Labour denies abandoning £28bn green pledge

Labour’s shadow chancellor Rachel Reeves previously said she would invest in "good jobs in the green industries of the future"

Labour has denied claims it could further water down its flagship green prosperity plan.

A senior source had suggested to the BBC that the level of investment previously promised - of £28bn a year - might never be reached.

But a party spokesman said, if elected, Labour would "ramp up investment in jobs and energy independence" to a "total of £28bn a year as planned" in the second half of their Parliamentary term.

Labour announced the policy in 2021.

It originally promised to spend £28bn a year until 2030 on the flagship green project, funded by borrowing.

However, in June shadow chancellor Rachel Reeves watered the pledge down, saying the party would invest over time from a 2024 election win, reaching £28bn a year after 2027.

A senior source in the Labour leader's office said that was because of the state of the public finances. They stressed that Labour's fiscal rules were more important than any policy.

The Conservatives have previously warned of the alleged dangers of the policy - claiming extra borrowing could increase interest rates and mortgage costs.

• Why has Labour U-turned on its green investment pledge?

• Rachel Reeves unveils Labour's Joe Biden-inspired economic strategy

• Labour plans publicly owned renewable energy giant

During the Labour party conference in Brighton two years ago, Ms Reeves announced her ambition to be the UK's first "green" chancellor.

She unveiled Labour's Green Prosperity Plan, explaining money would go on offshore wind farms, planting trees and developing batteries. She added it would be funded by borrowing.

But in June Ms Reeves said she took the decision to scale back the Green Prosperity Plan as a result of the poor state of the economy.

"No plan can be built that is not a rock of economic and fiscal responsibility," Ms Reeves told BBC Radio 4's Today programme at the time.

She added: "I will never play fast and loose with the public finances."

The party's fiscal rules - which include a promise to get debt falling within five years - are viewed as the "North Star"; more important than any policy, according to the senior Labour source who spoke to the BBC.

Labour sources also denied a report in the Daily Telegraph, that Sir Keir Starmer had asked for the funding pledge to be watered down.

Labour is determined to paint itself as the party of economic credibility - even if it means tempering one of the central planks of its programme for government.

Hannah Martin, co-director of campaign group Green New Deal Rising, said a Labour u-turn on the Green Prosperity Plan would be "a disaster".

She said Labour "should be going much further" and commit to a range of measures including guaranteeing millions of green jobs, a wealth tax and a home insulation programme.

"Failing to commit even to the basics of investing in our planet and economy would be a huge betrayal - and our generation won't let them forget it," she said.

A Conservative Party spokesman said Labour's policy "presents a major risk" to the British economy at a time when the cost of borrowing is "so high"