Did Keir Starmer need to ditch his £28bn pledge?
In a major U-turn, Sir Keir Starmer is set to backtrack on spending £28bn a year on green projects, arguing it's not possible due to the state of the economy
Sir Keir Starmer wants to make his general-election manifesto bombproof, which is why he removed that pledge to deploy £28 billion a year on green investments.
His hope is this would neutralise Rishi Sunak's charge that Labour's investment plan would lead to higher taxes or higher interest rates.But the question is whether he is thereby turning that manifesto into a dud, a blank, a great fat yawnathon, for a UK that is crying out for big ideas and hope.There are a few important and related points to make about this significant U-turn.The first is that for any economically literate person, the £28 billion was no longer the lethal weapon for the Tories that they wanted it to be - after Shadow Chancellor Rachel Reeves said on my programme (and every time she opens her mouth, anywhere) that it would only be spent if it didn't risk breaching the fiscal rules (namely that debt as a share of national income must be falling on a rolling timetable of five years).This is the same fiscal stricture as that of the Tories and their chancellor Jeremy Hunt (as I pointed out to him in an interview on Wednesday).
So in that sense, the investment is no more likely to increase inflation, interest rates or any other factor affecting our living standards than any spending or investment decision he makes.To put it another way, the £28 billion had become, at the point that Reeves said the fiscal rules always take precedent, simply a symbol of how Labour's fiscal choices are different from those of the Tories.The £28 billion was a shorthand for "if there is money to invest, it will go on insulating homes, building giga factories, connecting windfarms to the grid and so on" and in the process reduce household energy bills, create jobs, and keep the UK on track to meet its climate change pledges.For any left-of-centre party, these are respectable - some would say noble - ambitions.The £28 billion encapsulated an argument about how Labour's priorities were different from the Tories' and Sunak's determination to cut taxes both before and after the general election.It would have been - it was - a battle of ideas and values.
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To be clear, that battle hasn't been eliminated altogether.
Starmer will claim that Labour would still prioritise more green investment than the Tories. But his claims will sound less compelling, less exciting, less brave.Perhaps what is most surprising is that he has been allowing the government to set the economic agenda - despite the Tories astonishing lack of popular support - by repeatedly saying he agrees the tax burden is too high, and that he would not increase corporation tax, income taxes and so on.He's defining Labour at the moment by what it would not do in government: he won't put up taxes, he won't re-integrate the UK's economy with that of the European Union (EU), he won't restore the cap on bankers' bonuses, he may not abolish the House of Lords.That may limit the scope for the Tories and their media supporters to manufacture scare stories about how Starmer as PM will raid our wallets. But it makes Labour very dull.It's not that he doesn't have any plans for change. It's just that they are not electrifying.
That is partly because he isn't shouting about some of them because he doesn't think they are universally popular - such as giving more power to trade unions - and it is partly because they are either practical but not visionary (such as cash from VAT on school fees channeled to a range of public services) or remain vague (how exactly to build 1.5 million homes for example).It is possible that he and his advisers are spot on that the country simply wants the Tories out after 14 years, and all he has to do is reassure that a Labour government would flip-flop less and be more competent than them.Here are the risks. First, if voters believe Sunak's and Hunt's jibes are setting Labour's agenda, some of them may not think it's worth voting for a change of personnel in Downing Street.And, second - and perhaps worse - some voters may see the £28 billion flip-flop and begin to fear Starmer's word is no more his bond than that of successive Conservative PMs.
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