Labour will cut £28bn green investment if there is not enough money, Starmer says
Labour’s plan to borrow £28bn a year to fund green infrastructure could be cut back, Sir Keir Starmer has admitted for the first time.
The party’s flagship green prosperity plan has already been scaled back after Labour conceded it would be impossible to start spending £28bn from the first year after an election.
Now the Leader of the Opposition has confirmed that if the level of borrowing needed proves impossible under the Treasury’s fiscal rules, the party will not spend the full figure.
The pledge to invest £28bn a year, funded by Government borrowing, was first made by Shadow Chancellor Rachel Reeves in 2021.
In the light of repeated interest rate rises and the brief borrowing crisis triggered by Liz Truss, Labour has repeatedly insisted it would prioritise the fiscal rules and said that the full £28bn would only be reached in the second half of the Parliament.
Asked whether he remained committed to the project, Sir Keir told reporters: “The whole point of the fiscal rules is that they are a limit on the borrowing… It will be within the fiscal rules, which means that if you can’t get the full sum within the fiscal rules we will borrow to invest less.”
He added: “We’re setting out what we’re going to use the money on, particularly through the National Wealth Fund, GB Energy. And when we make that argument about GB Energy, and say we want to have a publicly owned company that will ensure that where the state invests the yield comes back to the British taxpayer, it’s hugely popular.”
The fiscal rules proposed by Labour state that the Government should not borrow to fund day-to-day spending but can borrow for long-term investment, as long as the total stock of national debt is on course to fall over a five-year period.
Sir Keir also told reporters he would not start talks on future pay settlements with the health unions before the general election. He said: “If we are privileged enough to come and serve, then of course that is part and parcel of the annual round of pay negotiations that everyone is familiar with.”
But he called on ministers to speed up negotiations in order to end NHS strikes, saying: “What I don’t want is the Government just to leave this as they’re leaving everything else until the other side of the election, they need to get on and solve this dispute. And at the moment, almost everybody involved in the junior doctors is sort of suggesting there’s a deal to be done, but they are arguing about who gets in the room first.”
