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Ditching of its green plan reveals Labour’s ideological vacuum | Larry Elliott

Ditching of its green plan reveals Labour’s ideological vacuum | Larry Elliott

Ditching of its green plan reveals Labour’s ideological vacuum | Larry Elliott
Feb 11, 2024 57 secs

Sir Keir Starmer and Rachel Reeves are understandably reluctant to have the next election campaign dominated not by the government’s dismal economic record but by Labour’s £28b “tax bombshell”, which is what Rishi Sunak and Jeremy Hunt would prefer.

All that said, the ditching of the £28bn pledge reveals an ideological vacuum at the heart of Labour’s economic policy and an acute lack of self-confidence.

“Once the UK’s sustainable innovation system is up and running, government support can be phased down, as new, more efficient and productive industries increasingly outcompete the old and generate their own global revenues and inward investment.

The Starmer-Reeves case for watering down the green prosperity plan is that economic and financial conditions have changed since it was originally announced at the 2021 party conference.

In the meantime, Liz Truss managed to wreck the Conservative party’s reputation for economic competence in the way that Black Wednesday did 30 years earlier.

The paper by Stern and his colleagues demonstrates why borrowing to invest is consistent with financial prudence, but even were that not the case Labour could still fund its full green prosperity plan by raising tax.

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