Labour formally drops £28bn green pledge and blames Tories for ‘crashing the economy’ – as it happened


Afternoon summary

And here is an extract:

Estimates from thinktanks and academics suggest 10s of billions a year are needed for the shift to a low-carbon future: the IPPR thinktank came up with a figure of £30bn a year of public investment in a study in 2021, while earlier this year the London School of Economics suggested £26bn a year.

And as a result, the UK is now lagging behind. As Ed Matthew, campaigns director at the E3G thinktank, put it: “A lack of investment in our clean energy transition has left the UK off track to meet our climate targets and uncompetitive in the global clean tech race. Securing climate safety and future prosperity requires a major uplift in public green investment.”

These are from Faisal Islam, the BBC’s economics editor, on what Labour is doing.

Bottom line:

Opposition prioritising ability to attack Government over the rise in mortgage rates as their central election strategy, versus defending an economic strategy of borrowing to invest in a green Industrial Revolution, in a US/ Biden way…

— Faisal Islam (@faisalislam) February 8, 2024

Bottom line:

Opposition prioritising ability to attack Government over the rise in mortgage rates as their central election strategy, versus defending an economic strategy of borrowing to invest in a green Industrial Revolution, in a US/ Biden way…

Essentially the strategy here is

Relentlessly saying “Tory Mortgage Premium” is being prioritised over defending “£28bn green borrowing”

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This is from Common Wealth, a leftwing thinktank, on Labour’s £28bn U-turn. Its director Mathew Lawrence said:

Labour’s retreat from their green investment plan – on the same day scientists have confirmed last year was a record for global heating – is a deeply disappointing reversal. Our homes will be colder, our energy dirtier, our economy weaker, the transition slower and more expensive as a result. What’s more, the shrinking of ambition is taking place exactly as other countries are pouring record levels of investment into the green industries and jobs of the future.

Despite the U-turn, the outlines of an agenda – GB Energy, clean power by 2030, and green wealth fund – remain. However, if these ideas are to be more than rhetoric, Labour needs a strong commitment to what remains of their plans to delivering serious public investment and deep and meaningful change.

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Labour gives details of what’s in green prosperity plan

As well as dropping the £28bn annual target, Labour has also released some details of what is still in the green prosperity plan. Journalists have been given a briefing paper which does not seem to be online yet. A lot of this has been announced before, but some elements are new – in particular relating to the insulation plan, where Labour says there will be “a slower initial roll out than we had hoped to deliver”.

Here are the details. This is a relatively long post, but since there is a lot of comment around these days about Labour not having a plan, given that they have published it, it seems worth showing what it actually says.

Setting up Great British Energy, costing £8.3bn

Labour says:

We will create a new publicly owned company – Great British Energy – to invest in homegrown clean energy across the country and give us real energy independence from foreign dictators. 

GB Energy will be headquartered in Scotland. It will accelerate new nuclear and position Britain as a leader in technologies such as floating offshore wind and tidal. It will also partner with the private sector to accelerate the rollout of more mature renewable energy generation technologies such as wind and solar. 

We already have public ownership of energy in Britain, just by foreign governments such as the French and Chinese, rather than our own. Great British Energy will aim to emulate the success of domestic energy champions in other European countries. 

A Labour Government will capitalise Great British Energy with an initial £8.3bn (inclusive of the £3.3bn Local Power Plan) – over the first parliament, investing in partnership with the private sector.

Having a local power plan, using £3.3bn of the 38.3bn for GB Energy

Labour says:

Whilst the Conservatives block cheap homegrown renewables with an onshore wind ban that is costing families £180 on their bills every year, Labour will back the builders and not the blockers, so that communities in all four nations of the UK can put up wind turbines, solar panels, and other forms of low carbon power to cut bills. 

To drive the energy transition and crowd in investment, as part of its initial capitalisation, Great British Energy, Labour’s publicly owned energy company, will partner with energy companies, local authorities and cooperatives to develop 8GWs of clean power by 2030 – double the power of the world’s largest windfarm. 

That is why Labour is allocating resources to support local power in partnership with communities. Of Great British Energy’s capitalisation, £3.3bn will be available in grants for local authorities and loans to communities to create one million owners of local power.

Setting up a national wealth fund, valued at £7.3bn

Labour says:

Labour will set up a National Wealth Fund, which will create good well paying jobs in a zero-carbon economy by investing in industries where one pound of public investment can crowd-in a further three pounds of private sector investment. 

This plan will help to re-industrialise the UK with hundreds of thousands of good jobs for plumbers, electricians, engineers, and technicians across the country. 

A Labour Government will invest £7.3bn in our National Wealth Fund, with investment deployed in every region and nation of the UK, including:

• Steel: investing £2.5bn in a bright future for our steel industry, benefiting communities in Cardiff, Rotherham, Sheffield, Port Talbot and Scunthorpe. This reflects our original £3bn commitment, of which £500m is now in the government’s spending plans. Due to the perilous state of the steel industry, we are accelerating this scheme from over ten years to five.

• Ports: upgrading our ports so they are renewable-ready, with an investment of £1.8bn, which would inject investment into nine clusters, including; Forth and Tay, Humber, East Anglia, Solent, North West and North Wales, Belfast Harbour, North East Scotland, North East England and the Celtic Sea.

• Gigafactories: breaking the ground for new electric vehicle and battery factories, with £1.5bn investment in our automotive heartlands in the West Midlands, the North East, and the South West. This is in addition to the £500m already committed by the UK Government.

• Industrial hubs: decarbonising carbon-intensive heavy industrial hubs in every corner of the country, with an investment of £1bn, benefiting Scotland, South Wales, the Humber, Teesside and Merseyside.

• Hydrogen: channelling up to £500m into green hydrogen manufacturing, which could benefit the North West, Sheffield and the South East. 

Taken together, these policies will support the creation of over 200,000 direct jobs and up to 260,000-300,000 indirect jobs over the decade. This will directly address geographical inequalities, with 50,000 new jobs each in both the North West and Yorkshire, as well as 30,000 new jobs each in the North East, the East Midlands, the West Midlands, and the East of England. 

The National Wealth Fund will use a range of tools of support, including equity stakes in return for those investments.

British jobs bonus, costed at £500m a year

We will boost investment and jobs in Britain’s industrial heartlands and coastal communities, by rewarding clean energy developers with a British Jobs Bonus if they invest in good jobs and supply chains in those areas. 

Labour will allocate a fund of up to £500m per year, starting from the 2026-27 contract for difference auction round, to provide capital grants to incentivise companies developing clean technologies like offshore wind, onshore wind, solar, hydrogen, and carbon capture and storage, to target their investment particularly at the regions that most need it.

Warm homes plan, with £6.6bn on top of the £6.6bn already being spent by the Tories

The national emergency of rising energy bills has again highlighted the urgent importance of insulating as many homes as possible. The UK spends more money on energy wasted through the walls and roofs of our houses than any other country in Western Europe. 

Labour’s Warm Homes Plan would start a national programme that will upgrade up to five million of the UK’s 16 million homes below an EPC rating of C over the parliament. Our aim will remain to ensure that every home below EPC C that can be practically upgraded, is done by 2035 – this is aligned with the government’s target, but offers a credible plan. 

This programme will go street by street, installing energy saving measures such as loft insulation and low-carbon heating, saving families on low-incomes hundreds of pounds per year, slashing fuel poverty, and getting Britain back on track to meeting our climate targets. 

Our investment will be split between: energy efficiency grants, delivered hand-in-glove with local authorities to target the areas and families in most need; government-backed zero-interest loans for green home upgrades like solar panels; and grants to make sure heat pumps are affordable for people who want them. We will work with commercial banks to ensure they offer mortgage products that support retrofit.

This is a slower initial roll out than we had hoped to deliver when we originally planned this policy, due to the fiscal situation. On the Tories’ watch, insulation rates have crashed 90% – one of the reasons the UK had one of the most acute energy price crises in Western Europe.

Proper windfall tax on oil and gas companies

Labour will introduce a proper windfall tax on the excess profits of oil and gas companies, so we can invest in the clean power we need to cut bills for families. 

Labour will fix the holes in the Energy Profits Levy by:

• Increasing the rate to 78%, the same rate of tax as in Norway.

• Ending the loopholes in the levy that funnel billions back to oil and gas giants.

• Extend the sunset clause in the windfall tax until the end of the next parliament, provided there continue to be windfall profits. 

Together, these changes would raise £10.8bn over the next five years from 2024-25 to help fund the Green Prosperity Plan. 

This amount is based on current OBR forecasts. The amount raised will depend on outturn oil and gas prices and production levels, as well as the level of investment and the amount offset against taxation.

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Labour has ‘world-leading agenda on climate and energy’, says Ed Miliband, after £28bn target dropped

Labour’s news release confirming the abandonment of the £28bn annual green investment target contains these quotes from Labour figures.

From Keir Starmer

I have changed the Labour party to put it back in the service of working people. Our Green Prosperity Plan is about turning a corner on fourteen years of Conservative decline and investing in Britain’s future. It is a plan for more jobs, more investment and cheaper bills. It’s a plan to get our country’s future back.

From Rachel Reeves, the shadow chancellor

Rachel Reeves, Shadow Chancellor, said:

Labour is ambitious for Britain’s future. There is a global race taking place in the jobs and industries of the future, and we are determined to lead it. All the Conservatives are offering the country is five more years of economic failure that will working people choice. Labour has a plan to invest and to get Britain’s future back.

And from Ed Miliband, the shadow energy secretary, said:

Labour will be fighting the election with a world-leading agenda on climate and energy with every single individual policy already announced now confirmed for the manifesto: Great British Energy, a National Wealth Fund, a Warm Homes Plan, a British Jobs Bonus, a Local Power Plan and no new oil and gas licences as well as our 2030 clean power mission.

It is thought that, of these three, Miliband will have been the one most reluctant to see the £28bn target go, because of his particularly strong personal commitment to the net zero agenda. He has not been doing interviews recently, and the Conservatives have been running a social media campaign suggesting he’s in hiding.

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Labour says it won’t be able to spend £28bn per year on green investment because Tories crashed the economy

Labour has confirmed that it has formally dropped its target of spending £28bn a year on green investment. It made the announcement in a briefing to journalists giving new details of its green prosperity plan.

The party said:

Labour has today announced plans to invest in Britain’s future, with Keir Starmer setting out further details of Labour’s mission to kick start growth and deliver clean power by 2030.

As part of the party’s finalisation of policies for a general election campaign, Labour has reconfirmed its commitment to the policies announced through the Green Prosperity Plan, to create jobs, cut bills and unlock investment.

The Green Prosperity Plan will be funded by a windfall tax on the oil and gas giants, and borrowing to invest within Labour’s fiscal rules.

The party also confirmed that, due to the Conservatives’ crashing the economy and Jeremy Hunt’s plans to ‘max out’ the country’s credit card, it would not be possible to reach the previous commitment of £28bn a year.

The centrepiece of the package is Great British Energy, a publicly owned energy company to take back control of the energy system on behalf of the British people.

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Gordon Brown defends dropping £28bn green investment target, saying Labour has to show ‘fiscal discipline’

Gordon Brown has also defended Labour’s decision to drop £28bn as the annual target for spending on green investment. Asked about the move being confirmed today, Brown told LBC’s Tonight with Andrew Marr:

I haven’t seen any official announcement actually. But if that’s what he’s decided, it is because [Keir Starmer] and [Rachel Reeves, the shadow chancellor] have decided that they’ve got to abide by some fiscal discipline, given the state of the public finances.

You have got to remember when we left power in 2010, debt was below 40% of national income. It’s now 100% of our national income, I got criticised for allowing it to rise to 40%. Now it’s 100% and the Conservatives have got to take some responsibility for leaving a mess for the incoming government, whoever it is.

Aletha Adu

Rishi Sunak deliberately visited a dental practice that’s not accepting new adult NHS patients, Downing Street have said. (See 3.21pm and 3.26pm.)

The prime minister went to Gentle Dental in Newquay to promote his plans to offer cash incentives to dentists to accept more patients as more than 12 million were unable to get an appointment last year.

Sunak insisted the announcements this week will make a significant difference, and quickly”.

When asked if Sunak couldn’t find a practice accepting new patients, the prime minister’s deputy spokesperson said:

The prime minister wants to hear about the challenges surgeries are facing, and the challenges we’re trying to address through our dental plan … It’s right for the prime minister to hear from people on the frontline.

Rishi Sunak talking to a young patients during a visit to Gentle Dental practice in Newquay, Cornwall. Photograph: Hugh Hastings/PA

The Labour announcement about the future of the commitment to spend £28bn a year on green investment is coming at 5pm.

Rishi Sunak was in Cornwall today where he visited an dental surgery that does not accept adult NHS dental patients. (See 3.26pm.) He also visited Nancledra preschool where one of the people on the advisory board is Hannah Ray, a former colleague at the Guardian. I know that readers often wonder what the point of these visits is. Hannah was there, and she has been wondering about it too. She sent me this.

Rishi Sunak visited our preschool today, and completely missed the point. He did a puzzle with one of the children, looked at the guinea pigs, looked at the garden, and then took questions from the local press.

But while the press asked about second homes, his response to Brianna Ghey comments made at PMQs, and local council funding, no one – including the PM – seemed at all interested that the very preschool he was sitting in is under constant threat of closure due to lack of government funding into early years provision and lack of investment in early years staff training and incentives.

Government funding is now available for nearly all two-year-olds. However, the living wage has gone up by 9.8%. Staff are barely paid above the minimum wage yet have the biggest responsibility, working long hard hours to care for the most vulnerable people in society. The preschool is bursting at the seams with working parents wanting to get the childcare they need, but there aren’t the spaces.

Why did Rishi visit our preschool, in one of the most under-funded areas of the country, and one of the most deprived, if he didn’t really care about how it was doing?

Rishi Sunak visiting Nancledra preschool in west Cornwall. Photograph: via Hannah Ray

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Gordon Brown says he apologised as PM when he made mistakes, and Sunak should too

The former prime minister Gordon Brown has added his voice to those saying Rishi Sunak should apologise for his anti-trans jibe at PMQs yesterday. Asked about it in an interview for Sky’s Politics Hub with Sophy Ridge, Brown said:

Well, when I made mistakes, I did apologise. And look, every prime minister makes mistakes. I don’t think you can say that every prime minister will fail to make some mistakes, but I think you should apologise if you get things wrong and I mean it is a very sad and really tragic, tragic case of a family in grief.

I know he’s said he’s compassionate about the family, but perhaps he should do what I had to do on one or two occasions and apologise. And I do accept that if you make mistakes, you’ve got to correct them quickly.

Brown was giving an interview to highlight his concern about rising levels of extreme poverty in Britain, and his proposals for what should be done to address this. He has written about this in an article for the Guardian.

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