Merry Christmas Keir Starmer. The Labour leader ends the year with a commanding lead in the polls and both business and media figures working on the assumption that by this time next year he will be in 10 Downing Street. In contrast, Rishi Sunak has little reason for cheer this December (even if he did tell The Spectator that despite everything he is enjoying the job). There is one area where the Tories still think they have an advantage over Labour and that’s Starmer’s green spending plan. ‘It’s how we will will the election,’ insists one optimistic government aide.
Announced by Rachel Reeves in 2021 at Labour conference, the party pledged to borrow £28bn a year to invest in green jobs and industry. Back then, Reeves promised to be ‘the first green chancellor’ as she unveiled the party’s biggest spending pledge to date. The policy has parallels with Joe Biden’s Green New Deal — with Labour planning to attract a matching sum of private investment in green technologies. However, as well as being one of the party’s most expensive policies, it is also the most divisive. Now there’s a debate about whether it will survive an election.
Today’s Guardian reports that the party is considering scaling back the policy amid fears the Conservatives will use it as a central line of attack in the general election campaign. As the Prime Minister hinted to me in an interview for the Christmas issue, the Tories will argue the £28bn will inevitably lead to tax rises. Starmer and Reeves are due to discuss the flagship economic policy next month.
Since 2021, the cost of borrowing has sharply risen (the idea of ‘low for long’ is long gone) and while Labour have tried to blame this squarely on Liz Truss and her mini-budget, it still means they have a lot less room for manoeuvre if in power.