Rachel Reeves has scrapped Labour’s flagship plan to spend £28billion a year on new green jobs and technology as she claimed the party could no longer commit to the figure because of economic uncertainty.

The shadow chancellor said a Labour government would instead look to “ramp up” green investment every year with the aim of eventually hitting the £28billion annual figure.

Ms Reeves sought to blame the about-turn on the Tories and last October’s mini-Budget as she said she “didn’t foresee what the Conservatives would do to our economy”.

The shadow chancellor was unable to say how much a Labour government would now spend under its green prosperity plan in its first year in power, telling the BBC: “We will set out all of our numbers that are consistent with those fiscal rules as we get closer to the election.”

Ms Reeves said she believed a Labour government would achieve the £28billion annual investment figure by the second half of a first term in power - so not for at least two and a half years.

The pledge to spend £28billion a year was originally unveiled with much fanfare by Ms Reeves at the Labour Party conference in September 2021 as she promised to be “Britain’s first green chancellor”.

The decision to move away from the spending commitment is likely to cause a backlash from climate change activists.

You can follow the latest updates below. 

10:02 AM

SNP accuse Labour of 'latest in a long line of broken promises'

Labour’s decision to scrap its pledge to spend £28billion every year on green investment is the “latest in a long line of broken promises”, the SNP’s leader in Westminster said.

Stephen Flynn said: “This is the latest in a long line of broken promises from the pro-Brexit Labour Party - and one that could have very real and damaging consequences for Scotland’s green energy potential.

“The Tories have trashed the UK economy with Brexit, cuts and their failure to properly invest in renewable energy - but rather than change, the Labour Party is offering more of the same.

“The best way to secure economic growth is to properly invest in the renewables gold rush and rejoin the EU - the Labour Party has now turned its back on both and it will be ordinary families who pay the price as the UK economy falls behind and the cost of living soars.”

09:40 AM

Tory chairman Greg Hands: Labour's main economic policy is 'in tatters'

Greg Hands, the chairman of the Conservative Party, said Labour’s main economic policy was “in tatters” after the announcement by Rachel Reeves this morning (see the post below at 08.39).

Mr Hands said: “Keir Starmer’s main economic policy is in tatters, after even he and Rachel Reeves realised it would lead to disaster.

“It doesn’t matter if they try and pretend otherwise, Labour’s plan remains to stick £28 billion of borrowing on the government credit card which will lead to higher inflation and higher interest rates.

“The Conservatives are taking immediate action to fix the problems families are facing, while putting in place the long-term solutions to build a stronger and more innovative economy that will guarantee a better future for the next generation.”

09:38 AM

Ed Miliband insists Labour still 'determined' to deliver green investment plan

Ed Miliband, the shadow climate and net zero secretary, said a Labour government would want to be spending £28billion on green investment by the second half of its first term in power “at the latest”.

He tweeted: “Rachel, Keir and I are determined to deliver our Green Prosperity Plan, ramping up to £28bn a year in investment in the second half of the parliament at the latest. This plan will transform Britain to cut bills, create jobs, and lead on climate.”

09:15 AM

Labour 'would spend £28bn a year on green investment by second half of first term in power'

A Labour government would achieve spending of £28billion a year on green investment by the second half of its first term in power, Rachel Reeves said this morning.

Asked if the £28billion figure would be hit eventually by a Labour government after the party dropped the pledge to spend that from its first year, the shadow chancellor said: “Yes. We will get to the £28billion, it will be in the second half of the first parliament but we will get to that £28billion and that is what is needed to secure those jobs and those investment.

“The reason I am confident is that I am confident that our plans built on the fiscal rules but our growth plans… can get the growth that we need, get that money in so that we can deliver this green prosperity plan, the jobs, the security, and the lower the bills that come from it.”

09:09 AM

Shadow chancellor blames Tories for Labour U-turn on green investment

Rachel Reeves defended Labour’s decision to scrap its £28billion green investment pledge as she attempted to blame it on the Tories.

The shadow chancellor told the BBC: “The truth is I didn’t foresee what the Conservatives would do to our economy. Maybe that is foolish of me but I did not envisage the mini-Budget that crashed our economy, pushed up interest rates in this way.

“And so I am not going to give you a number when I don’t know what more damage the Conservatives are going to do.”

09:05 AM

Rachel Reeves unable to say how much Labour would spend on green investment in first year in power

Rachel Reeves was unable to say how much Labour would invest in green industries in its first year in power after scrapping a pledge to spend £28billion every year.

The shadow chancellor told the BBC: “Well, there is still going to be another two fiscal statements from the Government before the next general election. That is the most likely scenario and so we will set out all of our numbers that are consistent with those fiscal rules as we get closer to the election.

“Who knows what more damage the Conservatives are going to do to our economy in the next year or so.”

Asked if the investment in year one of a Labour government could be as low as zero, Ms Reeves said: “That would not be the scale of our ambition. We are more ambitious than that.”

09:00 AM

Rachel Reeves suggests Labour scrapped green investment pledge to avoid repeat of mini-Budget chaos

Rachel Reeves suggested Labour had watered down its pledge to spend £28billion a year on green investment to avoid a repeat of the economic chaos which surrounded the Government’s mini-Budget back in October last year when the financial markets were spooked by the prospect of a big surge in government borrowing to pay for tax cuts.

The £28billion which Labour pledged to spend every year was due to be paid for through increased government borrowing.

Ms Reeves told the BBC: “We saw what happened just last year when the Conservatives embarked on this mini-Budget of a load of unfunded commitments that it crashed the markets and has resulted in that Tory mortgage penalty that we are all paying.

“So we will ramp up to the £28billion investmnent in the opportunities, the industries of the future and to reduce bills and to secure our economic security. We will ramp up to that.”

08:39 AM

Labour scraps plan to spend £28billion every year on green technology and jobs

Rachel Reeves has announced that Labour has scrapped its flagship plan to spend £28billion a year on green jobs and technology.

The shadow chancellor said the party would instead look to “ramp up” spending every year as she blamed the about-turn on the Tories who she claimed had “crashed our economy”.

She told BBC Radio 4’s Today programme: “The other thing that has happened in last two years is the Tories have crashed our economy, and as a result interest rates have gone up 12 times, inflation is now at 8.7 per cent and I’ve always said that 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.”

Ms Reeves said the £28billion figure previously set out by Labour would be a target to work towards rather than the amount initially allocated.

08:25 AM

PM: 'Entirely reasonable' for US voters to ask if all Nato nations are 'doing their bit'

Rishi Sunak said it was “entirely reasonable” for people in the US to ask if all Nato nations are “doing their bit” on defence spending and helping Ukraine.

The Prime Minister said he believed it was “reasonable and right” that Nato countries are expected to spend two per cent of GDP on defence.

The comments, made during an interview with CNN in Washington DC just before the Prime Minister flew back to the UK last night, will be viewed as an attempt by Mr Sunak to win over some US politicians who have doubts over the scale of support being offered to Kyiv.

The Prime Minister said he had spoken to both Democrats and Republicans during his visit and he believed there was “strong support” for Ukraine.

He said: “I think there is an acknowledgement, as I said, that the values that we are fighting for are universal, they are values that America has always stood up for, which is democracy, freedom, the rule of law.

“But I think it is entirely reasonable for people to ask is everybody doing their bit? I am proud to say the UK is.

“Behind the US we are the next largest contributor to the effort to support Ukraine and more broadly when it comes to defence spending we are one of the few countries that invest two per cent of our GDP in defence, that is a Nato commitment that we have made, that we have adhered to.

“I think it is reasonable and right that we expect other countries in the Nato alliance to increase defence spending up to those levels and that is something that I speak to other leaders about as well.”

08:18 AM

Rishi Sunak: World is 'lucky' to have Joe Biden as US President as China poses growing challenge

Rishi Sunak said the world is “lucky” that Joe Biden is US President at a time when China poses a growing challenge.

The Prime Minister said there are “few leaders” who have as much experience as Mr Biden does in dealing with Chinese President Xi Jinping and that experience is “particularly valuable to me as someone who is newer to this”.

Mr Sunak made the comments to CNN just before flying back to the UK after his two-day visit to Washington DC.

He was asked what generational differences there may be between him and Mr Biden given that he is 43-years-old while the US President is 80.

The premier replied: “It is hard for me to say, commenting on the outside. I find that President Biden’s experience is incredibly helpful particularly on issues like China. I think there are few leaders anywhere who have spent as much time talking to President Xi as President Biden has over the years.

“At a time where China poses the particular challenge that it does, I think we are lucky to have President Biden’s perspective on President Xi.

“I have found that particularly valuable to me as someone who is newer to this. As I said, I think the relationship that he and I have is delivering real benefits for our people in America and the UK.”

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