Ex-Bank of England economist ‘laments’ Labour U-turn on £28bn green pledge

Published

1 year ago

February 12, 2024

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A former chief economist at the Bank of England has expressed disappointment at Labour’s decision to axe its £28bn green investment pledge.

Andy Haldane, who is now the managing director of the Royal Society of Arts, told Sky’s Sophy Ridge that the original promise “led the world” in its ambition, and would have benefitted the country – both in achieving its net zero goals and stimulating growth.

But the decision by Sir Keir Starmer last week to bin the target showed how politicians are “scaling back our plans in the UK at the same time as other countries have stepped up their plans,” he said.

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The pledge to spend £28bn every year until 2030 on green investments, from new technologies to planting trees, was made by shadow chancellor Rachel Reeves during the Labour Party conference in 2021.

But she scaled it back to a target last summer, with Ms Reeves blaming high inflation and interest rates following former prime minister Liz Truss’s disastrous mini-budget.

Last week, Sir Keir confirmed Labour would scrap the headline figure entirely. He said: “Because of the damage the Tories have done, we can’t now do everything that we wanted to do” if he got the keys to Number 10.

However, he was criticised by some within his party – as well as opposition MPs – for U-turning on such a key policy.

Asked about Labour’s decision in an exclusive interview for the Politics Hub With Sophy Ridge – airing at 7pm tonight on Sky News – Mr Haldane said: “I think it’s a shame. I mean, I think back to when that green prosperity plan was first hatched. It was big, it was bold, ambitious. It led the world, actually, in terms of its scale.

“And we now have seen a number of other countries playing catch-up, putting forward their own plans.

“So I think the scaling back of our plans in the UK at the same time as other countries have stepped up their plans is unfortunate for two reasons.

“One, it slows our transition to net zero, which is really important. And two, we do need that investment. And the green prosperity plan was about that extra dose of investment to stimulate growth.

“So I rather lament the sort of paring back of those plans.”

Mr Haldane appealed to whoever takes charge at the next election to show “a little more boldness about the economy and boldness around investment”.

He added: “I understand the fiscal constraints, but I also think the rules that we have boxed ourselves in on might not be as effective as they need to be to stimulate and support that investment.”

The former economist said growth had to be the priority after the economy had “stood still” for two years.

“That has put huge pressure on households, huge pressure on public services, huge pressure on local governments,” he said.

“And the only way to break free from the constraints of that is by us growing our economy sustainably in a way that hasn’t happened for the past 24 months.”

Politics

Why Boris’s best mate is off to Reform

Published

8 hours ago

July 10, 2025

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👉Listen to Politics at Sam and Anne’s on your podcast app👈       

Former Conservative chairman and friend of Boris Johnson – Sir Jake Berry – is defecting to Reform UK, causing more problems for Tory leader Kemi Badenoch.

On today’s episode, Sky News’ Sam Coates and Politico’s Anne McElvoy discuss if his defection will divide parts of Reform policy.

Elsewhere, the Anglo-French summit gets under way, with Prime Minister Sir Keir Starmer hoping to announce a migration deal with French President Emmanuel Macron to deter small boat crossings.

Plus, chatter around Whitehall that No10 are considering a pre-summer reshuffle, but will it have any value?

Politics

Australia to test CBDCs, stablecoins in next stage of crypto play

Published

10 hours ago

July 10, 2025

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Australia to test CBDCs, stablecoins in next stage of crypto play

The trial is part of Project Acacia, an initiative from the RBA exploring how digital money and tokenization could support financial markets in Australia.

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Starmer and Macron agree need for ‘new deterrent’ to stop small boat crossings

Published

17 hours ago

July 10, 2025

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Starmer and Macron agree need for 'new deterrent' to stop small boat crossings

Sir Keir Starmer and Emmanuel Macron have agreed the need for a “new deterrent” to deter small boats crossings in the Channel, Downing Street has said.

The prime minister met Mr Macron this afternoon as part of the French president’s state visit to the UK, which began on Tuesday.

High up the agenda for the two leaders is the need to tackle small boat crossings in the Channel, which Mr Macron said yesterday was a “burden” for both the UK and France.

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The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.

Sir Keir is hoping he can reach a deal for a one-in one-out return treaty with France, ahead of the UK-France summit on Thursday, which will involve ministerial teams from both nations.

The deal would see those crossing the Channel illegally sent back to France in exchange for Britain taking in any asylum seeker with a family connection in the UK.

However, it is understood the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.

French newspaper Le Monde reports that up to 50 small boat migrants could be sent back to France each week, starting from August, as part of an agreement between Sir Keir and Mr Macron.

A statement from Downing Street said: “The prime minister met the French President Emmanuel Macron in Downing Street this afternoon.

“They reflected on the state visit of the president so far, agreeing that it had been an important representation of the deep ties between our two countries.

“Moving on to discuss joint working, they shared their desire to deepen our partnership further – from joint leadership in support of Ukraine to strengthening our defence collaboration and increasing bilateral trade and investment.”

It added: “The leaders agreed tackling the threat of irregular migration and small boat crossings is a shared priority that requires shared solutions.

“The prime minister spoke of his government’s toughening of the system in the past year to ensure rules are respected and enforced, including a massive surge in illegal working arrests to end the false promise of jobs that are used to sell spaces on boats.

“The two leaders agreed on the need to go further and make progress on new and innovative solutions, including a new deterrent to break the business model of these gangs.”

Chris Philp, the shadow home secretary, seized on the statement to criticise Labour for scrapping the Conservatives’ Rwanda plan, which the Tories claim would have sent asylum seekers “entering the UK illegally” to Rwanda.

He said in an online post: “We had a deterrent ready to go, where every single illegal immigrant arriving over the Channel would be sent to Rwanda.

“But Starmer cancelled this before it had a chance to start.

“Now, a year later, he’s realised he made a massive mistake. That’s why numbers have surged and this year so far has been the worst in history for illegal channel crossings.

“Starmer is weak and incompetent and he’s lost control of our borders.”