Britain’s Labour Party pares back flagship green spending plans

LONDON (Reuters) – Britain’s opposition Labour Party on Friday pared back a flagship pledge to spend 28 billion pounds every year on building up green industries, instead saying high interest rates meant the target would have to be met more gradually.

Labour, which according to opinion polls is on course to win Britain’s next national election, has sought to portray itself as the only party which can spur economic growth by investing heavily in green technologies and jobs with plans to rival similar investments in the United States and the EU.

But its earlier promise to invest 28 billion pounds ($35.12 billion) every year until 2030 in green technologies has come under fire from some who say it could lead to rising borrowing costs. The governing Conservative Party has said the plan would mean “a huge tax raid on hardworking Brits”.

Labour’s finance policy chief Rachel Reeves said much had changed since her party first drew up its green prosperity plan and that high interest rates meant she had to amend the earlier pledge.

“Since I first made the commitment to this plan, interest rates have gone up 12 times, and we’ve seen the Conservatives crash the economy in their disastrous mini-budget,” she wrote in the Times newspaper.

“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 28 billion pounds a year in the second half of the parliament at the latest.”

With the election expected next year, Labour is keen to portray itself as the party of fiscal responsibility, one which will meet strict borrowing limits, to try to end the opposition party’s reputation as being high spending and high borrowing.

($1 = 0.7973 pounds)

(Reporting by Elizabeth Piper; editing by William James)