Starmer positions himself as PM-in-waiting as psychodramas engulf Westminster and Holyrood

As the Conservatives in Westminster tied themselves in knots over whether to back the Privileges Committee condemnation of Boris Johnson and the SNP’s Humza Yousaf sought to revive independence plans with his party still in crisis, Sir Keir Starmer went to Leith in Scotland to set out his mission to turbo charge renewable energy in the UK should he become PM.

His target is for Britain to produce all its electricity from low-carbon energy sources – nuclear, wind and solar – by 2030. To do it is a bold plan to borrow £100bn+ over the course of the next parliament to transition the country away from fossil fuels to green energy.

By far Labour’s single biggest spending commitment, the party had pledged to borrow £28bn-a-year to fund the flagship green transition programme, but has since scaled back borrowing plans amid growing concerns about taking on debt as the cost of borrowing rises on the back of higher interest rates. Instead, Labour will gradually ramp up borrowing to that level in the “second half of the parliament” if it wins the next general election.

But the plan is still huge – undoubtedly the single most radical policy of Sir Keir’s Labour government should he win the next general election. Labour’s green subsidies amount to more in relative terms than Joe Biden’s own green economy plan – the inflation reduction act – which has earmarked $37bn in subsidies.

The money will be used to launch a state-run company GB Energy to invest in renewables, with a £2.5bn in direct subsidies to green energy providers who contract to manufacture in the UK – the ‘British jobs bonus’ as Sir Keir puts it. He says it will create nearly 500,000 new direct and indirect jobs.

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The driving purpose of the plan is to drive down energy bills – with Labour claiming that it will take £1,400 off average bills if it can hit the 2030 target.

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It is also about transforming the economy in order to better fund public services.

Sir Keir is clear that this is the sort of “activist industrial policy” Britain needs for the longer term, but for voters looking to Labour to commit money to schools, hospitals and transport in the next election, this could prove a hard sell with the amount Labour is willing to borrow to subsidise green technologies dwarfing other commitments for public services.

“We are going to put money into public services,” explains one senior Labour figure. “But we have to grow the economy as the first step. Being clear about stable finances and sticking to it is the best way to turnaround the country.”

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But while the level of borrowing has raised eyebrows, and afforded the Conservatives a “borrowing bombshell” attack line, the plans to block new oil and gas developments in the North Sea as part of the renewables revolution has provoked widespread criticism from industry and union figures fearful of widespread job losses.

Douglas Ross, the Scottish Conservative leader, on Monday said Labour’s plans put “tens of thousands of Scottish jobs a risk”.

The criticisms have prompted another policy tweak as Sir Keir promised not to revoke any fossil fuel extraction licenses granted before the next general election, even though it could take years before those new fields begin producing.

This allows the Labour leader to insist existing jobs in oil and gas are not at risk, but there’s no doubt that as production is gradually wound down, this will be a momentous shift for a sector that supports nearly 200,000 jobs in the UK.

There is also the question of whether the Labour leader can actually deliver what he is pledging in this five years. Sir Dieter Helm, professor of economic policy at Oxford University who has advised the government on energy policy over many years, said last week the goal was unlikely to succeed on current trajectory.

When I pressed Sir Keir in an interview in Leith on Monday if the “clean power by 2030” pledge was a guarantee or a target he demurred, saying it was his “ambition” and he believed to be “doable”. Not an explicit guarantee then, and for good reason.

There is also a question about credibility and commitment after the Labour party U-turned on its promise to borrow £28bn-a-year from the beginning of the parliament in order to scale up renewable industry.

‘Doubling down’

The leadership has insisted it is still totally committed to the plan, but has had to scale back commitments in the near-to-medium term as the high cost of borrowing hits against Labour’s fiscal rules (no borrowing to fund day-to-day spending and net debt must be falling as a percentage of GDP at end of rolling five-year period).

When I asked Sir Keir on Monday if the U-turn on the financial commitment in the first half of the parliament showed – as with Brexit, tuition fees, and re-nationalisations – that he can’t be trusted to keep his promises, he said it showed the opposite, that he was “doubling down” on the plan.

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“It is a matter of trust,” he told me. “Rachel [Reeves] – we set out fiscal rules two or more years ago. Inflation is in a completely different place to where it was…but at the same time as we work through our plans and set out what we want to do in years one, two and three, it is clear we can ramp up to that £28bn and when I say to people in the sector, I want clean power by 2030, they don’t say you’re backing down, they say that’s a real challenge.”

On the timing of this announcement, there is of course a risk that Sir Keir’s missions get drowned out by the dramas back in Westminster. There was some discussion about whether to pull the announcement, but in the end Sir Keir decided that he wanted to get on talking about how he might lead Britain than, to quote one ally, get “bogged down in the psychodrama” of what’s going on in Westminster.

“Doesn’t it speak volumes that the Labour Party is today launching a plan for the next generation of jobs, whilst the Tories are squabbling back in Westminster, and the SNP are preaching about promises they’ve broken?” observed the Labour leader when I asked him about the current state of his rivals.

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Sir Keir wants to use these “mission statements” to position himself as a leader-in-waiting as the current prime minister finds his agenda hijacked by the failings of his predecessor and party infighting once more.

But the agenda on Monday is very much about parking Labour’s tanks on the SNP’s lawns too, given that there is no route to Number 10 for Sir Keir that doesn’t go through Scotland. Locating GB Energy in Scotland is designed to firmly park his tanks on the SNP’s lawn.

A poll out over the weekend suggested Labour was on course to take 26 seats in the next general election – an incredible change in fortunes from the single seat it picked up in 2019 – as the departure of Nicola Sturgeon and her subsequent arrest (she was released without charge) over the police probe into SNP finance leaves the party battered and bruised.

“Nicola Sturgeon not being first minister obviously provides a space and an opportunity that simply wasn’t there before,” acknowledges one senior figure.

“But there’s no rule that anybody disillusioned with either the Tories or the SNP necessarily swaps columns to us. Anyone who thinks we can flatline is heading for defeat at the next election. We’ve got to go up at the end, which is why we’re going to continue in this way.”

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