Labour to scale down plans to insulate millions of homes as it abandons £28 billion green promise

Labour is to radically scale down plans to insulate millions of homes as it ditches its policy to spend £28bn a year on environmental projects.

Amid mounting criticism of the U-turn, Sir Keir Starmer confirmed the figure had been “stood down”.

Labour blamed the change on “the Conservatives’ crashing the economy” and announced plans to raise money by extending the energy windfall tax.

But in a major climbdown, Sir Keir said plans to cut energy bills by giving 19 million people warmer homes in a decade could now take up to 14 years to achieve. Labour will now promise only to kit out 5 million properties by 2030.

Other major projects, as yet unannounced, will also not get the green light.

The party is now set to spend £23.7bn over the course of the next five-year parliament, on top of the £10bn a year it says the government has already committed to.

Sir Keir and his shadow chancellor, Rachel Reeves, have come under fire for the climbdown, which a former adviser to Tony Blair, John McTernan, said was “probably the most stupid decision the Labour Party’s made”.

A member of Sir Keir’s shadow cabinet also told The Independent the U-turn had been “handled dreadfully” and now risked distracting from two potentially disastrous by-elections for Rishi Sunak next week.

Former Labour minister, Lord Blunkett, said “the PR, the timing” of the U-turn “couldn't have been worse” and he hoped “lessons have been learned”.

The Labour leader sought to play down the U-turn, insisting the party would keep its mission to achieve clean power by 2030.

He added: “I don’t want to have a row about the size of a cheque - I want to have a row about the outcomes.”

Ms Reeves also denied she had bullied her party leader into the climbdown and reiterated her vow to become the UK’s first “green” chancellor.

Even before it was confirmed the decision had come under fire from environmentalists and voices within the left of the party.

Former shadow minister, Barry Gardiner, called the decision “economically illiterate, environmentally irresponsible and politically jejune”.

News of the announcement came just after the Greater Manchester mayor Andy Burnham and the Liverpool city region mayor Steve Rotheram warned the party to “stick to the pledge” around green transition.

Last year, Labour adjusted its original plan by saying the £28bn spending target would likely be met in the second half of a first parliament, rather than immediately, if the party wins the next election.

The party has since insisted the pledge is subject to its fiscal rules, which include getting debt falling as a percentage of GDP, as it seeks to reassure voters it would handle the economy responsibly in government.

Confusion over the future of the policy has grown in recent weeks as some senior figures refused to refer to the £28bn figure, while party leader Sir Keir continued to do so as recently as Tuesday.

However, Labour has come under pressure as the Conservatives increasingly seized on the figure as a key attack line, claiming Labour would have to raise taxes to meet the “unfunded spending spree”.

Mr Gardiner warned Labour now risked “being so bland that you stand for nothing”.

He said: “The government will then write your policies for you, and will say, ‘you see Labour’s not telling you what they what they’re going to do. It’s going to be this it’s going to be that’.

“They can paint their own picture, so I think politically, it’s strategically incompetent.”

Labour leader Sir Keir Starmer referred to the £28 billion-a-year figure as recently as this week (PA) (PA Wire)
Labour leader Sir Keir Starmer referred to the £28 billion-a-year figure as recently as this week (PA) (PA Wire)

Other MPs on the left of the party also criticised the plan.

Bell Ribeiro-Addy, the MP for Streatham in London, said that “now is not the time to scale back our green industrial strategy”.

The Unite union, a major donor to Labour, said the “retreat” would “confirm workers’ scepticism of the endless promises of jam tomorrow and it will be ‘alright on the night’ rhetoric on the green transition”.

But Labour received surprising support from David Cameron’s former spin doctor, Craig Oliver, who said the move would leave “glum faces” inside No10 and CCHQ, following the loss of what “was going to be a major Conservatives attack line for months” in the run-up to the general election.

For his part, Mr Sunak accused Labour of “trying to wriggle out” of the £28bn green pledge and said the move demonstrated his argument that Sir Keir “U-turns on major things, he can’t say what he would do differently because he doesn’t have a plan.”

Greenpeace criticised Sir Keir’s decision as showing “weak” political, economic and climate leadership while the Green Party described the U-turn as a “massive backwards step for the climate, for the economy and for good quality jobs”.

The U-turn comes after the Tories claimed an official Treasury costing suggested part of the plan – to upgrade insulation for 19 million homes – would cost more than double the party’s estimate of £6bn.