What will £28bn green investment U-turn cost Labour?

Keir Starmer is formally abandoning his party's £28 billion green investment pledge, arguing that Labour can no longer commit to borrow and spend such a large amount each year.

The party's flagship policy, which was unveiled in the autumn of 2021, had already been watered down repeatedly in recent months as the Conservatives blasted the plans. It now appears to have fallen victim to Labour's own fiscal rules, which will need to see the national debt falling as a percentage of GDP.

Breaking the news of Starmer's "biggest policy U-turn since becoming party leader", The Guardian said the decision followed "weeks of uncertainty about the policy as competing factions within Starmer's senior team pushed him to keep the pledge or ditch it".

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What did the commentators say?

Labour has been in a "public tangle and a private tussle" over the headline figure attached to what they call their Green Prosperity Plan, said the BBC's political editor Chris Mason. "Transparently, Labour was in a mess",  and  has "concluded the number, but not the policy itself, is an albatross around their neck – and so it is a goner".

By abandoning the £28 billion promise, Starmer is putting to rest what had become a "contentious topic" within his own party, said Kate Edwards in The Spectator. But "this is not your average U-turn".

Shadow energy secretary and former Labour leader Ed Miliband has been adamant the policy must form the centrepiece of Labour's manifesto, according to the i news site. And northern mayors Andy Burnham and Steve Rotheram both urged Labour to stick to the pledge in an interview with The New Statesman published today.

While some shadow ministers – most notably shadow chancellor Rachel Reeves – have argued the policy played into Tory attacks about Labour's fiscal credibility, others have warned that dropping it "will only accentuate the feeling among many voters that Starmer cannot be trusted to stick to his word", said The Guardian.

Labour's left are "unsurprisingly is getting stuck in", said Politico's London Playbook. One critic reportedly questioned "who's really in charge" after Starmer was "overruled" by Reeves. "Manchurian candidate is a compliment," the source added.

The U-turn has also ignited questions about what Labour is actually for. John McTernan, who was Tony Blair's political secretary in No. 10, was scathing on BBC's "Newsnight", calling the move the "most stupid decision the Labour Party has made".

""Great parties have great causes," McTernan said. "If you don't have a great cause, you want to change from this government, sure, but change to what? What is the change Labour now offers?"

Sharon Graham, general secretary of the powerful Unite union, also criticised the decision, warning that it "will confirm workers' scepticism of the endless promises of jam tomorrow".

What next?

Starmer is likely to blame the move on current economic woes and financial mismanagement by the Tories. The Conservatives, in turn, are "likely now to turn their fire on the promises underpinned by the £28 billion a year borrowing plan, specifically the drive to bring about 'clean energy' by 2030", said The Telegraph.

Labour Party officials have previously indicated they would keep the core mission of investing in green infrastructure, as well as previously announced plans such as the creation of GB Energy, a publicly owned clean energy company. But there is now a major "policy vacancy" at the heart of Labour, said Edwards in The Spectator, just as the party looks to flesh out its offering to voters ahead of a general election later this year.

Senior Labour figures are "conscious that many voters perceive economic credibility to be a Labour weakness, and so want to address this head on", said the BBC's Mason. But this "slow motion U-turn will burnish the arguments of Sir Keir's critics – not least the Conservatives – who claim he is forever changing his mind and doesn't believe in anything".