Sir Keir Starmer’s £28 billion green plans would lead to a £1,400 tax bombshell for the average family, the Chancellor warned.
Labour’s leader was accused of a “triple flip flop” after again changing course on his clean energy pledge.
Jeremy Hunt warned MPs the unfunded promise would mean increasing income tax by four per cent or landing businesses with an eight per cent rise.
Increasing personal taxes to cover the cost would leave the average voter £700 worse off and about £1,400 for a family.
The Chancellor told the Commons: “To increase spending by £28 billion – if you’re going to stick to fiscal rules, as the party opposite claims they will do – it would mean increasing income tax by four per cent or increasing the corporation tax they say they’re going to cap by eight per cent.”
Labour originally promised in 2021 to invest £28 billion a year until 2030 in green projects if it won the next election.
The pledge was tweaked the following year to commit a future government under Sir Keir to spending the cash in the second half of a first term.
Senior sources in the party last week briefed that the £28 billion figure would be dropped altogether.
It came after shadow chancellor Rachel Reeves promised “iron discipline” in sticking to Labour’s fiscal rules and refused to back the pledge.
But Sir Keir used a radio interview to insist his commitment is “unwavering” and the amount is “desperately needed” to meet his clean power targets.
“We’re going to need investment, that’s where the £28 billion comes in,” he told Times Radio.
“That investment that is desperately needed for that mission.
“You can only understand the investment argument by understanding that we want to have clean power by 2030… We need to borrow to invest to do that.
“That’s a principle I believe in and I’m absolutely happy to go out and defend. And of course, what we’ve said as we’ve got closer to the operationalisation of this, is it has to be ramped up, the money has to be ramped up, the £28 billion et cetera, and everything is subject to our fiscal rules.”
Trade Minister Greg Hands said: “Like a champion ice skater, Sir Keir has perfected a new move: the triple flip-flop.”
Treasury Minister Laura Trott said: “After weeks of chaos Keir Starmer has said Labour are not ‘scaling back’ from their £28 billion spending spree. This same old Labour approach of unfunded spending means higher taxes.
“He cannot say how he would fund his £28 billion spending spree because he does not have a plan to pay for it and that means higher taxes for hardworking people and uncertainty for British business.”
