After weeks of speculation, the Labour Party finally confirmed yesterday that it would be abandoning its £28bn annual green investment target. The central reason for this was said to be the Conservatives’ crashing the economy and attempting to ‘max out the country’s credit card’, meaning that the previous commitment of £28bn was no longer possible. Labour stressed the importance of maintaining fiscal prudence and staying within fiscal rules as it looks to convince the country of its leadership for the upcoming election. The reformulated plans now come in at just under £15bn a year, with around half of that money set to come in from a windfall tax on gas and oil profits which is set at 78% and extended until the end of the parliament.
The biggest cuts have been to the policy of home insulation, which previously had been promised a £6bn budget but now comes in at just £1.3bn a year. This cut now means the party intends to insulate 5m homes over a 5-year period rather than the originally planned 19m. However, plans for a £7.3bn national wealth fund and £8.3bn for a nationalised clean energy company, GB Energy, do remain in the hope that the party can hit its target of clean power by 2030. As part of the £7.3bn wealth fund investment will be provided to the following sectors:
- Steel- Investing £2.5bn in a bright future in our steel industry benefiting communities such as Cardiff, Rotherham, Sheffield, Port Talbot and Scunthorpe.
- Ports- Upgrading ports so that they are renewable ready through a £1.8bn investment.
- Gigafactories- Providing £1.5bn to break new ground in electric vehicles and battery factories.
- Industrial Hubs- Decarbonising intensive heavy industrial hubs in every corner of the country.
- Hydrogen- Channelling up to £500m into green hydrogen manufacturing.
Taken together these policies hope to create over 200,000 direct jobs and address geographical inequalities.
Other policies include:
- Making £3.3bn available for grants to local authorities and loans to communities to create one million owners of local power.
- Creating a British Jobs Bonus of £500m a year.
Despite the party still committing to £15bn a year, the stepdown on environmental promises has undoubtedly angered many environmental groups, especially as it was announced on the same day that the EU’s Climate Service announced that global warming exceeded 1.5C across an entire year between February 2023 and January 2024. Ultimately, the Labour Party will hope that their commitments can convince the electorate and businesses that they are still maintaining a serious and well-funded plan for tackling the climate crisis.