The Guardian view on Labour’s green retreat: wrong, wrong, wrong

Keir Starmer’s announcement is a historic mistake on economic, political and environmental grounds

On Thursday, they finally made it official. For the first time, the EU’s climate change service confirms, global warming has exceeded 1.5C above preindustrial levels across an entire year. The speed and scale of that rise represents a terrifying precedent if it is not reversed, and a shocking act of collective damage to the planet.

It also casts Thursday’s other grim climate announcement – Labour’s long-trailed decision to retreat from its signature commitment to spend £28bn a year equipping the economy to reach its climate targets – into even starker relief. Labour ended up choosing an embarrassing day to make its announcement. But the truth is that any day would have been a bad day for such a humiliating rowback.

There are three big reasons why Labour is wrong. The first is the economics. This was clearly central to Sir Keir Starmer’s decision to backpedal on his green commitments. With higher interest rates and a stagnant economy making borrowing more expensive, Labour is afraid that fulfilling its 2021 green prosperity pledge will breach its self-imposed fiscal rule of reducing government debt as a proportion of economic output.

As a result, the party’s previous commitment to a greening strategy to drive economic growth has been subsumed into a more fiscally hawkish approach, with implications for all government spending. In essence, the hope is that financial services growth will permit the green agenda to become more affordable. This is a large and potentially dismaying strategic change. It flies in the face of the lessons of the Biden administration’s investment in clean energy as an engine for reducing inflation.

Then there is the politics. Labour should not kid itself. The public response to the green retreat will be dispirited and in many cases outraged. Fairly or unfairly, voters will conclude that Labour is too cautious, that it cringes pre-emptively and that Sir Keir does not seem to believe in much. The response will not, on the whole, be relief that Labour provides a safe pair of hands on the economy. While environmentally anxious voters will be alienated, and fiscal conservatives will remain unconvinced, many traditional Labour voters will simply be left asking what the party is for. With this decision, a future Starmer government may even have sown the seeds of its own eventual demise.

The third reason why Sir Keir is wrong is simply that he is ducking the biggest argument of our times. The climate crisis cannot wait. The EU announcement is the latest indicator that governments of the world are stalling on their previous pledges. Labour’s policy switch puts a contentious short-term judgment about UK business and politics above the proven need for decisive action on climate. Changes to pledges like the home-insulation scheme echo Rishi Sunak’s policy of unpicking the big decisions and thus continuing our dependence on fossil fuels.

This is a big moment for Britain. Labour’s unquestioning loyalists may tell themselves that economic credibility is the rock on which everything redistributive rests, that the commitments to climate goals remain, and that perhaps Sir Keir is a Labour dark horse who will prove worthy of comparison with Clement Attlee when he gets into No 10. The danger is that, in Thursday’s order to retreat from a commitment that could have inspired a generation, millions of less committed and less engaged voters will have heard another message – one that tells them politics does not provide them with the hope of a better life.

Cover photo: Sir Keir ‘is ducking the biggest argument of our times. The climate crisis cannot wait.’ Photograph: Murdo MacLeod/The Guardian