Sir Keir Starmer came under fire after performing a major U-turn on one of Labour’s key economic policies.
Labour has backtracked on its flagship “green prosperity plan” to pour huge sums into climate-friendly investments.
The party had promised to invest £28bn every year on green initiatives if it wins the next election.
Rachel Reeves said she wanted to become Britain’s “first green chancellor” and cited inspiration from US President Joe Biden.
But the shadow chancellor said today Labour would instead work toward the £28bn figure – blaming the Conservatives for “crashing the economy and driving up interest rates”.
The promise had come under fire over fears the scale of the borrowing would drive up interest rates.
And Labour’s plan – which would amount to a total of £140bn in borrowing – raised questions about whether the party would stick to its so-called fiscal rules. Labour has promised if elected to bring down debt as a share of total economic output.
Pressed on whether the £28bn figure was no longer realistic, Ms Reeves said Labour will instead “ramp up” to that level of investment. “We will get to the £28bn, it will be in the second half of the first Parliament. But we will get to that £28bn,” she said.
Ms Reeves said in the last two years “the Tories have crashed our economy”. “As a result, interest rates have gone up 12 times, inflation is now at 8.7pc,” Ms Reeves told the BBC.
She denied being “frightened of the bond markets”, insisting that the U-turn shows “Labour can be trusted with the public finances”.
Ms Reeves added that everything Labour does in government will be “built on a rock of economic and fiscal responsibility”.
But Tory MPs lashed out at Labour, accusing the party of “flip-flopping” and claiming “yet another Labour plan does not add up”.
Craig Mackinlay told The Independent: “Sir Keir’s flip-flops are certainly out for the summer with the barely two week old £28Bn ‘Green Prosperity’ plan ditched.
“Green and prosperity are two words which do not sit together. Not only would the new spending add to national debt, it would be inflationary and entirely wasteful.
“Voters do not believe it and do not want to pay for it. Controlling economies never ends well.”