Keir Starmer will announce on Thursday that he is scaling back Labour’s £28bn green investment programme, in his biggest policy U-turn since becoming party leader.
Senior Labour sources have told the Guardian that Starmer will finally confirm the party is no longer planning to spend £28bn a year on environmental schemes, given the economic uncertainty caused by the Conservative government.
Starmer has insisted for several weeks that he still intended to meet the pledge, which was first made in 2021 as part of a promise that Labour would be the greenest government in history. But doing so has become far more difficult since it was made, given that the worsening fiscal outlook has left less room to borrow more without long-term debt levels going up.
Some shadow ministers have urged Starmer for months to drop the target, arguing that it plays into Conservative attacks about Labour’s fiscal credibility.
Others have warned that doing so will only accentuate the feeling among many voters that Starmer cannot be trusted to stick to his word. It is the latest in a series of major policy reversals since he became Labour leader, including dropping a promise to scrap university tuition fees and to impose higher rates of income tax on top earners.
Recent media briefings by shadow ministers have led to speculation of a split between Starmer and his shadow chancellor, Rachel Reeves. Reeves was asked repeatedly about the pledge in an interview with Sky News last week but failed to mention the £28bn on 10 separate occasions.