Sir Keir Starmer has confirmed Labour will halve its flagship green investment plan, reducing the annual spending target from £28bn to under £15bn. The decision, announced jointly with shadow chancellor Rachel Reeves, ends weeks of speculation and marks a significant U-turn for the party leader.
Under the revised plans, only about a third of the reduced amount will be new money, with the rest coming from existing government commitments and changes to the windfall tax on oil and gas companies. Labour intends to raise the windfall tax rate from 75% to 78% and extend it until the end of the next parliament.
The biggest cuts fall on home insulation. Labour previously pledged to spend up to £6bn a year insulating 19 million homes over a decade. Now it plans to spend just £6.6bn over the entire parliament, insulating 5 million homes in the first five years, with the 19 million target pushed out to 14 years.
Speaking in Westminster, Sir Keir said the original pledge was made when interest rates were low, but after Liz Truss's mini-budget and subsequent economic damage, borrowing costs have risen sharply. He stressed that fiscal rules must come first. The decision has angered environmental groups, unions, and some in the energy sector, with Unite accusing Labour of outsourcing policy to the Conservatives.
Despite the cuts, Labour will retain its plans for a £7.3bn national wealth fund and an £8.3bn national energy supplier, Great British Energy, aiming to achieve clean power by 2030. Shadow net zero secretary Ed Miliband, who had pushed back against the dilution, contributed a quote to the press release confirming the U-turn.
