Labour’s green growth plan - and the high cost of getting it wrong.

The cost-of-living crisis remains a real worry for millions of people across the UK. Labour’s critics argue that so far, it has failed to meaningfully get more money into people’s pockets. Talk of tax increases and balancing the books almost certainly hasn’t helped, but the main beneficiary of a lack of results is Reform UK.

Nigel Farage is making hay and continues to promise to ‘fix broken Britain’, scrap net zero policies and revive traditional industries. The cost of living is also uniting those voters whom Labour is losing to the Liberal Democrats and the Greens too.

But, despite this, recent polling suggests that some Reform supporters are not inherently opposed to climate action. Research by thinktank More in Common finds that many actually favour investment in renewable energy, showing it's still an important issue for any political party to address. Although many want reassurances doing so will not make life more expensive.

The challenge the current administration must address is showing that long-term green growth is not only environmentally necessary, but also economically beneficial.

Over the past year, Labour has reinforced its commitment to renewables and decarbonisation. In his new year interview, Keir Starmer emphasised that investing in small modular reactors could boost local economies and create skilled jobs, which Labour argues are essential for building a secure, clean energy system to help Britain thrive. However, the party knows that to stay in power, it must strike a balance by also delivering immediate reductions in energy bills.

Recognising this, in the 2025 Budget, Labour announced that it will subsidise energy bills with average savings of around £150 per household. The party has already pledged to cut energy bills by £300 by 2030.

By shifting policy levies such as the Energy Company Obligation into general taxation, Labour aims to distribute costs more fairly and ease pressure on bill payers, without abandoning support for renewable developers.

The budget also addressed concerns for employment with the Clean Energy Jobs Plan, setting out proposals for recruiting and training more workers for the UK’s clean energy transition. By facilitating the movement of skilled workers into the renewables sector, Labour hopes to counter claims that net zero will cost jobs and stifle growth. Instead, the plan positions green energy as a source of opportunity and resilience.

The task now is to persuade voters that Labour can deliver economic growth through its energy policies while offering relief on the cost of living. Keir Starmer’s big message this week is that his government has taken the hard choices that mean the cost of living will go down this year. Delivering on this promise may well define his political future.