Starmer is about to make up his mind about green plans

Rishi Sunak was sharper at the most recent Prime Minister’s Questions than at the previous two. He fought back against Keir Starmer’s ridicule by mocking the leader of the opposition’s inability to decide whether he was committed to £28bn a year of green investment some day. The prime minister referred to an anonymous briefing from someone close to Starmer who described the figure as “an albatross” around the party’s neck, and said: “That might have been the shadow chancellor.” That was an accurate sally because although Rachel Reeves might not have briefed The Sun personally, she would like to get rid of the £28bn figure. There are now almost daily news stories either saying Labour is about to ditch it, or that Labour denies that a decision to ditch it has already been taken. Patrick Maguire of The Times, who is writing a book about Labour’s not-so-long march to (presumed) election victory, reported that at Tuesday’s shadow cabinet meeting, “there were complaints by Emily Thornberry and Louise Haigh that this background hum of speculation is taking its toll on policy making and planning”.

Everyone has taken sides now, which makes Starmer’s decision more complicated. Ed Miliband, the shadow energy secretary, has fought tenaciously to keep the figure, which would provide him with powerful leverage in government. He is said to have “gone bananas” over the “albatross” briefing. Another Labour person told me that the £28bn was such an albatross that it had “dragged the party down to a 20-point lead”. I am afraid I corrected them, saying that the average of the latest six polls shows a 21-point Labour lead. Even Sue Gray, Starmer’s suddenly influential chief of staff, is reported by Maguire to be “resisting any decision that leaves Starmer vulnerable to accusations of folding under Tory pressure”. Too late for that. If the figure is a bad idea (and it is), it needs to go. It is true that it hasn’t done Labour much harm so far but the reason that Isaac Levido, the Tory election chief, has persuaded Sunak to go for it is that it could be a problem for Labour when it comes under the intense scrutiny of an actual election campaign.

That is why I think Starmer has already decided to ditch it. He is serious about “no complacency”, about fighting for every vote as if the party is five points behind, and about reassurance. And that is why the £28bn figure is already a zombie number, left over from the days of zero real interest rates when government borrowing was an easy option. Since Reeves made the £28bn figure subject to her fiscal rules, specifically the one that has debt falling by the end of a parliament, it was already dead. Yet it survives as a half-life, somewhere between an aspiration and a weapon to be deployed by Miliband in negotiations with the Treasury. But also as a weapon to be deployed by the Tories against Labour. So Starmer needs to disown it. As Ed Balls, the former shadow chancellor, put it in his podcast on Thursday: “You need something which looks like a U-turn. And I think that that’s what they’re going to end up doing. They’ve tried partial U-turns. It hasn’t worked. They need a big U-turn.”

We can already predict what form the U-turn will take. Reeves will probably give an interview to the Today programme in advance of a speech to economists and green think tanks in which she will say that Labour needs to focus on what it wants to achieve instead of on an arbitrary number. She may talk about the plan to decarbonise UK electricity generation by 2030, and the drive to save energy by improving the insulation of millions of homes. She may even put a (small) price on the first-year costs of these policies, to be paid for out of the closure of specified tax “loopholes”. And we can guess when she might do it. Although The Sun speculated that the albatross would be lifted from Labour’s neck after the Budget on 6 March, it would make sense to do it before. Starmer, who as leader of the opposition will respond to Jeremy Hunt’s Budget speech, will not want to go into the Commons chamber with a dead bird still weighing him down.

He has already set an internal deadline of 8 February for shadow ministers to finalise their manifesto plans, so that they are ready to enter confidential discussions with civil servants about them. We can therefore expect Reeves (and Miliband) to set out Labour’s shiny new green objectives, without the £28bn number, in the next 10 days or so.

It will look as if Labour has given in to Tory pressure. On the other hand, it will leave the Tories with even less ammunition for the election battle. Richard Holden, the Tory chair, cut the ground from under his own feet yesterday when he said: “For as long as Labour continue to commit to their £28bn of spending without a plan to pay for it, the British people should expect Labour to raise their taxes.” In other words, the moment Labour ditches the £28bn figure, the British people should be reassured that a Labour government would not raise their taxes. That will lead neatly to the argument between the parties about tax cuts in the Budget — and the further tax cuts promised by Holden in a pre-election mini-Budget in the autumn. This is firmer ground for Labour. Starmer, in his reply to the Budget, and Reeves in her reply to the mini-Budget later, will not promise to reverse Tory tax cuts.

John Rentoul, The Independent