Sir Keir Starmer and Rachel Reeves, who was forced to scrap green plans in June Photo: Stefan Rousseau/PA
Sir Keir Starmer reviews the possibility of further watering down Labour's £28 billion green loan pledge as the party seeks to prove to the public it can be trusted with the economy.
Labour party leader's aides have called on Rachel Reeves, the shadow chancellor, to cut the green prosperity fund , which will see Labor borrow billions of dollars a year to invest in green jobs and industries as part of its push for economic growth.
But in June she was forced to scale back plans, saying that rather than taking office at the start of Labour's first term, politics would “accelerate” towards the middle of the first Parliament.
Now a party source has said that There is growing pressure from Sir Keir's office to go further to reduce the cost and impact of the scheme.
Another source said it was more important to adhere to Labour's budget rule that debt should fall as a share of national income in five years. “The fiscal rule is more important and will determine the size of the green prosperity fund,” the source added.
It comes after Jeremy Hunt's autumn statement predicted that many key government services would face with real cuts after the next election, which will leave Ms Reeves with difficult choices.
The Conservatives said the fund was a key dividing line in the next election, proving Labor could not be trusted with the economy. They called it a “debt bomb” and Rishi Sunak raised the issue frequently at Prime Minister's Questions.
Some members of the shadow cabinet are understood to have raised concerns about the green wealth fund, believing Labor has not done enough to articulate what it will do with the money. Earlier this month, one said: “My worry is that we'll get all the downsides without any of the benefits.”
Critics say Labor hasn't said enough about how the money will be spent, and Not enough thought has yet been given to how to sell the plan to the electorate.
The party has pledged to spend £28 billion a year on green investment until 2030, starting in the first year of coming to power. In June, Ms Reeves said she had decided to cut the green wealth fund due to the poor state of the economy.
She announced her decision on BBC Radio 4's Today programme, saying Labor would do it. “increase” the annual target of £28 billion by the middle of the first Parliament. However, she said she could not have predicted the market crash caused by Liz Truss' plans for unsecured borrowing to cut taxes last fall.
“No plan can be built unless it is a rock of economic and fiscal responsibility, ” she added. “I will never play fast and loose with the public finances.”
The shadow chancellor said she was “on the same page” with Keir and Ed Miliband, the shadow energy secretary, on the need for cuts spending.ambition of the plan.
Mr Miliband said the delay was partly a matter of practicality as it could take some time to prepare supply chains for the £28 billion spend. He added that the party was “on 100 percent does not give up on our plan.”
Recent Comments