Sir Keir Starmer will on Tuesday declare that Labour is once again “the party of the centre-ground” as the Government was reeling after sparking a full-blown currency crisis.
He was set to quote Sir Tony Blair by claiming Labour was the “political wing of the British people” as he sought to seize from the Tories the reputation of the party of “sound money”.
The words will be seen as an attempt to rebuff Tory allegations that his party is in the pocket of the unions and bury for good the Corbyn era which saw Labour suffer such a humiliating 2019 General Election defeat.
His keynote speech to Labour’s annual conference in Liverpool will be delivered against the backdrop of the pound plunging on Monday to a record low against the dollar after Kwasi Kwarteng’s mini-Budget shocked the markets with £45 billion of tax cuts, a £72 billion debt splurge, followed at the weekend by a signal of more tax cuts to come.
“What we’ve seen from the Government in the past few days has no precedent,” Sir Keir was due to say after the Pound nosedived to around 1.03 dollars in early trading in Asia on Monday, the lowest since decimalisation in 1971, before recovering to 1.06.
“They’ve lost control of the British economy - and for what? For tax cuts for the richest one per cent in our society.”
The Chancellor and new Prime Minister Liz Truss have defended their economic strategy as key to fuelling a dash for growth, insisting that all people will benefit.
Addressing the Labour faithful, Sir Keir was due to go head-to-head against the Government by vowing that Labour would “turn the UK into a growth superpower” and be the party of financial responsibility.
The move aimed to avoid a general election fought, most likely in 2024, by the Tories focusing on economic growth and Labour on public services.
Amid fears that the pound could soon reach parity against the dollar, the Labour leader was set to commit his party to getting the UK “out of this endless cycle of crisis” with a “fresh start”, as the Bank of England’s Monetary Policy Committee faced growing calls to announce an emergency interest rate hike to prop up the pound.
Seeking to combat Labour’s reputation for getting the economy into a financial mess, Sir Keir was due to re-pledge the party to an office for value for money to ensure taxpayers’ money is spent in the national interest.
With the Labour Left now marginalised from power, Sir Keir was seeking to cement the party in the political centre-ground, with echoes of the Blair era which saw it win three elections.
Sir Tony referred to New Labour as the “political wing of the British people” ahead of his landslide 1997 election victory, in a departure from the party being described as the political wing of the union movement.
A Labour spokesman said echoing Sir Tony was an intentional move to show that Labour is “back in the centre ground” and in the “mainstream” of public opinion.
“Ultimately he wants to be the next Labour leader who takes the party from opposition into government,” the spokesman said.
He acknowledged Sir Keir has overhauled the party to distance it from the one which led to two general election defeats under Mr Corbyn, who is sitting as an independent MP as he fights suspension.
“We’ve changed the party to make sure we’re in tune with the instincts and aspirations of the British people once again,” the spokesman said.
One of the changes he highlighted was how Sir Keir opened the party’s conference with a tribute to the Queen, with the singing of the national anthem.
Sir Keir’s strategy to boost growth includes a green prosperity plan to create one million new jobs in towns and cities across the country.
He was committing to begin this mission, to also include bringing down energy bills, raising living standards and tackling the climate crisis, within 100 days of forming a government.
To achieve this, he will say, requires “a different way of working”, developing “the biggest partnership between government, business and communities this country has ever seen”.
Sir Keir will argue “we cannot afford to miss out” on the opportunity to lead the world in renewable energy, electric vehicles and harnessing new hydrogen power.
The Labour spokesman argued the party would borrow less than the Tories.
But the aide conceded that the party was accepting a higher level of borrowing than before the Chancellor’s package of tax cuts last Friday.
Sir Keir is pledging to reverse the abolition of the 45p top rate of tax for the nation’s wealthiest, to fund training more doctors and nurses, but was supporting the reduction of the bottom rate to 19p in the pound.
Shadow chancellor Rachel Reeves has said her fiscal rules set out that increased borrowing is permitted during national emergencies.
