The decision by The UK Labour Party to scale back its £28bn per year green agenda is short-sighted, dangerous and sends completely the wrong message to voters, clean tech investors and innovators.
Earlier this month, June 2023 Labour’s shadow Chancellor, Rachel Reeves announced that its pledge to spend £28bn per year throughout the next parliament if it is successful in forming a government after the next General Election. The announcement was seized upon by the UKs mostly right-wing media as proof of Labour’s inability to manage the country’s finances, but more measured voices were more concerned about what the party might further roll back on should the economy worsen.
Labour has historically struggled, fairly or otherwise, with its reputation on the economy. To counter these charges, just as Gordon Brown highlighted his intention to be “prudent” with the public purse before Labour’s 1997 General Election win, Reeves has been warning that a new Labour government will not be reckless with public finances. Understandable from an electioneering point of view but, as far as the party’s Green Prosperity Agenda is concerned, its disappointing in a number of ways.
Rachel Reeve’s argument for taming spending in the first 2 years of a Labour government was two-fold. Firstly that the economic situation is much worse than expected at the time of the announcement. Secondly that there would be an unavoidable lag while the country scales up the skills and infrastructure to deliver the Green Prosperity Agenda. At first glance, these sound like reasonable arguments. But neither bears any close examination. On the first point, even if the full catastrophe of Conservative’s reckless Autumn 2022 mini-budget hadn’t been foreseen it has been clear for some years now that the economy would be in a perilous state in at the time of the next parliament. Whatever happened to planning for the best scenario, and preparing for the worst?
On the 2nd point, if its true now that some ramp-up time is required before the full £28bn allocation could be used effectively only after the ramp-up period, it would also have been true when the policy was announced. Either its an excuse, or someone at Labour Strategy HQ didn’t do their homework.
Beyond the nitpicking, we are more concerned about what this means for Labour’s commitment to decarbonisation and its ability to hold its nerve in the face of adversity. If the budget so desperately needed for its Green agenda can be delayed before Labour even achieves government, its whole premise serves only as a hostage to future events. We only have to see how the plans for HS2 have been continually scaled back in the face of mounting costs and diminishing budgets to see how bold visions can quickly become millstones. Worryingly, decarbonisation the economy promises to make laying a railway track down the middle of the country look like a walk in the park. Who is going to invest in a plan that at its very outset looks ripe for culling to appease stock markets. Which companies are going to commit time and resources to Labour’s plan if at the first sign of a problem the money starts to disappear? If Labour can make these policy changes now, can they be trusted with our votes to deliver on their promises?