Keir Starmer’s green investment scheme could set government debt back another £20billion, Tory party analysis has found. The Labour Party has pledged to spend £28billion on green initiatives including achieving energy independence for the UK and creating more green jobs.
But the hefty price tag of the plan could require more spending on debt relief, taking funds away from elsewhere.
Describing it as an “unfunded promise”, the Conservative Party’s analysis suggests Labour’s plan would result in £20.44billion in debt interest payments over one parliament. This is the same as the Home Office’s entire budget – although the Labour party have disputed that the figure is accurate.
Shadow chancellor Rachel Reeves clarified the investment would be “ramped up” over the course of the second half of their parliament. The research assumes that Labour would increase spending by £7billion in the next financial year, then £14billion in 2025-26, and £28billion for the subsequent three years of the parliament.
The total cost is the equivalent of more than 400,000 nurses or 88,000 doctors, the Conservative Party said. The research also suggests Labour would be spending almost an additional year worth of their borrowing plan on servicing their debt – meaning less money for public services.
Chief Secretary to the Treasury Laura Trott said last night: “Independent OBR figures show Keir Starmer’s unfunded promise to borrow an extra £28billion every year means Labour will spend more on debt interest and less on public services.
“The independent Institute for Fiscal Studies says Labour’s additional borrowing means both ‘potentially increasing inflation, and also drives up interest rates’. Rather than taking the easy way out by passing on our debts to our children and grandchildren, Rishi Sunak is taking long-term decisions to get debt falling and build a brighter future for our country.”
A Labour spokesman said: “It was the Conservative Party that crashed the economy and left Britain worse off, with the highest tax burden on record and the highest levels of debt since the 1960s. Labour’s plan to get our economy growing will cut bills, create jobs and make working people in all parts of the country better off.
“Labour will ramp up to a total of £28billion a year in the second half of the Parliament. We will factor in the Government’s current investment on the green transition into our plans. Labour will introduce a new set of fiscal rules. We will not borrow to fund day-to-day spending and we will reduce national debt as a share of the economy over the course of the Parliament.”
