Energy Sector Is Frustrated By Uncertainty Over Labour £28bn Green Spending Pledge

Labour has been warned that scaling back its £28bn Green Prosperity Plan would send the wrong message to investors who are already frustrated with the lack of consistency from government on messaging over net zero.

In 2021 Labour originally pledged to invest £28bn per year in green energy as part of its Green Prosperity Plan. Proposals include creating green jobs, insulating homes, building low carbon infrastructure, and setting up Great British Energy if they win the election, due this year.

A number of powerful economies globally have spent significant amounts on green energy and technologies, including the Inflation Reduction Action (IRA) in the US, a $369bn investment by the President Joe Biden's government. 

Labour's plans were warmly received by the energy sector, with a poll of international green energy investors commissioned by the Labour Climate and Environment Forum (LCEF) in September finding 78 per cent of respondents said they believed the proposals would bring more opportunities to UK businesses than risk. 73 per cent of investors also said government-led investment in renewable resources will drive a similar or increased level of private sector investment.

However, since then the shadow chancellor has watered down the plans, with Rachel Reeves saying the figure is now a target the party will work towards by the second half of the first term in parliament, if fiscal rules allow.

The change in tone follows repeated attacks by the Conservatives, who already appear to have made criticism of the £28bn price tag a cornerstone of their election strategy. During a press conference on Rwanda legislation on Thursday Prime Minister Rishi Sunak segued onto the topic, claiming "the Labour party can't tell you how they're