Tue, 27 February 2024

Newsletter sign-up

Subscribe now
The House Live All
New study reveals that card payments significantly benefit UK economic growth Partner content
Being a responsible, long-term partner to Britain Partner content
Press releases

Keir Starmer Says Labour Would Bring In "New Era" Of "Obsession" With Growth

Keir Starmer spoke at a Resolution Foundation event (Alamy)

4 min read

Labour leader Keir Starmer has said that Britain is now in a “new era” that needs a “new economic consensus” with an “obsession” for growth and security, in what he described as a “very unusual” stance from Labour.

Giving a speech at the Resolution Foundation on Monday afternoon, Starmer set out a gloomy economic picture for the UK, but promised that Labour would raise productivity growth and end economic decline. 

“The defining purpose of the next Labour government, the mission that stands above all others, will be raising Britain’s productivity growth,” he said.

“Having wealth creation as your number one priority, that’s not always been the Labour Party’s comfort zone – trust me. But that’s the change I knew was necessary, that’s the change I’ve delivered, and my party is united behind it."

Starmer argued that Labour would pursue growth that would “better serve working people”  and raise living standards, after highlighting statistics showing the decline of household income growth. 

Speaking to Zanny Minton Beddoes, the editor of the Economist, after his speech, Starmer admitted this was a “very unusual” position for the Labour Party to take. 

He said it was “truly shocking” that this parliament was on track to be the first in modern history where living standards in the UK have contracted.

“This is Britain going backwards… decline,” he said, and added that it was wrong for the government to blame this on the pandemic and war in Ukraine, as the Economy 2030 inquiry had evidence to show productivity failings was the root cause of the UK’s economic issues, while other countries had dealt with the same challenges more effectively. 

While Starmer said he would not announce Labour’s spending envelope now, he made it clear his party would not “quickly turn on the spending taps” if they get into government at the next election.

Setting out Labour’s key ideas to boost growth, Starmer said they would prioritise building – of both homes and manufacturing, energy and transport infrastructure – as well as “backing British business” with political stability, a competitive tax regime, and a “new direction on skills”. He also reiterated Labour’s pledge to end zero hour contracts and introduce a real living wage.

“This is a new era and we must establish – as other politicians have in the past – a new economic consensus, with a different model of growth, a different set of values, and a different analysis of the state and its role in the economy,” Starmer said, pointing to Shadow Chancellor Rachel Reeves’ term of “securonomics”.

He added that the period of “great moderation” before the financial crash of 2008, that created the conditions for hyper globalisation, was “over”. 

“Co-operation and trade must now respect a mutual need for security,” he continued. 

The Labour leader said delivering on levelling up would also be essential, while also building a strong industrial strategy in the UK that would be secure from “tyrants” and “global headwinds”.

Although Starmer said his party was "united" behind his push for growth, there are rumblings of discontent around some of his rhetoric.

One Labour MP told PoliticsHome they were concerned that without investment in economic growth and public services, UK recovery would be "slower, more painful and less effective". 

Over the weekend, Starmer also sparked a backlash by praising former Conservative prime minister Margaret Thatcher in an opinion piece for the Telegraph.

Some backbench Labour MPs have voiced their anger at Starmer's words, with one describing it as a “significant miscalculation” as to the damage Thatcher caused. There are worries that his comments could damage Labour’s electoral chances in the ‘red wall’, where the legacy of Thatcher is still “very personal” to people who lost jobs and in regions that have suffered inequality since the Thatcher years.

Labour MP Rachael Maskell told PoliticsHome that communities across the UK were still reeling from the effects of Thatcher's policies and that therefore "no Labour politician should ever say that there was virtue in her legacy".

“Thatcher caused significant harm to our economy, communities and families, including my own," Maskell said. 

"The communities of the North have still not recovered from her scorched earth de-industrialisation policies which ripped good jobs out of communities, leaving the gig economy in its place today.

"The failure of Governments since to significantly re-invest in new industries in the North have left many at the mercy of poor employment opportunities and significant inequalities. No Labour politician should ever say that there was virtue in her legacy and such statements are not only wrong, but has caused much pain and anger in our communities this weekend."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now