Sir Keir Starmer said he “rejects the argument” tax rises are required to rebuild public services – as he insisted there will be “no return to austerity” under a Labour government.
The Number 10 hopeful told Sky’s political editor Beth Rigby that he will “properly fund” the UK’s creaking infrastructure – despite very few giveaways in his manifesto.
The Labour leader has ruled out raising income tax, national insurance and VAT in the policy document – prompting the Institute for Fiscal Studies to warn his flagship promise to deliver “genuine change” is in jeopardy.
It was put to Sir Keir that, given he does not want to raise taxes, he does not have enough money to rebuild public services after years of cuts.
But he said: “I reject that argument. I reject this suggestion that is out there – that all we can hope for with our economy is that we flatline, forever.
“I understand after 14 years why people don’t necessarily believe that we can grow our economy. I do think we can grow our economy. We’ve got serious plans in here.”
He said: “These are serious planks of growth for the country.
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“I understand why so far in this campaign, what’s being put to us is ‘are you either going to tax more or spend less?’
“But I’m rejecting that that is the only argument, so this manifesto is a total rejection of that argument. We’re going for growth.”
Pressed if “going for growth” meant austerity, he said: “No, there will not be austerity under a Starmer government.
“This is an election about change. We will properly fund our public services. I believe in our public services. I am totally rejecting the proposition that we cannot do better than we’ve done over the last 14 years.”
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1:15
‘I’m running to be PM, not to run the circus’
Pointing to his former job as Director of Public Prosecutions, Sir Keir added: “I ran a public service under austerity. I know the damage that it did. We will not go to austerity under a Labour government.”
Sir Keir was speaking hours after he launched his manifesto with a pledge to “end the political pantomime” and “rebuild Britain”.
The Labour leader is seeking to bring his party back from the political wilderness after 14 years of Conservative governments under five prime ministers – and polls suggest he is on track to do just that.
Asked if he thinks he’s going to win, Sir Keir repeated his cautious mantra that he’s “got to earn every vote” and “polls can’t predict the future”.
But he said he has been preparing for office for some time, so he is ready to “hit the ground running” on day one.
Sir Keir said: “As you would expect, I know the public would expect anybody who wants to be prime minister to be ready to hit the ground running, rolling up his or her sleeves, to be ready to start the work on day one.
“That’s why I’ve ensured that without being complacent, we’ve done the homework to make sure that we can do that the day after the election, and we will start on dentistry, on health, on policing, on education, all of the change that we need.
“That is not about being complacent. It’s about making sure that I can look the public in the eye and say, if you elect a Labour government in to serve you, we will roll up our sleeves and we will start that work on day one.”
Britain’s annual Remembrance Day has a special dimension this year because it is the 80th anniversary of the D-Day landings.
The speaker of the House of Commons, Sir Lindsay Hoyle, and the Imperial War Museum are arranging for images of the men and women who took part in the Normandy campaign to be projected on the Elizabeth Tower below Big Ben.
Political leaders past and present will be on parade to lay wreaths at the Cenotaph, which commemorates “Our Glorious Dead” from two world wars and other military conflicts. Those assembled see no contradiction in the fact they are all bound to have been involved in cuts to the UK’s defence capabilities.
D-Day, when British and American troops fought on to the beaches to liberate Europe, is the defining moment of the UK’s patriotic pride to this day – which is why it was a big mistake by Rishi Sunak in the summer to duck out early from France and the international commemorations of 6 June 1944.
Ever since then Britain and Europe have nestled in the security umbrella extended by the United States.
The Americans came, belatedly, to the rescue in both world wars and we assume that it would do so again. The North Atlantic Treaty (NATO) is explicit that an attack on one member is an attack on all, and the US is the dominant contributor to NATO in both cash and military might.
There was already fresh uneasiness among British politicians about how safe we really are as tensions grow around the world from Ukraine to the Middle East to China. A recent House of Commons report was entitled “Ready For War?”.
Russia’s territorial aggression against Ukraine has brought bloody confrontation between nation states back on to our continent.
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Meanwhile, Mr Trump, the US president-elect, has said he feels no obligation to defend European countries who do not spend as much as he thinks they should.
Given the enthusiasm of successive governments to cash a peace dividend by cutting back defence spending, there are real doubts as to whether the UK would be able to defend itself if it came to another war, according to General Sir Roly Walker, who has taken over as the head of UK armed forces.
This summer he set himself the task of readying “to deter or fight a war in three years”.
He is aiming to double the “lethality” of the army in the face of threats from Russia, China, Iran and North Korea which may be separate or co-ordinated.
The recent BRICS summit in Russia and the deployment of North Korean troops to fight with Vladimir Putin’s forces in Ukraine both show their willingness to internationalise local conflicts. George Robertson, the former defence secretary and NATO general secretary heading a defence review for the government, has also identified the threat from this “deadly quartet”.
General Walker says he can increase lethality within existing spending by smarter use of technology such as drones and AI.
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The problem is that this will still require diverting resources from existing capabilities, when deployable fighting manpower is already at its lowest for 200 years.
British politicians are increasingly aware of the need to strengthen capability and a number of overlapping inquiries are under way.
But given the overall pressures on the national budget, they have been reluctant to focus on the full financial implications.
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10:09
Badenoch calls out Lammy at PMQs
At Prime Minister’s Questions on Wednesday, the new leader of the opposition Kemi Badenoch challenged Sir Kier Starmer to say when the UK will spend 2.5% of GDP on defence; he retorted that it remains an unspecified commitment but that the last Labour government was the last to spend as much. From Mr Cameron to Mr Sunak, the Conservatives never did.
This sparring ignores the reality that for effective security, spending will need to rocket to 3% and beyond, and that Mr Trump may well be the one making that demand.
The US spends 3.5% of its national wealth – matching 68% of the defence spending of all the other members on its own.
They have not all yet hit the official NATO target of 2%, designed in part to “Trump proof” the alliance against the possibility of an American pullout.
The US currently has 100,000 troops based in Europe, increased by 20,000 since Mr Putin’s attack in 2022.
The next Trump administration will certainly want to reduce that number. But a slow reduction of the US commitment is happening in any case.
This week, Professor Malcom Chalmers told MPs on the Defence Select Committee: “The most plausible planning assumption for the UK right now is that America will provide a progressively smaller proportion of NATO’s overall capability and we are going to have to fill those gaps.”
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2:10
Can Trump’s tariffs impact the UK?
Given the likelihood that Mr Trump’s proposed new tariffs will slow the global economy, Sir Keir and the Labour government will have even less to spend on public services than it is proposing. It seems inconceivable that the UK would willingly go beyond 2.5%, whatever the current defence review says is necessary for the defence of the realm.
Just in current defence spending, John Healey, the new defence secretary, claimed he had inherited a £17bn “black hole” of unfunded planned spending from the Conservatives.
Ukraine is likely to be the first flashpoint.
Volodymyr Zelenskyy’s supporters want the US to increase its military aid when the US wants Europe to take more of the burden of defending itself as the US “pivots” to the greater threat it sees to itself from China.
Mr Trump has said he plans to end the Ukraine conflict in 24 hours.
In essence, Mr Putin would keep some of his territorial claims in Donbas and NATO would not extend its security guarantee to what remains of an independent Ukraine.
Mr Trump has already said that NATO’s longstanding and vague offer of eventual membership was “a mistake”.
Anxious not to alienate the US further and hard-pressed financially, some leading European nations including Germany appear ready to go along with such a sell-out.
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A number of security experts, including former acting deputy prime minister Sir David Lidington, say this deal would be “Donald Trump’s Munich”.
This is a reference to the “peace in our time” deal agreed by prime minister Neville Chamberlain with Adolf Hitler, which failed to halt further aggression by Nazi Germany before the Second World War.
Then, as previously with the First World War, “America First” instincts were to leave the Europeans to sort out their own mess. But American forces ended up shedding their blood decisively in both conflicts.
Once again, the UK and Europe are not ready for war, and relying on an increasingly unreliable US. The politicians, prime ministers and generals gathering at the Cenotaph to honour the war dead should have much on their minds.
A recruitment and retention crisis in the armed forces will grow unless the government exempts military families from paying VAT on private school fees, insiders have warned.
They say a promise to increase an allowance funded by the Ministry of Defence (MoD) that helps to cover the cost of school fees does not go far enough, and that highly experienced personnel – officers and other ranks – will quit if Rachel Reeves does not perform a U-turn.
Such a loss in skills would weaken UK defences at a time of rising threats, the insiders say.
A soldier with a child at boarding school, who asked to remain anonymous, said: “I will have to leave military service, as I will not inflict another school move on my child.”
He said: “On one side, the chancellor wore a poppy during her budget announcement, and then proceeded to deal a damaging blow to members of His Majesty’s Armed Forces by not including a simple exemption.”
An army spouse, who asked for her identity to be protected because her husband is serving, said: “This is people’s children. This is people’s money in their pocket.”
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She told Sky News: “If there is a nice job offer outside the military… that is going to look way, way more attractive than it did a few months ago. The army is in a recruitment and retention crisis, so why would you do something like this?”
Offering a sense of the scale of the potential impact, the Army Families Federation, an independent charity, said nearly 70% of families that shared evidence with it about the policy said without protection from the full cost of the VAT they would consider quitting the service.
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The mobile nature of military life – with postings around the UK and overseas – often requires service personnel to move every few years, with any children they have forced to relocate with them, transiting in and out of different schools.
To protect against this disruption some parents decide to send their kids to private school – often to board.
More than 2,000 of these personnel – the majority of them in the army – claim money from the MoD to help cover the cost of private school fees.
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The Continuity of Education Allowance (CEA) funds up to 90% of tuition fees but families must pay a minimum of 10%.
Many of those who take this option will have agonised over the affordability of the portion they will still pay, which can amount to tens of thousands of pounds per year.
They will now have to pay more to cover the VAT on this portion of the bill – or else pull their children out of school, a nightmare option, especially for those serving abroad.
In addition, some other military families that do not qualify for the education allowance – which is only allocated under a very strict criteria – still opt to put their children into boarding school to ensure the continuity of their education at a single location.
They will have no protection from any of the VAT burden.
James Cartlidge, the shadow defence secretary, said he has received a lot of messages from impacted families and is urging the government to give them an exemption.
“The emails I’ve had are saying: I’ve got to choose between my child and serving my country,” said Mr Cartlidge, who previously served as a Conservative defence minister.
“The government really needs to respond to this quickly.”
An MoD spokesperson said: “We greatly value the contribution of our serving personnel and we provide the Continuity of Education Allowance to ensure that the need for the mobility of service personnel does not interfere with the education of their children.
“In line with how the allowance normally operates, the MoD will continue to pay up to 90% of private school fees following the VAT changes on 1 January by uprating the current cap rates to take into account any increases in private school fees.”