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The UK Labour Party’s Green-Energy Debacle

Labour leaders' decision to abandon their highly publicized Green Prosperity Plan underscores the party’s ongoing failure to articulate a coherent response to Conservative criticism. Instead of focusing on bolstering their fiscal credentials, Labour leaders should reconnect with the party's Keynesian roots.

LONDON – Following months of speculation and infighting, the United Kingdom’s Labour Party has officially abandoned its pledge to borrow £28 billion ($35 billion) annually to invest in green-energy initiatives if it wins the next general election.

Although the British media quickly dubbed it the “mother of all U-turns,” Labour’s announcement was hardly surprising. The party has been gradually scaling back its Green Prosperity Plan, first unveiled by Shadow Chancellor Rachel Reeves in September 2021, since June 2023.

Instead of spending an additional £28 billion annually on green investments for five years, as initially proposed, the party now plans to spend just £23.7 billion – less than £5 billion per year. Moreover, while the original plan relied solely on government borrowing, the updated version aims to raise £10.8 billion through windfall taxes on major oil and gas companies.