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| Labour waters down £28bn green investment pledge | |
| (32 minutes later) | |
| Labour has rowed back on its pledge to invest £28bn a year in green industries if it wins power, saying it needs to be "responsible" with the public finances. | |
| In 2021 Labour promised to invest £28bn a year until 2030 in green projects. | In 2021 Labour promised to invest £28bn a year until 2030 in green projects. |
| Instead shadow chancellor Rachel Reeves said she would now ramp up investment over time from a 2024 election win, reaching £28bn a year by 2027. | |
| She told the BBC that after the Tories "crashed the economy" it was important not to be "reckless" with spending. | She told the BBC that after the Tories "crashed the economy" it was important not to be "reckless" with spending. |
| Ms Reeves added that after prices and interest rates increased "financial stability has to come first". | Ms Reeves added that after prices and interest rates increased "financial stability has to come first". |
| Factors including the war in Ukraine have seen inflation soar and the Bank of England has increased interest rates, making borrowing more expensive, in an attempt to tame rising prices. | Factors including the war in Ukraine have seen inflation soar and the Bank of England has increased interest rates, making borrowing more expensive, in an attempt to tame rising prices. |
| Former PM Liz Truss's mini-budget last year, which included billions of pounds of unfunded tax cuts, also prompted turmoil in the financial markets and led to interest rates rising further. | Former PM Liz Truss's mini-budget last year, which included billions of pounds of unfunded tax cuts, also prompted turmoil in the financial markets and led to interest rates rising further. |
| Labour unveils Biden-inspired economic strategy | |
| Labour plans publicly owned renewable energy giant | |
| "The truth is I didn't foresee what the Conservatives would do to our economy," Ms Reeves told BBC Radio 4's Today programme. | |
| "We will get to the investment that is needed. But we've got to do that in a responsible way." | |
| However, pressed on how much investment there would be in the first year of a Labour government, Ms Reeves would not commit to a figure, arguing the economic backdrop would not be clear until closer to the time. | |
| Announcing the party's Green Prosperity Plan in 2021, Ms Reeves said the £28bn would come from borrowing and would be spent on projects like offshore wind farms and developing batteries for electric vehicles. | |
| A senior Conservative source told the BBC that it wasn't surprising Labour had watered down its pledge. | |
| "The pledge was made when interest rates were at rock bottom," they said. | |
| "To borrow £28bn each and every year for a decade would fuel inflation, and force [the Bank of England] to raise interest rates even further. It's the height of irresponsibility." | |
| The source added there were "still issues with the pledge" and "a lot of deadweight cost where the private sector would've invested anyway". | |
| Related Topics | Related Topics |
| Rachel Reeves | Rachel Reeves |
| Environment | Environment |
| Labour Party | Labour Party |