Shadow chancellor Rachel Reeves first announced the policy at the party's annual conference in 2021, saying that £28bn of additional funding would be invested each year over the decade to 2030, going towards the likes of battery gigafactories, hydrogen, offshore wind, tree planting, flood defences and retrofitting homes. Since then, the policy has repeatedly been watered down.
Despite rumours at the start of the week that the party was planning to scrap the pledge, Labour leader Sir Keir Starmer appeared to recommit to the £28bn figure in an interview with Times Radio on Tuesday.
However, last night, the party confirmed that “due to the Conservatives’ crashing the economy” it would “not be possible to reach the previous commitment of £28 billion a year.”
Instead, the updated Green Prosperity Plan commits to £23.7bn of investment over the course of the next parliament - this is equivalent to just under £5bn a year.
£10.8bn of this is expected to be raised through Labour's proposed windfall tax on oil and gas majors and a further £12.9bn is expected to come from borrowing, which would remain subject to Labour's fiscal rules.
Labour added that Great British Energy - the party’s proposed publicly owned energy company - will be given £8.3bn in the next parliament. This figure includes the £3.3bn announced for the party’s Local Power Plan.
The proposed National Wealth Fund, which is set to invest in British industries such as electric vehicle production and carbon capture and storage, will be capitalised with £7.3bn of investment, according to the party. The British Jobs Bonus will be given £500m per year from 2026-27 and the Warms Home Plan will be given £6.6bn, which the party said will “double the government’s already committed £6.6bn”.
However, Mike Childs, head of policy at Friends of the Earth, said that the claim that the party is planning to double spending on its Warm Homes Plan is “misleading because not all the money is to be spent on insulation”.
He said the new pledge “pales in comparison to the investment required to tackle the worst homes and lift millions out of hardship” and accused the party of “turn[ing] its back on the people who most urgently need these essential upgrades – the many millions of low-income households suffering from living in poorly insulated homes.”
Commenting on the announcement, Starmer said: “Our Green Prosperity Plan is about turning a corner on 14 years of Conservative decline and investing in Britain’s future. It is a plan for more jobs, more investment and cheaper bills. It’s a plan to get our country’s future back.”
Ed Miliband, Labour’s shadow energy secretary, who has been a key advocate of the need for the £28bn investment, said Labour will be “fighting the election with a world-leading agenda on climate and energy with every single individual policy already announced now confirmed for the manifesto: Great British Energy, a National Wealth Fund, a Warm Homes Plan, a British Jobs Bonus, a Local Power Plan and no new oil and gas licences as well as our 2030 clean power mission.”
However, Prime Minister Rishi Sunak told broadcasters today that the announcement “demonstrates what we’ve been saying - [Labour] absolutely don’t have a plan. Their signature economic policy is in tatters, and when you don’t have a plan, you can’t deliver any change for the country.”
Greenpeace UK’s co-executive director, Areeba Hamid, said that Starmer has “caved like a house of cards in the wind”.
“As well as scaling the investment back by around 80%, just a fraction will be spent on insulating homes, and not even a penny will be spent on public transport. These are two of the sectors in greatest need of new government investment to seize the opportunities of green growth, level up the country and lower bills.
“This country is broken. We need bold, visionary leadership that will lower bills, create millions of jobs, increase our energy security, and tackle the existential threat of climate change. The British public and businesses are crying out for a green industrial strategy fit for the 21st century, not a hollowed out plan with an empty wallet”, Hamid added.