LABOUR has dramatically downgraded its flagship economic plan to spend £28billion every year on an eco boom.
Shadow Chancellor Rachel Reeves this morning said she would “ramp up” to the figure by 2027/28 instead of hitting the ambition straight away upon election.
Rachel Reeves confirmed she has backtracked a pledge to spend £28billion a year on green investment
She admitted she had been “foolish” to promise the money so early and blamed the government’s handling of the economy for forcing her to scale back.
The climbdown – confirmed live on the radio – follows weeks of internal battles over whether the party could splurge the eye-watering sum of cash without spooking nervous markets.
It is a particular blow for Labour’s climate change spokesman Ed Miliband who masterminded the “green prosperity plan” to invest hundreds of billions on renewables.
Ms Reeves told the BBC: “I will never be reckless with the public finances… and I’ve always said our fiscal rules are non-negotiable.
“Economic stability, financial stability, always has to come first and it will do with Labour.
“That’s why it’s important to ramp up and phase up our plans to get to the investment we need to secure these jobs so that it is also consistent with those fiscal rules to get debt down as a share of GDP and to balance day-to-day spending.”
She would not put a figure on what she intends to borrow in her first and second year if installed in the Treasury following an election, likely next year.
The £28billion every year was supposed to fund a massive increase in green power following Labour’s vow to end oil and gas drilling in the North Sea.
Tory MPs seized on Labour’s backtracking as another u-turn for the party constantly accused of flip-flopping.
Party chairman Greg Hands said: “Keir Starmer’s main economic policy is in tatters, after even he and Rachel Reeves realised it would lead to disaster.”
Conservative Mark Jenkinson said: “Couldn’t run a bath if someone turned the taps on for them.”
Robert Largan piled in: “Starmer loves a u-turn and it doesn’t take a genius to work out borrowing £28billion per year to give to Ed Miliband is a seriously terrible idea.”
