I know a dead pledge when I see one, and I’m looking at one now. Labour’s green prosperity plan is history. It’s kicked the bucket, run down the curtain and joined the choir invisible. This is an ex-pledge. It has suffered the same fate as the Norwegian Blue in Monty Python’s Dead Parrot sketch.
The abandonment of the commitment to invest £28bn a year to accelerate the transition to a carbon-free economy is not a routine political volte-face. This was Sir Keir Starmer’s signature pledge, one launched with tremendous fanfare as his flagship policy in 2021. There has not been a larger, more contentious or more excruciating U-turn during his time as Labour leader.
It is, on the face of it, extremely bewildering. The green prosperity plan was Labour’s most future-facing offer of transformational change. It was Sir Keir’s best answer to the accusation that he has nothing distinctive or inspirational to say to the country. It was at the core of Labour’s ambitions to improve the miserable performance of Britain’s economy by emulating Joe Biden’s growth-boosting “green new deal”. Trade unions and the business world both liked the aspiration to create lots of high-skilled jobs by making Britain competitive in the global race to be a leader in the green technologies.
It had the additional merit of being popular. In one recent poll, conducted by More in Common, respondents scored the plan as one of their favourite choices for inclusion in the Labour manifesto. And yet Sir Keir has now scuttled his own flagship.
The Labour leader would contest my characterisation by insisting that he is retaining elements of the plan, such as the creation of a state-owned energy company and a fund to invest in the decarbonisation of heavy industry. What can’t be disputed is that the investment Labour is now committing to green energy, homes and jobs has dramatically shrivelled to around a sixth of what was originally proposed. The extra above meagre existing Tory plans has been reset at less than £5bn a year. That’s a puny sum relative to the menace posed by the climate crisis and the economic opportunities offered by the green transition. It is less than small change compared with government spending of more than £1 trillion a year and northwards of £75bn in national borrowing to mitigate energy bills.
No one involved in this drastic retreat makes much effort to conceal why it has happened. It’s the imminence of an election that the Tories, without a good record of their own to promote, will try to turn into a referendum on Labour’s economic competence. Rishi Sunak and Jeremy Hunt had started using the £28bn as the sword tip of their thrust that a Labour government will mean more borrowing or higher taxes or both. It was extremely questionable whether the Tories would get much traction from this, not least because of their atrocious financial record. The attack was having no discernible impact on support for Labour, but it still fed the anxieties of key figures in the party’s high command. One central player in all this is Morgan McSweeney, the party’s campaign director. He regularly gives anti-complacency lectures to the shadow cabinet during which he tells them to ignore Labour’s mammoth lead in the polls because it could easily evaporate. He had long agitated internally to kill the £28bn. As did Rachel Reeves, the shadow chancellor. Though it was she who originally announced the number, she had since become persuaded that it was a liability. “It had to go,” says one of her shadow cabinet allies. “We couldn’t head into an election with this big, huge target for the Tories to fire at.” Ms Reeves’ previously expressed desire to be “Britain’s first green chancellor” has been subordinated to her determination to be seen as an “iron chancellor”. A third significant protagonist has been Pat McFadden, who was number two on the shadow Treasury team before he became the national campaign coordinator. He might have been put on Earth to vindicate PG Wodehouse’s observation that it is not difficult to distinguish between a Scotsman with a grievance and a ray of sunshine. Mr McFadden likes to begin internal discussions of Labour’s election prospects by giving shadow cabinet colleagues the cheery reminder: “We usually lose.” These are the leading characters in what you could call Team Take No Chances. A chance they refused to take was fighting an election with a pledge on green spending that some of them took to labelling “the albatross”.
Resistance to them came from Team Hope ’n’ Change. This group thinks that being overcautious is a form of risk itself if it leaves voters unconvinced that a Labour government will change life for the better. The most relevant member of that troupe in this struggle was Ed Miliband, the shadow cabinet’s most passionate evangelist for the green industrial revolution. He put up a spirited but ultimately vain defence of the plan in internal arguments.
Things drifted without a decision for a long time because Sir Keir was reluctant to choose sides. Some Labour frontbenchers mutter that the embarrassingly long months of agonising and uncertainty about the fate of the green pledge came about because their leader was ponderous and dithery. “Too lawyerly,” complain some. “Too civil servanty,” grumble others. What that misses is the personal element in the struggle for the soul and support of the leader. In one of his ears there was Ms Reeves, the self-proclaimed guardian of Labour’s economic credibility, along with Mr McSweeney, the most influential aide on Sir Keir’s team and the architect of the strategy that won him the Labour leadership. In the other ear, there was Mr Miliband, someone Sir Keir has been close to for a long time. Their London homes are less than a mile apart. The Labour leader was very attached to the prosperity plan. “Keir was really taken by it,” reports one member of the shadow cabinet. “He cared a lot about it.” The Labour leader took personal ownership of the ambition to make Britain a green “super-power” in an interview with the Observer on the eve of the 2022 Labour conference, and then made it a central pillar of his speech to the delegates. Sir Keir was still telling one interviewer that the £28bn was “desperately needed” at the beginning of last week, which made him look silly when he announced that he was junking it just 72 hours later. He said the £28bn was “effectively being stood down”, a tortured way of announcing the U-turn that hinted at his difficulty making the decision.
I assume he anticipated the fury that has been ignited among climate campaigners and the mockery he is getting from the right. The Conservatives are already exploiting it to reinforce their case that he is a serial flip-flopper with no authentic convictions who will say anything to get power, the most wounding charge against the Labour leader. The Tories and their media allies are not going to endorse his alibi for the reversal, which is that their economic mismanagement made the plan unaffordable. Nor will this retreat have the intended effect of closing down rightwing attacks. The Tories will continue to claim, as they always do, that there are “spending black holes” and “hidden tax bombshells” in Labour’s plans.
Ripping up such a large commitment invites scorn for Sir Keir’s claim that people can expect consistency and decisiveness from a government led by him. It leaves the pledge to achieve clean power by 2030 looking terribly dodgy while creating a huge hole at the heart of the party’s growth strategy. “In tatters,” the Tory leader is crowing. Added to which is the danger that voters who were enthused by the commitment to a green economy will now turn away in distrust and disillusion.
What this conflict has exposed is the fundamental tension at the top of the party between those who think it imperative that Labour plays it safe and those who believe being paralysed by electoral paranoia is itself dangerous. That divide will follow them into power. This sorry saga is not encouraging if it is a precedent for how Labour will handle the hard choices and gritty battles that the party will face in government.
Just a month ago, Sir Keir was declaring that there would be no resiling from his now defunct plan and defending it from Tory assault was “a fight I want to have”. He may come to regret ducking that fight by instead choosing to take flight.