They’ve talked the bold talk. Sir Keir Starmer regularly claims that a government led by him will transform the UK into “a clean energy superpower”. Rachel Reeves declares that she will be “Britain’s first green chancellor”. Ed Miliband, the shadow cabinet’s most ardent champion of the green industrial revolution, proclaims that Britain can be a winner in “the biggest transformation of the global economy in 300 years”.
Talking is a whole lot easier than doing. When the crunch comes, when a Labour cabinet faces the horribly tough choices that are going to confront them in power, will their fine words turn out to be little more than hot air?
That’s a concern since Labour backtracked on its centrepiece green prosperity plan after aggressive attacks by critics from both outside the party and within. The plan, as originally set out, was to borrow £28bn a year from the beginning of a Labour government to invest in wind power, tidal energy, solar, green hydrogen, battery factories, home insulation, carbon-capture and other climate-friendly projects. The plan acknowledged that achieving a decarbonised, more sustainable and more resilient economy requires a substantial commitment by the state because the private sector on its own will not do what needs to be done.
The Labour leader and his colleagues have cast it as a British version of Joe Biden’s Green New Deal designed to pump up investment in cutting-edge technologies and reduce our dependence on hydrocarbons that can be weaponised by tyrants while creating high-skill, well-paid jobs in left-behind regions. It is – or, at any rate, was – Sir Keir’s best riposte to the charge that Labour doesn’t have much to offer that is ambitious and inspirational. Yet there’s been chuntering against the green prosperity plan from within Labour’s own ranks ever since he chose to put it front and centre of his leader’s speech to the last party conference.
A gripe I hear from some Labour MPs is that it is not “connecting” with voters who – or so it is claimed – are less bothered about the climate crisis than they are by stubbornly high inflation and the crunch on living standards. Another issue is the price tag. A Labour government will be handed a dire inheritance from the Tories and face intense pressures to spend more in every area of the public realm. Those who think the NHS or schools or insert-your-preferred-priority-here should come first have resented the scale of the commitment to the green transition. In the rumbles of dissent from Labour frontbenchers, I have detected envy that the chequebook has been opened for what some see as Mr Miliband’s passion project. The more so because other members of the shadow cabinet asking for permission to make spending promises are shown the hand by Ms Reeves and Pat McFadden, her flinty deputy.
The levees broke when she announced the plan could no longer be reconciled with the fiscal rules she says she will impose on a Labour government. Her desire to be a “green chancellor” takes second place to her determination to be seen as an “iron chancellor”. Labour’s pledges are now subject to delays, a change of position confirmed by Sir Keir last week. Rather than invest £28bn annually from the first year of a Labour government, the figure has turned into a more distant target that they aim to hit by the second half of the next parliament.
Their explanation is that the cost of borrowing has ballooned since the plan was devised in 2021 and the public finances look much worse. In other words, blame the Tories. This alibi is accompanied by senior shadow cabinet members saying, at least in private, that the state isn’t equipped to funnel a lot of money into decarbonisation projects from day one of a Labour government. This implicitly admits that they were green, in the sense of being naive, in once thinking this would be possible. Mr Miliband has put a brave face on any disappointment he may feel by saying that Labour remains “absolutely committed” to the green transition. He is telling allies that he’s content because those who agitated to have the plan chucked out have lost and the party’s senior leadership is now locked in. Sir Keir is keen to emphasise that other pledges, such as creating a new state-owned energy company, remain intact.
Still, there’s no disguising that this is a significant retreat. Green campaigners have expressed dismay while Tories have jeered about another “Starmer flip-flop”, but there’s not been as much blowback as senior Labour people feared. That’s because attention has been focused elsewhere: on the defenestration from parliament of Boris Johnson and the rolling economic miseries engulfing Rishi Sunak.
This has meant that some key questions for Labour have been under-scrutinised. Is it realistic to think that the UK can generate all its electricity from clean sources by the end of this decade? Sir Keir maintains that is still his mission, but a lot of expert opinion is sceptical. The polite say it sounds “highly ambitious”. The ruder say there’s not “a hope in hell” of achieving the target. Labour claims it can kickstart growth to turn the UK into the fastest-expanding economy in the G7. Does that still add up when investment in a critical component is going to start later than originally promised? A hard pledge has softened into a vaguer-sounding goal. The wary are suspicious that it will next dissolve into nothing better than a wispy aspiration. That would be bad for the country and for the planet. It would mean not being competitive in the global race to develop technologies, create jobs and master markets of the future. It would leave Sir Keir bereft of a flagship policy.
For sure, Labour has to persuade voters it will invest wisely, but the money needs to be placed in perspective. Government spends more than £1tn a year. Compared with that mountain, £28bn is a molehill. The cost of government schemes to help people cope with soaring energy bills is expected to come in somewhere north of £75bn with no new infrastructure, technology or employment opportunities to show for it. The Conservatives borrowed an ocean of cash, upwards of £400bn on some estimates, to mitigate the impact of Covid-19. Most people agreed that this was justified because the pandemic was such a threat to lives and livelihoods. The climate crisis is an existential menace to the planet which imperils many more lives and livelihoods. In that context, an annual investment of £28bn to accelerate attainment of net zero is not such an extraordinary sum. It is small change compared with the epic damage that will be inflicted on the economy and the public finances if we fail to progress with sufficient urgency.
The political advantage to Labour of the green prosperity plan is that it is future-facing and creates a crisp dividing line with Tories who are too divided among themselves to produce a coherent strategy to decarbonise the economy. There’s a sizeable minority of voters for whom the climate crisis and the environment trumps everything. The Greens did rather well in May’s local elections. At the general election, Sir Keir will be hoping to squeeze a chunk of that vote over to Labour. His chances of doing so will be reduced if these voters conclude that Labour’s commitments are hollow.
The majority of the electorate is supportive of net zero. Even at a time when there are many other things jostling for the attention of voters, surveys indicate that the climate ranks in the top four issues that they regard as the most important challenges facing the UK today. Anxiety about our frying planet tends to rise as you go down the age range. A compelling programme to address the climate crisis will be important in galvanising younger voters to turn out for Labour. For all these reasons, it had better be true that this shift on green policy is a tactical adjustment rather than the beginning of a headlong retreat.
It should not be beyond Sir Keir and his team to make the green prosperity plan attractive. If the Labour party cannot sell lower bills, more jobs, a healthier planet, energy self-sufficiency and screwing Vladimir Putin to the electorate it might as well get out of the business of politics altogether.
The Labour leader and his colleagues ought to be mindful of the dangers of giving the impression that they make grandiose-sounding pledges to change the world only then to retreat when they encounter challenge and resistance. That’s not the way for an opposition to generate confidence. As a method of running a government, it would be terrible.
