Labour’s plan for £28billion green investment would add £20billion to the national debt, analysis finds

Labour’s plan to spend £28billion a year on green investment would add £20billion to the national debt, according to analysis.

Sir Keir Starmer has pledged to borrow the vast sum to pay for green initiatives – including investing in jobs and energy independence.

But the Tories said his ‘unfunded promise’ would leave the party spending more on debt interest and less on public services.

Its analysis suggests Labour’s plan would result in £20.44billion in debt interest payments over one parliament – the same as the entire Home Office budget.

The Opposition last night disputed the figure, and said they had not yet set out the yearly breakdown.

Sir Keir Starmer has pledged to borrow the vast sum to pay for green initiatives. Pictured:  The Labour leader in the House of Commons on Wednesday

Chief Secretary to the Treasury Laura Trott said independent figures show ‘Keir Starmer’s unfunded promise to borrow an extra £28billion every year’. Pictured: Ms Trott outside Downing Street on Tuesday

Shadow chancellor Rachel Reeves has previously said the policy would ‘ramp up’ by the middle of the first parliament.

The research assumes that Labour would increase spending by £7billion in the next financial year, then £14billion in 2025-26, and £28billion for the subsequent three years of the parliament.

READ MORE HERE: Keir Starmer appears to row back on plans to spend £28 billion a year on green investments following warnings they could damage the economy

The total cost – £20.4billion – is the equivalent of more than 400,000 nurses or 88,000 doctors, the Tories said.

According to the research, Labour would be spending almost an additional year worth of their borrowing plan on servicing their debt – meaning less money for public services.

Chief Secretary to the Treasury Laura Trott said last night: ‘Independent OBR figures show Keir Starmer’s unfunded promise to borrow an extra £28billion every year means Labour will spend more on debt interest and less on public services.

‘The independent Institute for Fiscal Studies says Labour’s additional borrowing means both ‘potentially increasing inflation, and also drives up interest rates’.

‘Rather than taking the easy way out by passing on our debts to our children and grandchildren, Rishi Sunak is taking long-term decisions to get debt falling and build a brighter future for our country.’

A Labour spokesman said: ‘It was the Conservative Party that crashed the economy and left Britain worse off, with the highest tax burden on record and the highest levels of debt since the 1960s. Labour’s plan to get our economy growing will cut bills, create jobs and make working people in all parts of the country better off.

Shadow chancellor Rachel Reeves has previously said the Labour policy would ‘ramp up’ by the middle of the first parliament. Pictured: Ms Reeves giving a speech at the Labour Party conference on October 9

‘Labour will ramp up to a total of £28billion a year in the second half of the Parliament. We will factor in the Government’s current investment on the green transition into our plans.

‘Labour will introduce a new set of fiscal rules. We will not borrow to fund day-to-day spending and we will reduce national debt as a share of the economy over the course of the Parliament.’

Labour recently appeared to water down the green plan, with shadow chief secretary to the Treasury Darren Jones saying the commitment would be met ‘towards the end of the next Parliament’ should Labour win the election.

But a Labour source said Mr Jones had meant to say ‘in the second half of the parliament’.

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