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  1. Election 2024
  2. Labour
6 February 2024

Cracks between Starmer and Reeves are starting to show

Confusion over the £28bn-a-year green pledge is a sign Labour’s team is not working as it should.

By Freddie Hayward

I will keep this short. I know you are probably tiring of the constant speculation over whether Labour will ditch its policy to invest £28bn a year in the green economy. I assure you that this is the fault of Keir Starmer’s office and not the media.

But given it is one of Labour’s few substantive policies, it’s worth following – not least because it’s exposing some of the latent divides within the party. This morning Keir Starmer pledged himself to the figure yet again in an interview with Times Radio, describing the investment as “desperately needed”.

This wouldn’t be news if his whole team was behind him. It is the party’s policy after all. But he should probably tell his shadow chancellor that. As I wrote last week, Starmer and Rachel Reeves are clearly not singing from the same policy sheet. Reeves pretends the £28bn does not exist, refusing to mention it when asked ten times in a single interview. Starmer vacillates: promising a fight to defend the argument that the government should invest to grow, at the same time as not closing down rumours the policy will be ditched.

It exposes a three-way split within Labour: those who want to ensure the party is elected with a mandate to tackle the problems facing the country; those anxious to foreclose Tory attacks at any cost; and those wedded to an Osbornite fiscal conservatism. With regards to the campaign, the choice is between two evils: does Labour want to expose itself to Tory attacks on the public finances? Or does it want Starmer’s reputation for lacking principles and consistency to worsen? (For reasons I won’t get into here – I’m trying to keep this short, remember – I suspect the former is the lesser evil of the two.)

This saga also reveals a split over how to achieve growth, the keystone to Labour’s plans in government. On one side are those who view the green prosperity plan as the party’s sole route to economic growth. On the other, and you can include Reeves here, are those who baulk at the high levels of public debt and want to make cheap reforms to the economy (read: planning) to stimulate the growth that will, in turn, fund green investment. So which one is it? Invest to grow? Or grow to invest?

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These are some of the tensions within the policy itself. But in the short term, the problem is more mundane. The confusion is a sign that the relationship between Starmer’s office and Reeves’s team is not working as it should. It’s a bad omen for government. Some in Labour are already questioning the quality of their leadership given its apparent inability to unify around a single approach. If the disagreement is a more fundamental one about a Labour government’s purpose – as seems so – then those splits will widen.

This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here.

[See also: If Donald Trump wins, he’ll control Europe’s gas]

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