the BBC’s Today programme: “It’s economically illiterate, it’s environmentally irresponsible and it’s politically jejune” and warned his party against becoming “so bland that you stand for nothing”.
Starmer had set a deadline of Thursday to finalise his party’s draft general election manifesto.
The U-turn comes on the same day that the EU’s climate change service announced that global warming has exceeded 1.5C across an entire year for the first time.