Keir Starmer’s economic plan risks him looking more like a David Cameron tribute act than an heir to Blair

Published

2 years ago

December 4, 2023

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For years we’ve all been hearing from Sir Keir Starmer about how our public services are on their knees and things need to change.

Now what we are hearing is that an incoming Labour government isn’t going to be able to do much to fix it – in the short term at least.

In a speech today Sir Keir Starmer stressed the fiscal situation an incoming Labour government will inherit from the Conservatives is worse than what was served up to the David Cameron government in the austerity years.

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“Compared with 2010, now debt is much higher, interest rates are much higher, growth is stagnant, Britain’s standing diminished,” Sir Keir told his audience at the Resolution Foundation event. “Public services on their knees, inflationary pressure, serious. Taxes higher than any time since the war.”

Laying it on thick when it came to the economic outlook, it was sort of inevitable that he dodged the question when I asked him if he could at least commit to not cutting public service spending further after the next election. And all of it left me asking myself the question: Vote Labour, get Tory austerity?

That’s because the nod to Margaret Thatcher over the weekend, coupled with his warnings over the economy, made the Labour leader, who was once thought to be the heir of Jeremy Corbyn or perhaps Tony Blair, now looking distinctly like a David Cameron/George Osborne tribute act.

If his reference to the vision of Thatcher provoked a backlash from Labour supporters, his refusal to at least commit to investing in public services – beyond the modest sums Labour have found for the NHS and schools, by closing the non-dom tax status and charging VAT on private schools – is likely to leave many in despair.

Talk to those around the Labour leader and they say the comparison isn’t fair. Starmer, they argue, isn’t making a political argument to “shrink the state” and “hollow out public services” as George Osborne did in 2010, but rather Starmer and his shadow chancellor Rachel Reeves are acting out of “economic necessity”.

“There’s been no growth and debt has gone up,” says one key Labour figure. “Spending levels of the past are not possible. Labour used to talk about how to cut up the pie in a fairer way, but there are no pies left and the oven is broken. Growing the economy is top priority.”

For those who see public services on their knees, the failure of commitment to investment will perhaps come as a blow. Labour countenance that, with the highest tax burden in 70 years, taxing more is not the solution. Instead, Starmer and his allies hope that investment into the UK economy will be “swift” and within the first term Labour will be able to begin investing again in public services.

If it all sounds gloomy, it’s because it is. While the last Labour team under Corbyn promised billions of public spending, this team, with the COVID debt pile in its rearview mirror, are promising us not much at all beyond having more defined “missions” and being prepared to reform the planning system or the NHS.

When you are already 20-plus points ahead in the polls, you perhaps don’t need to make many promises, particularly when the Conservatives are already hammering Labour on its one big-ticket spending item – borrowing up to £28bn a year by the end of this parliament to invest in green infrastructure, which they claim will only serve to push up tax and debt.

Labour insiders tell me that Starmer and Reeves will set out their plans for public spending after the budget when we are closer to an election. But if the Labour leader decides to mimic what Brown and Blair did in 1997 and stick to Conservative spending plans, prepare for further public spending cuts. The jury’s still out on whether Starmer will really do that – but he’s certainly rolling the pitch for that option.

Politics

Another tantrum from the Labour backbenches is inevitable

Published

10 hours ago

July 6, 2025

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Rachel Reeves hints at tax rises in autumn budget after welfare bill U-turn

In common with many parents across the country, here’s a conversation that I have with my young daughter on a semi-regular basis (bear with me, this will take on some political relevance eventually).

Me: “So it’s 15 minutes until your bedtime, you can either have a little bit of TV or do a jigsaw, not both.”

Daughter: “Ummmm, I want to watch TV.”

Me: “That’s fine, but it’s bed after that, you can’t do a jigsaw as well.”

Fast-forward 15 minutes.

Me: “Right, TV off now please, bedtime.”

(Pause)

Daughter: “I want to do a jigsaw.”

Now replace me with the government, the TV and jigsaw options with axing welfare cuts and scrapping the two-child cap, and my daughter with rebellious backbenchers.

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That is the tension currently present between Downing Street and Labour MPs. And my initial ultimatum is the messaging being pumped out from the government this weekend.

In essence: you’ve had your welfare U-turn, so there’s no money left for the two-child cap to go as well.

As an aside – and before my inbox fills with angry emails lambasting me for using such a crude metaphor for policies that fundamentally alter the lives of some of the most vulnerable in society – yes, I hear you, and that’s part of my point.

For many in Labour, this approach feels like the lives of their constituents are being used in a childish game of horse-trading.

So what can be done?

Well, the government could change the rules.

Altering the fiscal rules is – and will likely remain – an extremely unlikely solution. But as it happens, one of Labour’s proverbial grandparents has just popped round with a different suggestion.

A wealth tax, Lord Neil Kinnock says, is the necessary outcome of the economic restrictions the party has placed on itself.

Ever the Labour storyteller, Lord Kinnock believes this would allow the government to craft a more compelling narrative about whose side this administration is on.

That could be valuable, given one of the big gripes from many backbench critics is that they still don’t really understand what this prime minister stands for – and by extension, what all these “difficult decisions” are in aid of.

The downside is whether it will actually raise much money.

The super-rich may have lots of assets to take a slice from, but they also have expensive lawyers ready to find novel ways to keep their client’s cash away from the prying eyes of the state.

Or, of course, they could just leave – as many are doing already.

In the short term, the future is a bit easier to predict.

If Downing Street is indeed now saying there is no money to scrap the two-child cap (after heavy briefing in the opposite direction just weeks ago), an almighty tantrum from the backbenches is inevitable.

And as every parent knows, the more you give in, the harder it becomes to hold the line.

Politics

UK restores diplomatic ties with Syria

Published

16 hours ago

July 6, 2025

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The UK has re-established diplomatic ties with Syria, David Lammy has said, as he made the first visit to the country by a British minister for 14 years.

The foreign secretary visited Damascus and met with interim president Ahmed al Sharaa, also the leader of the rebel group Hayat Tahrir al-Sham (HTS), and foreign minister Asaad al Shaibani.

It marks the latest diplomatic move since Bashar al Assad’s regime was toppled by rebel groups led by HTS in December.

In a statement, Mr Lammy said a “stable Syria is in the UK’s interests” and added: “I’ve seen first-hand the remarkable progress Syrians have made in rebuilding their lives and their country.

“After over a decade of conflict, there is renewed hope for the Syrian people.

“The UK is re-establishing diplomatic relations because it is in our interests to support the new government to deliver their commitment to build a stable, more secure and prosperous future for all Syrians.”

The Foreign, Commonwealth and Development Office has also announced a £94.5m support package for urgent humanitarian aid and to support the country’s long-term recovery, after a number of British sanctions against the country were lifted in April.

While HTS is still classified as a proscribed terror group, Sir Keir Starmer said last year that it could be removed from the list.

The Syrian president’s office also said on Saturday that the president and Mr Lammy discussed co-operation, as well as the latest developments in the Middle East.

Since Assad fled Syria in December, a transitional government headed by Mr al Sharaa was announced in March and a number of western countries have restored ties.

In May, US President Donald Trump said the United States would lift long-standing sanctions on Syria and normalise relations during a speech at the US-Saudi investment conference.

He said he wanted to give the country “a chance at peace” and added: “There is a new government that will hopefully succeed.

“I say good luck, Syria. Show us something special.”

Politics

Secret Service seizes $400M in crypto, cold wallet among world’s largest

Published

18 hours ago

July 6, 2025

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Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service quietly amasses one of the world’s largest crypto cold wallets with $400 million seized, exposing scams through blockchain sleuthing and VPN missteps.