Sir Keir Starmer is set to abandon Labour’s policy to spend £28bn a year on environmental projects in a major U-turn by the party.
The party leader is expected to confirm on Thursday that the pledge is being scaled back due to changes in the economic landscape since it was first unveiled in 2021.
It comes just days after Sir Keir said £28bn of annual investment in green initiatives was “desperately needed” and that his support for the spending plan was “unwavering”. Labour sources said the party will instead focus on previously-announced plans to get Britain off fossil fuels.
But Sir Keir faced an immediate backlash, with former shadow minister Barry Gardiner calling the decision “economically illiterate, environmentally irresponsible and politically jejune”.
Former adviser to Tony Blair John McTernan said it is “probably the most stupid decision the Labour Party’s made”.
And Jeremy Hunt said Labour’s only economic plan is to copy the Conservatives”. The chancellor said: “If their policies flipflop like this in opposition, what sort of chaos would the British people have to endure if they got into power?”
Last year, Labour adjusted its original plan by saying the £28 billion-a-year spending target would likely be met in the second half of a first parliament, rather than immediately, if the party wins the next election.
The party has since insisted the pledge is subject to its fiscal rules, which include getting debt falling as a percentage of GDP, as it seeks to reassure voters it would handle the economy responsibly in government.
Confusion over the future of the policy has grown in recent weeks as some senior figures refused to refer to the £28 billion-a-year figure, while party leader Sir Keir continued to do so as recently as Tuesday.
Shadow chancellor Rachel Reeves has repeatedly declined to recommit to the spending pledge, instead highlighting the need for “iron discipline” with the public finances.
But earlier this week, Sir Keir said the money was “desperately needed” for the party’s key mission to achieve clean power by 2030.
The Conservatives have also seized on the figure as a key attack line in the run-up to an election this year, claiming Labour would ultimately have to raise taxes to meet the “unfunded spending spree”.
Labour has pointed to recent economic turmoil under the Tories, including the turbulence caused by Liz Truss’ mini-budget in 2022, when accused of watering down its flagship environmental pledge.
It was first announced in September 2021 by Ms Reeves, who at the time committed to spending an extra £28 billion each year to help Britain tackle climate change if the party wins power.
Mr Gardiner, now a member of Parliament’s environment committee, told BBC Radio 4’s Today programme that Britain needed to follow Joe Biden, whose inflation reduction act inspired the spending pledge.
John McTernan said the decision was ‘very disappointing’
He said Sir Keir’s u-turn was “environmentally irresponsible” at a time when climate change is leading to increasingly destructive natural disasters.
And Mr Gardiner warned Labour now risked “being so bland that you stand for nothing”. “The government will then write your policies for you, and will say, “you see Labour’s not telling you what they what they’re going to do. It’s going to be this it’s going to be that”.
“They can paint their own picture, so I think politically, it’s strategically incompetent.”
Mr McTernan, Sir Tony’s former political secretary, said Labour needed to stick to the pledge. “The transition we have to make now is to decarbonise our economy, and it is one which stands for a great purpose, a grand purpose.
Barry Gardiner said the decision was ‘economically illiterate, environmentally irresponsible and politically jejune’
