Sir Keir Starmer has indicated he does not want to cut spending if Labour forms the next government – although he did not explicitly rule it out.
The Labour leader said that while he was “not in the business of cutting funding”, his party would inherit a “very difficult situation” if it wins the next election.
Sir Keir was asked by Sky News’ political editor whether he could reassure his party’s supporters that although he would not turn on the “spending taps”, he would not oversee spending cuts to government departments.
Sir Keir said he was a “massive believer in public services”, adding: “I’m certainly not in the business of cutting the funding, which is why the focus is so much on growth.”
But he went on to stress that public services “need reform”, and that injecting more cash into them did not necessarily equate to a better service.
“There’s the question of how much money you put in, but there’s equally the question of whether you’ve got the wherewithal to carry out the reform that is desperately needed,” he said.
More on Keir Starmer
Related Topics:
Asked whether he could reassure voters that he would not oversee a new age of austerity, Sir Keir replied: “If you look at the record of Labour in government, what you see is a record of investing in our public services.
“The austerity is something of this government. This is the road down which they want [to go].”
Advertisement
However, he warned that his government would “inherit a very difficult situation”.
The Labour leader warned that his government would not be able to “turn on the spending taps” and would instead focus on growth and be “ruthless” when it came to fiscal responsibility.
‘The sums don’t add up’
However, Chancellor Jeremy Hunt called Labour’s £28bn-a-year spending pledge on the green transition “economically illiterate” – which Sir Keir has said is dependent on growth and subject to fiscal rules.
“It is economically illiterate to say you can meet a fiscal rule to get debt falling whilst at the same time increasing borrowing by £28bn a year,” Mr Hunt said. “The sums simply don’t add up.
“The result of that kind of borrowing splurge would be higher taxes, higher debt interest and lower growth – on the very day Sir Keir Starmer said growth would be his ‘obsession’.”
In a major speech hosted by the Resolution Foundation thinktank, Sir Keir said the current state of the public finances would place “huge constraints” on what Labour can spend on public services.
It follows a report by the thinktank which found that the UK has experienced 15 years of relative decline, with productivity growth at half the rate seen across other advanced economies, while wages have flatlined, costing the average worker £10,700 a year in lost pay growth.
The Resolution Foundation report also found that living standards of the lowest-income households in the UK are £4,300 lower than their French counterparts.
Starmer defends Thatcher praise after criticism
Sir Keir made his speech today after an article he wrote in The Telegraph generated controversy for its praise of former Tory prime minister Margaret Thatcher.
The Labour leader defended his article, in which he credited the late former Tory prime minister for bringing about “meaningful change” in the UK and “setting loose our natural entrepreneurialism” during her 11 years in Downing Street.
The remarks have angered some MPs on the left of his party, with one telling Sky News they believed it meant Sir Keir “intends to govern without any real political project of his own”.
Image: The then prime minister, Margaret Thatcher, in 1980
Taking questions from reporters, Sir Keir said: “What I was doing at the weekend in the article I wrote for The Sunday Telegraph was distinguishing between particularly post-war leaders – those leaders, those prime ministers – who had a driving sense of purpose, ambition, a plan to deliver and those that drifted.
“So I was giving Margaret Thatcher as an example of the sort of leader who had that mission and plan. That’s obviously different to saying I agree with everything that she did.”
Please use Chrome browser for a more accessible video player
7:23
McFadden defends Starmer comments
‘I would say to Keir Starmer, think again’
Speaking to Sky News, Christina McAnea, the general secretary of the Starmer-supporting union Unison, said it was a “mistake” not to invest in public services.
“I think investing in public services helps to grow the economy,” she said.
“I think we’ve seen what’s happened of 13 years of austerity – it hasn’t done anything for growth in the country.”
Ms McAnea said she believed Mr Hunt’s autumn statement “looks like a booby trap” for the Labour Party regarding whether they would reverse the announced tax cuts.
“We have our own views about how they can raise money and make taxation fairer, and that would help fund lots of services in this country,” she continued.
“So I would be certainly saying to Keir Starmer, think again about some of this.”
“Return hubs” that would see Britain send failed asylum seekers to another country have been endorsed by the UN’s refugee agency.
There have been reports that Sir Keir Starmer’s government is looking into deporting illegal migrants to the Balkans.
According to The Times, Home Secretary Yvette Cooper met the UN’s high commissioner for refugees last month to discuss the idea.
It would see the government pay countries in the Balkans to take failed asylum seekers – a prospect ministers hope might discourage people from crossing the Channel in small boats.
A total of 9,099 migrants have made that journey so far this year, including more than 700 on Tuesday this week – the highest number on a single day in 2025.
Please use Chrome browser for a more accessible video player
2:11
One dead in Channel crossing
The UN’s refugee agency has set out how such hubs could work while meeting its legal standards in a document published earlier this week.
It recommended monitoring the hubs to make sure human rights standards are “reliably met”.
The country hosting the return hub would need to grant temporary legal status for migrants, and the country sending the failed asylum seekers would need to support it to make sure there are “adequate accommodation and reception arrangements”.
A UK government source said it was a helpful intervention that could make the legal pathway to some form of return hub model smoother.
It comes after the EU Commission proposed allowing EU members to set up so-called “return hubs” abroad, with member state Italy having already started sending illegal migrants abroad.
It sends people with no right to remain to Italian-run detention centres in Albania, something Sir Keir has taken an interest in since coming to power.
With Reform UK leading Labour in several opinion polls this year, the prime minister has been talking tough on immigration – but the figures around Channel crossings have made for difficult reading.
Lib Dems don’t tend to listen to right-wing podcasts.
But if they did, they may be heartened by some of what they hear.
Take the interview Kemi Badenoch gave to the TRIGGERnometry show in February.
Ten minutes into the episode, one of the hosts recounts a conversation with a Tory MP who said the party lost the last election to the Lib Dems because they went too far to the right.
Everyone laughs.
Then in March, in a conversation with the Canadian psychologist Jordan Peterson, the Tory leader was asked to describe a Liberal Democrat.
“Somebody who is good at fixing their church roof,” said Ms Badenoch.
She meant it as a negative.
Lib Dems now mention it every time you go near any of them with a TV camera.
Please use Chrome browser for a more accessible video player
4:12
‘It’s a two-horse race!’
The pitch is clear, the stunts are naff
At times, party figures seem somewhat astonished the Tories don’t view them as more of a threat, given they were beaten by them in swathes of their traditional heartlands last year.
Going forward, the pitch is clear.
Sir Ed Davey wants to replace the Tories as the party of middle England.
Image: Sir Ed rides on a rollercoaster. Pic: PA
One way he’s trying to do that is through somewhat naff and very much twee campaign stunts.
To open this local election race, the Lib Dem leader straddled a hobbyhorse and galloped through a blue fence.
More recently, he’s brandished a sausage, hopped aboard a rollercoaster and planted wildflowers.
Senior Lib Dems say they are “constantly asking” whether this is the correct strategy, especially given the hardship being faced by many in the country.
They maintain it is helping get their message out though, according to the evidence they have.
“I think you can take the issues that matter to voters seriously while not taking yourself too seriously, and I also think it’s a way of engaging people who are turned off by politics,” said Sir Ed.
Image: Sir Ed on a hobby horse during the launch of the party’s local election campaign in the Walled Garden of Badgemore Park in Henley-on-Thames. Pic: PA
Pic: PA
‘What if people don’t want grown-ups?’
In that way, the Lib Dems are fishing in a similar pool of voters to Reform UK, albeit from the other side of the water’s edge.
Indeed, talk to Lib Dem MPs, and they say while some Reform supporters they meet would never vote for a party with the word “liberal” in its name, others are motivated more by generalised anger than any traditional political ideology.
These people, the MPs say, can be persuaded.
But this group also shows a broader risk to the Lib Dem approach.
Put simply, are they simply too nice for the fractured times we live in?
“The Lib Dems want to be the grown-ups in the room,” says Joe Twyman, director of Delta Poll.
“We like to think that the grown-ups in the room will be rewarded… but what if people don’t want grown-ups in the room, what if people want kids shitting on the floor.”
Image: Sir Ed canoeing in the River Severn in Shrewsbury, Shropshire. Pic: PA
A plan that looks different to the status quo
The party’s answer to this is that they are alive to the trap Lib Dems have walked into in the past of adopting a technocratic tone and blandly telling the public every issue is a “bit more complicated” than it seems.
One senior figure says the Lib Dems are trying to do something quite unusual for a progressive centre-left party in making a broader emotional argument about why the public should pick them.
This source says that approach runs through the stunts but also through the focus on care and the party leader’s personal connection to the issue.
Presenting a plan that looks different to the status quo is another way to try to stand apart.
It’s why there has been a focus on attacking Donald Trump and talking up the EU recently, two areas left unoccupied by the main parties.
Please use Chrome browser for a more accessible video player
1:09
‘A snivelling cretin’: Your response?
The focus on local campaigning
But beyond the national strategy, Lib Dems believe it’s their local campaigning that really reaps rewards.
In the run-up to the last election, several more regional press officers were recruited.
Many stories pumped out by the media office now have a focus on data that can be broken down to a constituency level and given to local news outlets.
Party sources say there has also been a concerted attempt to get away from the cliche of the Lib Dems constantly calling for parliament to be recalled.
“They beat us to it,” said one staffer of the recent recall to debate British Steel.
Please use Chrome browser for a more accessible video player
1:08
Steel might have been ‘under orders’ from China
‘Gail’s bakery rule’
This focus on the local is helped by the fact many Lib Dem constituencies now look somewhat similar.
That was evidenced by the apparent “Gail’s bakery rule” last year, in which any constituency with a branch of the upmarket pastry purveyor had activists heaped on it.
The similarities have helped the Lib Dems get away from another cliche – that of the somewhat opportunist targeting of different areas with very different messages.
“There is a certain consistency in where we won that helps explain that higher vote retention,” said Lib Dem president Lord Pack.
“Look at leaflets in different constituencies [last year] and they were much more consistent than previous elections… the messages are fundamentally the same in a way that was not always the case in the past.”
Image: Sir Ed in a swan pedalo on Bude Canal in Cornwall. Pic: PA
A bottom-up campaign machine
New MPs have also been tasked with demonstrating delivery and focusing doggedly on the issues that matter to their constituents.
One Home Counties MP says he wants to be able to send out leaflets by 2027, saying “everyone in this constituency knows someone who has been helped by their local Lib Dem”.
In the run-up to last year’s vote, strategists gave the example of the Lib Dem candidate who was invited to a local ribbon-cutting ceremony in place of the sitting Tory MP as proof of how the party can ingratiate itself into communities.
With that in mind, the aim for these local elections is to pick up councillors in the places the party now has new MPs, allowing them to dig in further and keep building a bottom-up campaign machine.
‘Anyone but Labour or Conservative’
But what of the next general election?
Senior Lib Dems are confident of holding their current 72 seats.
They also point to the fact 20 of their 27 second-place finishes currently have a Conservative MP.
Those will be the main focus, along with the 43 seats in which they finished third.
There’s also an acronym brewing to describe the approach – ABLOC or “Anyone but Labour or Conservative”.
Image: Keir Starmer and Kemi Badenoch aren’t exactly flying high in the opinion polls
9% swing could make Sir Ed leader of the opposition
The hope is for the political forces to align and Reform UK to continue splitting the Tory vote while unpopularity with the Labour government and Conservative opposition triggers some to jump ship.
A recent pamphlet by Lord Pack showed if the Tories did not make progress against the other parties, just 25 gains from them by the Lib Dems – the equivalent of a 9% swing – would be enough to make Sir Ed leader of the opposition.
What’s more, a majority of these seats would be in the South East and South West, where the party has already picked up big wins.
As for the overall aim of all this, Lord Pack is candid the Lib Dems shouldn’t view a hung parliament as the best way to achieve the big prize of electoral reform because they almost always end badly for the smaller party.
Instead, the Lib Dem president suggests the potential fragmentation of politics could bring electoral reform closer in a more natural way.
“What percentage share of the vote is the most popular party going to get at the next general election, it’s quite plausible that that will be under 30%. Our political system can’t cope with that sort of world,” he said.
Whether Ms Badenoch will still be laughing then remains to be seen.
This is part of a series of local election previews with the five major parties. All five have been invited to take part.
It would be “foolish” to stop engaging with China, the chancellor has said, as Sir Keir Starmer held his first call with Donald Trump since he put 10% tariffs on goods imported from the UK.
Rachel Reeves will hold talks with the US next week amid efforts to establish a trade deal, which the government hopes will take the sting out of the president’s tariffs.
There has been speculation Washington may press the government to limit its dealings with China as part of that deal, having launched a tit-for-tat trade war with its economic rival.
But Ms Reeves told The Daily Telegraph:”China is the second-biggest economy in the world, and it would be, I think, very foolish, to not engage.
“That’s the approach of this government.”
She suggested she would back the fast fashion firm Shein launching an initial public offering (IPO) in the UK, saying the London Stock Exchange and Financial Conduct Authority have “very strict standards” and “we do want to welcome new listings”.
Shein, which was founded in China but is now based in Singapore, has faced several obstacles to its efforts to float, including UK political pressure over alleged supply chain and labour abuses.
Image: Sir Keir Starmer and Donald Trump met in February. Pic: PA
‘Productive discussions’
When it comes to a UK-US deal, The Daily Telegraph has reported officials in Washington believe an agreement could be weeks away.
But on Thursday, Mr Trump said he was in “no rush” to reach any deals because of the revenues his new tariffs are generating.
During Sir Keir’s call with the US president on Friday, the two leaders talked about the “ongoing and productive discussions” on trade between the two nations, according to a Downing Street spokesperson.
“The prime minister reiterated his commitment to free and open trade and the importance of protecting the national interest,” Number 10 said.
As well as the 10% levy on all goods imported to America from the UK, Mr Trump enacted a 25% levy on car imports.