Labour’s green revolution plan may stretch its economic promises

Good morning. The Westminster press corps packs its bags to report on Rishi Sunak’s two-day visit to Washington, which leaves later today. There’s the meeting with Joe Biden, of course, and conversations with business and congressional leaders, but the coverage leading up to the trip has focused more on whether the cricket-loving (and very image-conscious) prime minister will deliver the ceremonial opening pitch at tomorrow night’s Washington Nationals baseball game. It’s a risky strategy if he doesn’t aim well. More on the visit and Labour’s sort of Bidenomics below, plus the latest on the affected CBI’s vote of confidence.

That’s it from me – my colleague and Scotland correspondent Lukanyo Mnyanda will be in your inbox tomorrow.

Something borrowed, something blue

Sunak’s visit to DC will force him to confront Bidenomics, the first US policy to bolster domestic production in key industries, reduce exposure to China and provide huge subsidies for green energy development. technologies.

My colleague Gideon Rachman, in his column today, laid out the thinking behind the Biden strategy and the challenges it poses for the west.

Gideon also refers to Jake Sullivan’s April speechthe US national security adviser, who carefully studied Sunak prior to the visit: it is the clearest statement yet of the Biden plan.

Labour’s conscious effort to copy aspects of Biden’s economic strategy is the premise for a major series in the Financial Times this week, anchored by my colleague Jim Pickard, on the Starmer project and how the opposition party is preparing for a government. Today we published the first part.

Over the next few days, the FT’s Labor-watching supremo will walk you through the policies that appear to define a Starmer premiership – if he wins – concluding that it could be more radical than many people think.

There’s a raft of labor law reforms, a pledge to tear up the planning system, and major constitutional amendments, but the most notable part of Starmer’s plan is Labor’s own version of Biden’s Inflation Reduction Act, the “green wealth plan.”

We reveal how the bond market has not yet fully digested the potential size of borrowing the plan entails – Labor has pledged to spend £28bn a year on a green revolution – and warns that this could lead to rising borrowing costs.

Indeed, as we report, Starmer and Rachel Reeves, Shadow Chancellor, are starting to sound a little concerned that they’ve been a little too radical in this regard; after all, the green prosperity plan was announced in September 2021 when the interest rate was 0.1 percent.

Reservations are enough now. Reeves argues that the plan to invest in projects such as nuclear power, wind power and carbon capture has always been conditional on the loan meeting Labour’s fiscal rule that debt must fall after five years as part of national income.

There is also an acknowledgment that spending should build up over a number of years and also a footnote saying that if the Tories increased spending on green projects before the election, that spending would be deducted from the Labor plan.

Nevertheless, the plan will be the largest economic project of a Starmer administration. Reeves hopes, as she explained to me last week during a visit to Washington, that this kind of industrial policy is part of an “emerging global consensus”.

She wants to swim with the tide of Bidenomics and hopes that the US president will then work with Britain and other allies to create a new network of supply chains with democratic countries, bypassing China’s security threat.

As Ed Miliband, the former Labor leader and climate change spokesman, told Jim, “I think we have a lot to learn from Biden’s example.”

Later in the week we’ll look at other aspects of what a Labor government might look like, along with the story of how Starmer transformed his party, including staging a brutal purge of Corbynite election candidates.

There will be a guide to all the major policies and a very handy cut-and-hold guide (when people still cut stuff out of newspapers) on the key people who would make up a Starmer administration.

And Chris Giles, our economics editor, will look at the economic legacy Starmer could expect next year if he took to Downing Street. Spoiler alert: it doesn’t look too good.

Cleaning house

Westminster will be paying close attention today to the crucial vote of confidence in the CBI’s business lobby group, which has been pushed close to the brink following allegations of sexual misconduct.

Rishi Sunak has ordered ministers and officials to avoid contact with the CBI as it tries to sort itself out, while Britain’s Chambers of Commerce are nimble in the wings to provide an alternative voice for the UK’s biggest companies.

Interestingly, the government has been unwilling privately or publicly (as far as I can see) to put an arm around the group in its hour of need.

The basic display is: “Wait and see.” Labour’s shadow business secretary, Jonathan Reynolds, offered a little more support on Sunday, holding the door open to a renewed partnership with the CBI, telling the BBC: “I think this country needs an important national business voice that includes all of the different parts of the economy.”

At an extraordinary general meeting later, CBI member companies will be asked to vote on whether proposed changes to the organization’s leadership, governance, culture and lobbying give them the confidence to support it.

Try this now

If you thought the phrase “government at odds with BBC” is of recent coin, head to London’s Donmar Warehouse for a timely retelling of history.

Got a sneak peek at Jack Thorne’s latest drama last night When Winston went to war with the Wirelessdirected by Katy Rudd, in which a Tory government struggles for control of the media narrative as the nation is hit by strikes.

Adrian Scarborough and Haydn Gwynne entertain themselves as Winston Churchill and Stanley Baldwin as they battle against the general strike, while Stephen Campbell Moore portrays a conflicted John Reith.

Stephen Bush sets the cultural bar so high I thought I should give one more tip before I go: If you haven’t seen it yet, watch the new movie Realityone of the most gripping and quietly chilling films of the year.

Based entirely on the actual transcript of an FBI interrogation of a female suspect in a national security investigation, the dialogue is both banal and ominous, the domestic setting both familiar and sinister.

The suspect is actually referred to as Reality Winner for convenience. As Danny Leigh wrote in the FT, “If you see a better movie this year, consider yourself blessed.”

Top stories today

• Tory MP charged with racially aggravated public order offence | Conservative MP Bob Stewart has been charged with two public order offenses in connection with a racist incident in London last December. He will not have the Conservative party whip suspended for the time being, experts say.

• Sunak defends asylum boats | The UK has chartered two more floating barges to house asylum seekers, Rishi Sunak said yesterday, as he doubled down on his pledge to prevent people from entering Britain on small boats.

• Albanian approval | Albania’s leader praised Sunak for tackling cross-Channel migration with hands-on cooperation rather than spending money on “crazy things that never work” like his predecessors.

• Basket with expensive goods | High food inflation pushed up UK grocery spending last month, prompting many consumers to cut back on discretionary purchases, according to retail data released today.