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The National (Scotland)
The National (Scotland)
National
Xander Elliards

'Tone deaf': Austerity fears as Keir Starmer pledges not to 'turn on spending taps'

SENIOR Labour MPs are concerned that Keir Starmer is preparing to sign up to austerity measures after details of an upcoming keynote speech were handed to the media, according to reports.

On Monday, the Labour leader will address the Resolution Foundation conference in a televised address, where he is expected to say: “Anyone who expects an incoming Labour government to quickly turn on the spending taps is going to be disappointed.

“Growth will have to become Labour’s obsession if we are to turn around the economy.”

Starmer has previously said that economic growth would be the top priority for his government, prompting concerns that the cost-of-living crisis facing households across the UK will become an afterthought as he focuses on keeping the business community on side.

The Labour leader’s speech is expected to hammer this home, as he argues that extra funding for public services can only come after growth.

According to a briefing on the speech sent to media on Sunday, Starmer will say: “The Tory record has been a bad bargain for the British people. I want a better bargain for the public – stronger growth, rising incomes, generating the wealth we need to fund our public services. But for that to happen we need to change direction and that’s what my ambition for Britain is all about.”

SNP MP Stewart McDonald raised concerns, saying on social media: “This isn’t just politically tone deaf – the public, including conservative voters, recognise the need to invest in a broken public realm – but is economically tone deaf too.

“It makes the ‘decade of national renewal’ slogan somewhat empty.”

According to the Office for Budget Responsibility, unprotected government departments will see cuts of 4% per year through the next parliament, a number the Resolution Foundation chief executive Torsten Bell called “implausible”.

He added: “It’s hard to think of a more anti-growth policy.”

However, reports in the Guardian say that Labour shadow ministers expect Starmer to stick to these spending limits – though they “hope” any growth will be used to fund additional spending and not to fund tax cuts for business.

The paper quoted one Labour frontbencher as saying: “We can do the departmental cuts as long as we can invest money in things like dilapidated schools, hospitals and roads.”

Writing in The National in November, Modern Money Scotland noted: "Economist Professor Bill Mitchell estimates that, since the late 1990s, the UK's average growth has sat around 1.7% (excluding the pandemic). Mitchell argues that for Labour's growth plan to work, that figure would need to immediately jump to 2.5% within a year, and continue to do so over a five-year timetable.

"With current UK growth sitting at around 0.4%, such an increase is almost impossible – at least without Labour U-turning on their own fiscal rules and drastically increasing government spending."

Elsewhere in his speech on Monday, Starmer is expected to say: “This Parliament is on track to be the first in modern history where living standards in this country have actually contracted. Household income growth is down by 3.1% and Britain is worse off.

“This isn’t living standards rising too slowly or unequal concentrations of wealth and opportunity. This is Britain going backwards.

“This is worse than the 1970s, worse than the recessions of the 1980s and 1990s, and worse even than the great crash of 2008.

“The security blanket, that hard work would be rewarded, sadly no longer exists. The political consensus that if you work hard and play by the rules, you will get on – a glue that binds British society together – has become nothing short of a lie for millions of people."

Suspicions that a Starmer government will bring in a new era of austerity come after the Labour leader praised Margaret Thatcher for “setting loose our natural entrepreneurialism” in an article for the Telegraph.

Intense criticism has followed the comments, which have been read as Starmer aiming to win over traditional Conservative voters at the expense of Labour’s traditional base.

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