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Rachel Reeves refused to use Labour’s controversial £28 billion figure as she defended her party’s flagship green investment plan on Monday.
In 2021, the shadow chancellor promised that a Labour government would borrow £28 billion a year for five years to fund green energy projects and infrastructure.
However, the promise was watered down last June when Ms Reeves admitted that it would only be met in the second half of the Parliament.
The exact investment is now said to be subject to Labour’s fiscal rules, with senior party figures appearing to contradict themselves about the scale of their ambition.
Taking calls on her monthly LBC Radio phone-in, the shadow chancellor was challenged by a listener who noted that the pledge had been diluted from a major policy commitment to an “ambition”.
Asked about how she would deal with the “long-term implications” of climate change, she replied: “I totally agree with you that tackling the climate emergency is incredibly important, but so too is securing the good jobs that come from investing in the industries of the future and also the lower bills that will come from investing in renewable home-grown energy.
“That’s why the green prosperity plan is so important. But we also know from what the Conservatives have done in the last two years... everything that we do will be subject to the fiscal rules that I’ve set out, because when you play fast and loose with the public finances it is ordinary working people who pay the price.”
Ms Reeves blamed Liz Truss, the former Tory prime minister whose mini-Budget spooked the markets and led to higher mortgages, for her inability to commit to the £28 billion figure.
“I did not foresee the Liz Truss mini-Budget that crashed the economy, put pensions in peril and sent mortgage rates soaring,” she said. “That was the choice that the Conservatives made, but it has meant the economic inheritance for the next Government is going to be dire.”
Ms Reeves went on to accuse the Conservatives of a “scorched earth” strategy, claiming ministers planned to leave as little fiscal headroom as possible to create difficulties for an incoming Labour administration.
Asked about reports that she wanted to cut taxes for wealthier voters, Ms Reeves said: “I want taxes on working people to be lower right across the income distribution.
“I’m not going to make any promises that I can’t keep – fiscal responsibility, for me, comes first. But I do think that taxes have got too high in the last few years.”