Reeves pledges £28bn annual climate change fund under Labour

An extra £28 billion would be spent each year on helping Britain tackle the climate change crisis under a Labour government, the shadow chancellor has pledged.

Rachel Reeves said she wanted to become Britain’s “first green chancellor” as she outlined proposals for a massive investment in shifting the country to greener technology.

Ms Reeves explained the money would be for capital projects and run until the end of the decade.

In a speech laden with soundbites aimed at boosting Labour’s economic credibility, Ms Reeves also said the party would set up a team to go through “every line of every failed contract where value was not delivered” during the Covid-19 pandemic.

She said the aim would be to “claw back every penny of taxpayers’ money we possibly can” after accusing the Conservatives of presiding over an “outsourcing bonanza”.

Ms Reeves confirmed she would freeze business rates next year if she was in No 11 while also offering a cut for small firms, paid for by hiking digital taxes.

She committed the next Labour government to abolishing business rates, using the proceeds of a global deal on taxing multinational firms.

A “laser focus” on efficiency in the tax system was also promised, with tax breaks not delivering for the economy or taxpayer scrapped.

(PA Graphics)
(PA Graphics)

Speaking in Brighton, Ms Reeves told delegates: “I will invest in good jobs in the green industries of the future; giga-factories to build batteries for electric vehicles; a thriving hydrogen industry; offshore wind with turbines made in Britain; planting trees and building flood defences; keeping homes warm and getting energy bills down; good new jobs in communities throughout Britain.

“In other words: protecting and strengthening our everyday economy. And to make this a reality, to unlock that potential, and protect our planet for future generations.”

She added: “I can announce today Labour’s climate investment pledge, an additional £28 billion of capital investment in our country’s green transition for each and every year of this decade.

“I will be a responsible chancellor. I will be Britain’s first green chancellor.”

The plan sees Ms Reeves thrown down the gauntlet to Chancellor Rishi Sunak ahead of next month’s Budget, which comes weeks before the global climate change conference in Glasgow.

Ms Reeves’s pledges also came as Labour seeks to get its conference in Brighton back on track following internal rows over party rules, criticism of Sir Keir Starmer after he ruled out nationalising energy giants and the fallout from Angela Rayner’s attack on the “scum” in Boris Johnson’s Cabinet.

Earlier in her keynote speech to conference, Ms Reeves said Labour wants to “clean up the Tories’ Brexit mess”.

She added: “I’m more than happy to take on the Tories when it comes to economic competence because I know we can win.”

On taxation, Ms Reeves pledged she will “not balance the books on the backs of working people”, adding: “We will look at every single tax break and if it doesn’t deliver for the economy or the taxpayer, then we will scrap it.”

She also took aim at Amazon founder Jeff Bezos as she called on the Government to increase the digital services tax to 12% for the next year, to make sure online companies like Amazon are paying their fair share.

Ms Reeves told delegates: “When Amazon’s revenues went up by almost £2 billion last year, how much did their tax go up? Less than 1%.

“If you can afford to fly to space, you can pay your taxes here on Earth.”

Greenpeace UK’s head of politics Rebecca Newsom said Ms Reeves had “hit the right mark” in her speech.

She said: “Crucially £28 billion per year extra climate investment is the scale of funding we so desperately need to both tackle the climate crisis and bring about the millions of new jobs for workers in a new green economy, creating new opportunities for those who work in declining industries.

“Rachel Reeves has laid down the gauntlet, the question is whether the Chancellor Rishi Sunak can respond in kind.”