Labour’s economic plan will take years to deliver, Keir Starmer says | Labour
Keir Starmer has said it will take years for Labour’s economic plan to be fully delivered as he seeks to regain the narrative following the tumultuous response to last week’s budget.
In an article for the Guardian, the prime minister lashed out at his political opponents, insisting that chancellor Rachel Reeves was right to impose tax increases worth £26bn.
He also promised a long-term plan that he said should be considered at the end of parliament.
Starmer’s comments form part of a wider intervention designed to strengthen his and Reeves’ position after days of debate over whether the Chancellor should raise taxes to the highest levels on record.
The Conservatives have called for Reeves to resign amid accusations that he misled voters after warning of the impact of low growth forecasts by the Office for Budget Responsibility (OBR).
On Monday, Starmer will give a speech refuting these claims and laying out a multi-year economic plan based on deregulation, more welfare reform and closer European ties.
He writes: “We will renew Britain by offering a big, bold, long-term plan rather than a series of quick fixes. To regain control of our future, we must become a serious people again, with a serious government, who can do hard things together.”
“With a clear mission to renew our economy, our communities, and our state, we will deliver the change we promised and be judged accordingly at the next election.”
Rebutting his political opponents, Starmer adds: “We will only take on those on the left and right who are complaining and whose approach will lead to further decline. Because let me be clear – turning on the borrowing taps or taking us back to austerity – that is the politics of regression and I will not accept it.”
In his speech, Starmer will promise both further deregulation (as he asks business secretary Peter Kyle to look at ways to make it easier to build major infrastructure projects) and a new initiative to overhaul the welfare system.
When the Prime Minister tried to cut disability benefits in the summer, he was rebuffed by his own supporters.
But former health secretary Alan Milburn has recently been asked to examine the role of mental health problems and disability in youth unemployment, while social care minister Stephen Timms is continuing his wider review of disability payments.
Starmer will say on Monday: “We must reform the welfare state itself – that is what renewal requires.
“Now this is not about supporting the broken status quo. And not because we want to appear politically ‘tough’. The Conservatives played this game and the welfare bill increased by £88bn.”
She adds: “If you don’t get the support you need to overcome your mental health issues, or are written off because of neurodivergence or disability, it can trap you in a decades-long cycle of unemployment and addiction.”
Starmer and Reeves have had a tough few days since the Chancellor delivered his second budget, in which he introduced a series of different taxes and extended a freeze on income tax and national insurance thresholds to cover rising welfare spending and create a bigger buffer against his fiscal rules.
The package was well received by markets, with Britain’s borrowing costs falling to their lowest level this year, and Labor MPs welcoming the end of the two-child benefit limit.
But the chancellor has been accused of misleading voters about the real reason for increasing taxes.
Reeves said he needed to act before the budget because official forecasters were prepared to lower their assumptions about how efficient Britain’s economy is and how productive it will be in the future.
But in the end, this downgrade was more than canceled out by the expected pay rise and a separate increase in tax revenues, leaving the chancellor with a small surplus.
Reeves’ opponents and even some colleagues complained that he continued to blame the OBR for expected tax increases even after learning there were no shortfalls.
A cabinet minister told the Times on Sunday: “Cabinet was never briefed on the reality of the OBR forecasts. If we had been told, we might have advised against employing income tax rabbits and not giving the public the impression that we were complacent about our manifesto commitments.”
Reeves defended his decisions on Sunday in the face of calls to resign from Conservative leader Kemi Badenoch.
The Chancellor told BBC One with Laura Kuenssberg on Sunday: “I know some have suggested that there was a small surplus that the OBR published on Friday.
“But if I were on this program today and said that £4bn more was good, that there was no economic repair work to be done, I think you would rightly say that that is not good enough.”
But Badenoch said on the same programme: “The Chancellor held an emergency press conference telling everyone how bad the financial situation was and now we have seen the OBR tell him the exact opposite. That’s why I believe he should resign.””
The Tory leader, who will speak about the economy at a separate event on Monday morning, also defended his harsh criticism of Reeves last week, accusing the chancellor of “wounding in self-pity, whining about misogyny and slander”.
Reeves said on Sunday that the personal nature of the attack “disturbed” him but Badenoch refused to back down, telling the BBC: “My job is to hold the government to account, not to provide emotional support to the chancellor.”
The Conservatives plan to bring Reeves to the House of Commons on Monday and demand from him “a full and honest explanation of his actions”.
Labor aides fear the debate over tax rises could negatively impact measures the chancellor has announced to ease the cost of living, including removing green taxes from energy bills.
Post-budget polling from the organization More in Common found that the budget did not change voters’ views on Reeves’ competence.
Before last week, 61 percent of voters said they thought the Chancellor was doing a bad or very bad job of managing the economy. After the budget, this rate became 60 percent.
