Labour’s bold green revolution plan is set to challenge economic boundaries

Good morning. The Westminster press corps is packing up to cover for Rishi Sunak two-day visit to Washington, leaving later today. There’s the meeting with Joe Biden, of course, and the talks with business and congressional leaders, but pre-trip coverage has been more focused on whether the cricket-loving (and very image-conscious) prime minister will execute the ceremonial opening pitch at the Washington Nationals baseball game tomorrow night. It’s a risky strategy if his aim is shaky. More on Bidenomics’ visit and Labor tension below, plus the latest on the stricken CBI’s decisive confidence vote.

That’s all from me: my colleague and correspondent from Scotland Lukanyo Mnyanda will be in your mailbox tomorrow.

Something borrowed, something blue

Sunak’s visit to Washington will force him to confront Bidenomics, the first US policy aimed at strengthening domestic production in key industries, reducing exposure to China and allocating huge subsidies for the development of green technologies.

My colleague Gideon Rachman laid out the thinking behind the Biden strategy in your column today and the challenges it poses to the West.

Gideon also references Jake Sullivan’s April speechthe US national security adviser, whom Sunak studied carefully before the visit: it is the clearest exposition so far of the Biden plan.

Labour’s conscious effort to copy aspects of Biden’s economic strategy is the starting point for a major Financial Times series this week, hosted by my colleague Jim Pickard, on the Starmer Project and how the opposition party is preparing for the government. Today we released the first episode.

Over the next few days, the FT’s supreme Labor watcher will walk you through the policies that look set to define a Starmer premiership – if he wins – with the conclusion that he may be more radical than many think.

There are a series of labor law reforms, a promise to dismantle the planning system and significant constitutional changes, but the most surprising part of Starmer’s plan is the Labor version of Biden’s Inflation Reduction Act, the “plan of green prosperity”.

We reveal how the bond market hasn’t fully digested the potential scale of borrowing the plan would entail: Labor has pledged to spend £28bn a year on a green revolution – and warnings that it could lead to increased borrowing costs.

Indeed, as we report, Starmer and Rachel Reeves, shadow chancellor, are starting to seem a little concerned that they have been a little too radical in this regard; the green prosperity plan, after all, it was announced in September 2021 when interest rates were at 0.1%.

Warnings now abound. Reeves says the plan to invest in projects such as nuclear, wind and carbon capture has always been conditional on borrowing complying with Labour’s tax rule that debt must fall as a share of national income after five years.

There is also an acknowledgment that spending should build up over a number of years and furthermore, a footnote saying that if the Conservatives embark on more green project spending before an election then that spending would deducted from the Labor plan.

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

He wants to swim with the Bidenomics tide and hopes the US president will then work with Britain and other allies to create a new supply chain network with democratic countries, bypassing the security threat posed by China.

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

Later in the week we’ll look at other aspects of what a Labor government could look like, as well as tell the story of how Starmer turned his party around, including staging a ruthless purge of Corbynite election candidates.

There will be a guide to all the key policies and a very useful clip-and-keep guide (if people actually cut things out of papers still) on the key people who would shape a Starmer administration.

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

Clean the house

Westminster will pay close attention today to the decisive vote of confidence in business lobby group CBI, which has been pushed close to the edge after allegations of sexual misconduct.

Rishi Sunak has ordered ministers and officials to avoid contact with the CBI as it tries to settle down, while UK Chambers of Commerce prepare behind the scenes to offer an alternative voice to the UK’s biggest companies.

Interestingly, the government has not wanted, privately or publicly (as far as I can see), to throw an arm around the group in their time of need.

The basic view is: “Wait and see”. Labour’s Jonathan Reynolds, shadow business secretary, offered a little more support on Sunday, holding the door open to re-engage with the CBI, telling the BBC: ‘I think this country needs a significant national business voice that encompasses all the different parts of the economy”.

Next, in an extraordinary general meeting, companies that are members of the CBI will be asked to vote on whether proposed changes to the organization’s leadership, governance, culture and lobbying activities give them the confidence to support it.

Now try this

If you thought the term ‘government at loggerheads with the BBC’ was a recent coinage, head to London’s Donmar Warehouse for a timely retelling of the story.

I saw a preview of Jack Thorne’s latest drama last night When Winston went to war with radiodirected by Katy Rudd, which features a Tory administration wrestle for control of the media narrative as strikes sweep across the nation.

Adrian Scarborough and Haydn Gwynne revel as Winston Churchill and Stanley Baldwin as they vie for the general strike, while Stephen Campbell Moore plays a conflicted John Reith.

Stephen Bush has set the cultural bar so high that I thought I’d offer one more piece of advice before you go: if you haven’t seen it yet, check out the new film Realityone of the most gripping and quietly chilling films of the year.

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

The suspect, conveniently, is actually named Reality Winner. Like Danny Leigh wrote in the FT: “If you see a better movie this year, consider yourself lucky.”

Today’s best stories

• Conservative MP charged with racially aggravated public order offence | Conservative MP Bob Stewart has been charged with two public order offences relating to a racially aggravated incident in London in December of last year. At the moment he will not have the Conservative party’s whip suspended, according to sources familiar with the matter.

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

• Albanian approval | The Albanian leader praised Sunak for addressing the cross-Migration of channels with practical cooperation rather than spending money on “crazy stuff that never works” like its predecessors.

• Basket of expensive goods | High food inflation pushed up food spending in the UK last monthprompting many consumers to cut back on discretionary purchases, according to retail sector data released today.