Labour's flagship policy scrapped over fears it would spark economic MELTDOWN admits Rachel Reeves
Rachel Reeves has announced a huge Labour U-turn after realising her party’s flagship environment policy could have crashed the economy
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Rachel Reeves has announced a huge Labour U-turn after admitting her party’s flagship environment policy could have sparked triggered an economic crisis.
The Shadow Chancellor has admitted that plans to splash £28billion of green investment into the economy each year could have had an impact similar to Liz Truss's mini-budget.
The proposals have now been scaled back as Labour reveals its aim to spend the sum towards the end of their five years in Government, rather than from the beginning.
Reeves said the changes to her plan were being made because the Labour Party was being responsible with public finances.
The Shadow Chancellor has admitted that plans to splash £28 billion of green investment into the economy each year could have caused in a Liz Truss-style economic spiral
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“No plan can be built that's not on a rock of economic and fiscal responsibility," she told the BBC.
"Because if you try to do things that then crash markets, you end up in the position that [the] Conservatives [were] and I will never be reckless with the public.”
When asked if Labour's plans could have seen the same difficulties Liz Truss’s government got into, Reeves didn't deny the claim.
She said the precise concern was “why I always said that our fiscal rules would be non negotiable, because they are the rock of stability upon which everything else is built”.
Chancellor Jeremy Hunt said the U-turn is "superficial" and would still add "around £100billion to our national debt - meaning higher mortgages for families and higher debt interest bills for taxpayers".
He added: "A responsible approach should tackle inflation, not fuel it."
Labour first confirmed their flagship policy in 202.
Announcing the reversal, Reeves wrote in the Times: “To make sure there is time to build the supply chains we need, skill our workforce and ensure the taxpayer gets value for money, the right way to deliver our Green Prosperity Plan is to ramp up the investment over time reaching a total of £28billion a year in the second half of the parliament at the latest.
Chancellor Jeremy Hunt said the U-turn is 'superficial' and would still add 'around £100 billion to our national debt - meaning higher mortgages for families and higher debt interest bills for taxpayers'
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“My commitment to Labour’s fiscal rules, including ensuring debt is failing, has always been non-negotiable — and it will remain that way.
"Within that framework of fiscal responsibility, it is right to borrow to invest, not for unfunded tax cuts or day-to-day spending, but to build the economy of the future.”
The move will be a major blow to left-wing environmental campaigners.
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