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  1. Election 2024
  2. Labour
1 February 2024

Are Keir Starmer and Rachel Reeves at odds over the £28bn pledge?

While the Labour leader is happy to reaffirm the figure, the shadow chancellor avoids it all costs.

By Freddie Hayward

A split is emerging. Labour’s commitment to increase green investment to £28bn a year has overshadowed the party for months. Caged in by strict, self-imposed fiscal rules, its messaging on the policy has become confused. On the one side are those who think Labour must drop the pledge in order to stave off Tory attacks around its irresponsibility with the public finances and potential tax rises. On the other are those committed to a radical, reforming government that diverges from the economic consensus established by George Osborne. 

Despite the party’s message discipline, this split has come into public view. Rachel Reeves, whose political reputation is becoming entwined with fiscal conservatism, refuses to mention the figure when asked. She did not use it in her speech at Labour’s business conference today and refused to answer whether the party would invest £28bn in the green economy ten times in an interview with Sky News. Reeves suggested that the pledge could be abandoned entirely following the Budget on 6 March (“we will update people on our thinking”).

That is not the approach her party’s leader takes. Keir Starmer was happy today to associate himself with the £28bn figure. He said: “We will ramp up to that £28bn during the second half of the parliament subject to of course what the government has already allocated and subject to our fiscal rules.” Using the figure is one thing. But will Labour lead a debate in public on the issue and turn to face the Tory attacks? On 8 January, Starmer said: “If they want that fight on borrow to invest, I’m absolutely up for that fight.”

Is this merely a tactical divide between Reeves and Starmer or reflective of a genuine split? The issue has the potential to become a defining rift between the likely future occupants of No 10 and No 11. It speaks to a deeper question for Labour: does it think the country is ready for a government that takes a more active role in the economy, or is a redefinition premature? Will Labour prioritise its missions for government or its fiscal rules? Or perhaps the question is this: does Labour even want to change the role of the British state?

[See also: How Rachel Reeves is making Labour the party of business]

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