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| Rachel Reeves waters down Labour £28bn green projects pledge | Rachel Reeves waters down Labour £28bn green projects pledge |
| (about 1 hour later) | |
| Rachel Reeves says Labour will now "ramp up" its plan to spend £28bn a year on green industries | Rachel Reeves says Labour will now "ramp up" its plan to spend £28bn a year on green industries |
| Rachel Reeves says Labour will now "ramp up" its plan to spend £28bn a year on green industries | Rachel Reeves says Labour will now "ramp up" its plan to spend £28bn a year on green industries |
| 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. | 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 spend £28bn a year until 2030 on green projects, funded by borrowing. | In 2021 Labour promised to spend £28bn a year until 2030 on green projects, funded by borrowing. |
| Instead shadow chancellor Rachel Reeves said she would now ramp up investment over time from a 2024 election win, reaching £28bn a year after 2027. | Instead shadow chancellor Rachel Reeves said she would now ramp up investment over time from a 2024 election win, reaching £28bn a year after 2027. |
| She told the BBC it was important not to be "reckless" with spending. | She told the BBC it was important not to be "reckless" with spending. |
| Speaking to Radio 4's Today programme, Ms Reeves said the Tories had "crashed the economy", adding that after prices and interest rates increased "financial stability has to come first". | Speaking to Radio 4's Today programme, Ms Reeves said the Tories had "crashed the economy", adding 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. |
| Analysis: Why has Labour U-turned on its green pledge? | |
| Labour unveils Biden-inspired economic strategy | Labour unveils Biden-inspired economic strategy |
| Labour plans publicly owned renewable energy giant | Labour plans publicly owned renewable energy giant |
| "The truth is I didn't foresee what the Conservatives would do to our economy," Ms Reeves said. | "The truth is I didn't foresee what the Conservatives would do to our economy," Ms Reeves said. |
| "We will get to the investment that is needed. But we've got to do that in a responsible way." | "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. | 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. | 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. |
| Since then the economic picture has changed considerably, with interest rates and borrowing costs soaring. | Since then the economic picture has changed considerably, with interest rates and borrowing costs soaring. |
| Labour wants to be seen as economically credible and privately there had been concerns raised about whether the £28bn of investment was affordable in the current context. | Labour wants to be seen as economically credible and privately there had been concerns raised about whether the £28bn of investment was affordable in the current context. |
| There have also been complaints about how the policy has landed, with some worried the £28bn figure was better known than what the money would be spent on. | |
| The Conservatives have also used the alleged dangers of the policy - that extra borrowing could increase interest rates and mortgage costs - as an attack line. | |
| However, the change in tack could make it more difficult to deliver Labour's aim of generating all electricity without using fossil fuels by 2030. | |
| Conservative Party chairman Greg Hands said Labour's main economic policy was "in tatters" after they realised "it would lead to disaster". | |
| "It doesn't matter if they try and pretend otherwise, Labour's plan remains to stick £28bn of borrowing on the government credit card which will lead to higher inflation and higher interest rates," he said. | |
| The SNP's Westminster leader Stephen Flynn said the move was "the latest in a long line of broken promises" from Labour, which "could have very real and damaging consequences for Scotland's green energy potential". | The SNP's Westminster leader Stephen Flynn said the move was "the latest in a long line of broken promises" from Labour, which "could have very real and damaging consequences for Scotland's green energy potential". |
| Green Party co-leader Adrian Ramsay said Labour had offered a policy which "does not go far enough" and then "row[ing] back at the first sign of any difficulty". | Green Party co-leader Adrian Ramsay said Labour had offered a policy which "does not go far enough" and then "row[ing] back at the first sign of any difficulty". |
| Rachel Reeves toured the New York Stock Exchange on a three-day visit to the US last month | Rachel Reeves toured the New York Stock Exchange on a three-day visit to the US last month |
| Ms Reeves was also critical of the deal Prime Minister Rishi Sunak secured with the US on his visit to Washington this week. | Ms Reeves was also critical of the deal Prime Minister Rishi Sunak secured with the US on his visit to Washington this week. |
| Plans for a full free trade agreement have been abandoned but the new proposals include allowing UK electric car firms access to US green tax credits and subsidies. | Plans for a full free trade agreement have been abandoned but the new proposals include allowing UK electric car firms access to US green tax credits and subsidies. |
| Ms Reeves, who visited the US herself last month, said she was "staggered" that Mr Sunak had returned with "no industrial plan for Britain". | Ms Reeves, who visited the US herself last month, said she was "staggered" that Mr Sunak had returned with "no industrial plan for Britain". |
| She has said Labour is taking inspiration from US President Joe Biden's plan to tackle inflation and create jobs, which includes a huge package of subsidies and tax breaks for green industries. | She has said Labour is taking inspiration from US President Joe Biden's plan to tackle inflation and create jobs, which includes a huge package of subsidies and tax breaks for green industries. |
| But she said her "secureonomics" strategy would be "built on the rock of financial stability and economic security", with strict limits on borrowing. | But she said her "secureonomics" strategy would be "built on the rock of financial stability and economic security", with strict limits on borrowing. |
| Labour has also promised to create a publicly owned renewable energy company to create jobs and improve the country's energy security. | Labour has also promised to create a publicly owned renewable energy company to create jobs and improve the country's energy security. |
| Last week the party pledged to ban new licences for oil and gas production in the UK, despite concerns from unions this could cost jobs. | Last week the party pledged to ban new licences for oil and gas production in the UK, despite concerns from unions this could cost jobs. |
| Related Topics | Related Topics |
| Rachel Reeves | Rachel Reeves |
| Environment | Environment |
| Labour Party | Labour Party |