Keir Starmer leans over an open newspaper and points out a picture of him and the shadow chancellor, Rachel Reeves, holding hi-tech rivet guns while touring a design lab.
“I’ve had a few shadow cabinet ministers ask me if this is how we’re going to get them to stick to fiscal discipline,” he jokes, before an interview with the Guardian in his constituency office in Camden, north London.
The Labour leader has spent much of the last few days promising how careful he would be with the public finances should he end up in No 10 after the next election. But while he aims to burnish Labour’s reputation for economic competence, the UK’s cash-starved public services are at breaking point.
Some in his party are anxious that his vow not to brandish a “big government chequebook” means schools and hospitals will not get the funding they need. But Starmer, despite his insistence on fiscal prudence, rules out a return to austerity under a Labour government.
“Look, I’ve always made the case against austerity,” he says. “I’m against austerity. But I know we’re going to have to be fiscally disciplined.”
While he acknowledges that schools, the NHS, courts and the police will all need more funding, every spending commitment will be fully costed. He denies he is trying to have it both ways. “That’s why we’ve made choices,” he says, citing plans to scrap non-dom tax status to fund training for more nurses and doctors.
Starmer is looking to growth to provide extra money for public services. “It’s very important that our message on fiscal discipline is heard,” he says. “We’re going to inherit a really bad situation. The economy has been really badly damaged over 13 years of low growth.
“The question Rachel [Reeves] and I have focused on is how we grow the economy. If growth the last 13 years had been at the same rate as the last Labour government, we’d have tens of billions for public services without raising a single penny more in tax.”
He denies Labour is planning a wealth tax, saying there is “not much scope” for rises with overall tax so high – but admits dividends and rental income are the “sort of things” it could consider, rather than savings or property.
“We’ve never said that we would introduce wealth taxes, we’ve said that we need a fair taxation system. It means looking at different forms of taxation that aren’t heavily dependent on the wage people earn,” he says.
“But – and it’s a big ‘but’ in capital letters – we have got the highest taxation burden since the war, and the idea that there’s much scope for tax increases is wrong, which is why we’ve put our focus on growing the economy.”
Starmer’s plans for reform have caused alarm in his party. Yet he is worried they have not “come through strongly enough”. He adds: “Obviously I know that if you put more money into public services they will improve, but I also know that reform will bring improvements.
“In the NHS, obviously, everybody always has the question, ‘Does that mean the private sector?’ I don’t shy away when it comes to things like waiting lists – we’ll use whatever we can to get those down. But the reform I’m talking about goes way beyond that. We’re all living longer. We’ve got to move to a preventive model.”
Another change he wants is devolution, giving people more control over their lives, but he acknowledges that handing power to local communities needs to be accompanied by funding. Reeves, however, has ruled out giving tax-raising powers to councils.
Starmer defends Labour’s decision to use Vote Leave’s “take back control” slogan for devolution plans, insisting Brexiters can have faith he understands why they voted to leave the EU, despite being one of the biggest advocates of remain and a second referendum.
“I’ve always understood that plea for change,” he says. “I don’t quarrel with the argument that people need more control in their lives. Obviously I campaigned for remain but I don’t argue that we should have the sort of change the many people who voted Brexit are crying out for.”
Despite the economic damage of Brexit, Starmer is sticking resolutely to his line that he would get a better deal from the EU, presumably in the belief that going further would be electoral suicide. “We’ve left the EU and there’s no case for going back. But we will improve the deal we’ve got.”
He is equally careful about small boats – reiterating there needs to be more cross-border work tackling criminal gangs trafficking people across the Channel. He criticises the broken asylum processing system, and underlines the need to make sure existing safe routes are working, particularly from Afghanistan.
Starmer is philosophical about his new year push being overshadowed by the royal psychodrama around Prince Harry’s book, saying last week’s speech was just the latest staging post in getting ready for government.
“I haven’t read the Harry stuff other than what’s come into the hands of the Guardian,” he says. “It’s obvious that gets attention, of course it does. But this was not a one-off speech, it was laying out what we’re going to be doing in 2023.
“The impatience for change is palpable. The public is fed up with being asked to suck it up. They want the hope and reassurance that change is possible and change is coming.”
Despite the media storm around Harry, Starmer refuses to comment directly, simply saying: “I still don’t think wading into private matters of the royal family is where politicians should be.”
Starmer, who is approaching three years as leader of the opposition, has big plans for this year. He feels, having transformed Labour since the days of Jeremy Corbyn and attacked government failings over the last year, he has earned his party a hearing.
“We’ve done hard work on changing the party, we’ve done hard work on exposing the Tories as not fit to govern. As we turn into a new year, we don’t rest on our laurels, we press on. We set out the case for a bold, reforming Labour government.”
But what would that government look like? Starmer has faced criticism for not yet setting out what Labour would do with power. “Look, of course people are impatient for change when you have 13 years of failure. But we have to build the foundation for it.”
He wants to “gently push back” at the idea Labour has not already set out any policies – the biggest so far is a £28bn a year green investment commitment – but admits the party needs to “build on” those they have already put forward.
Starmer will set out more policy detail over the next three months, saying that Labour is doing a “huge amount of work” to prepare for government, and that by this time next year everybody will know exactly what it would do in power.
“There were plenty of people urging me from day one: set out your plan for government. I resisted because I knew we could only do it if we got to this stage.” But he does not like complacency, and at every shadow cabinet meeting says the party has to fight like it is five points behind in the polls, rather than 20 ahead.
Labour will have a 1997-style pledge card in the run-up to the next election, he confirms. “Yes, I want to be clear going into the election that if you vote Labour you will get ABCDE or whatever it may be.” The manifesto will be “short, sharp” and “tell a story about the future of the country”.
Is Labour ready for government? “Yes,” he replies immediately, adding that his party has gone through a “shift in mindset” from opposition to government in waiting. Shadow ministers are receiving training from the Institute for Government and Starmer talks regularly to Tony Blair and Gordon Brown.
He also gets tips from the leaders of Labour’s sister parties abroad who have recently won elections, including the German chancellor, Olaf Scholz, and the Australian premier, Anthony Albanese. Aides have observed the US midterms. “By the time we hit that election we need the best campaigning team that the Labour party has ever seen,” Starmer says.
Would he welcome back big Labour beasts of the past? Douglas Alexander is one former cabinet minister trying to become an MP. Starmer says he would be “very relaxed” about David Miliband, once tipped as the next Labour inhabitant of No 10, returning to the fold.
“Of course I’m keen to use whatever experience there is,” he says. “There are good people of the past who want to run again. But there are really brilliant people of the future too.”
