- Written by Michael Race
- BBC News business reporter
image source, Getty Images
Sir Keir Starmer is set to warn that Britain will face “significant constraints” on public spending if his party wins the next general election.
He said on Monday that anyone hoping the incoming Labor government would “turn on the spending taps quickly” would be disappointed.
Economic growth will be a battleground for both Labor and the Conservatives in the next election.
The Conservatives claim Labour’s borrowing plans will lead to tax increases.
Chancellor Rishi Sunak has made economic growth one of his key promises.
The cost of living is at the center of political debate in the UK as inflation and high interest rates put pressure on household budgets.
Although the UK is not in recession, there are concerns about slowing economic growth.
Bank of England Governor Andrew Bailey said last week that the UK’s productivity rates were “very worrying”.
Sir Keir will say in a speech to economists and think tanks later on Monday: “If we want to turn the economy around, economic growth has to become Labour’s obsession.”
But he will argue that decisions made by the government and the previous Conservative government over the past 13 years “will constrain what a future Labor government can do”.
“It’s useful to compare 2010 with today,” the Labor leader will say.
“Debt and interest rates are now much higher. Britain’s standing is declining. Growth is stagnant and public services are exhausted.”
“Taxes are higher than at any time since the war, but none of that was the case in 2010. Never before has the British government asked people to pay so much for so little. There was no.”
His comments come after the party rejected claims it could further water down its flagship Green Prosperity Plan.
One executive suggested to the BBC that it may never reach its previously promised level of investment of £28bn a year.
In June, shadow chancellor Rachel Reeves watered down that pledge. A senior Labor Party leadership official said the decision was taken because of the financial situation.
But a Conservative Party spokesperson said Labour’s policies “posed significant risks” to the UK economy at a time when borrowing costs were “very high”.
Conservative Party chairman Richard Holden said: ‘The biggest ‘constraint’ on economic growth will be Labour’s £28bn a year borrowing plan, which independent economists believe will lead to a rise in inflation, interest rates and people’s taxes. “We are warning that it will rise,” he said.
As well as focusing on growth, Sir Keir will outline plans including “changing restrictive planning laws and restructuring the UK” and developing “an appropriate industrial strategy developed with business”. .
He also said Labor would “increase mental health support, fully fund a plan to reduce NHS waiting lists, abolish zero-hours contracts, abolish redundancy and rehiring, and create a new working wage with a real living wage”. He plans to declare that he will secure a “consensus.” .
Sir Keir will say that the current parliament is “on track to become the first parliament in modern history where living standards in this country have actually fallen”.
The latest official figures show the economy did not grow between July and September as successive interest rate hikes raised borrowing costs.
Treasurer Jeremy Hunt announced several tax cuts in his Autumn Statement.
However, the decision does not prevent taxes from remaining at record levels and economic growth is expected to slow.
Sir Keir will also say in his speech that “‘any growth’ is not good”.
“No, we can no longer be complacent about the kind of growth we pursue. The growth we need must better serve working people and improve living standards in all communities.” “There must be,” he would argue.