Starmer vows there will be ‘no magic money tree economics’ with Labour
Sir Keir Starmer has promised there will be “no magic money tree economics” with a Labour government as he vows to deliver “sound finances”.
Starmer said in a setpiece speech in Liverpool that he would not be bound to the “nostalgic” thinking that government should direct business activity and that “modern industrial strategy is not about growing the size of the state”.
He also said a future Labour government would not borrow for any day-to-day spending – which consists of spending on the core functions of public services – and that he will “reduce debt as an overall share of our economy” over the long term as he tries to frame his party as fiscally responsible.
Starmer’s speech is the latest in a line of recent interventions he has made to pitch the party as more moderate and business friendly than it was under the leadership of Jeremy Corbyn.
This has included ditching a series of key left-wing policies from the 2019 election manifesto, such as nationalising the UK’s water and energy firms.
However, he told The Mirror today that he would likely keep the 2019 promise to re-nationalise the railways.
Starmer said that if he wins the next election “you will always get sound finances, careful spending and strong, secure and fair growth”.
“There will be no magic money tree economics with us,” he said.
He added: “The old approach focused on growing the pie in any way possible then redistributing it.
“This is not strong, secure and fair growth. It leaves too many people in insecure jobs where their hard work is not fairly rewarded. The investments we make now should have a laserlike focus on boosting productivity across the country. Not just quick wins in the South East.”
It comes as the Conservatives are in the midst of a leadership election that pits Rishi Sunak against Liz Truss against each other, with the winner to be named party leader and Prime Minister on 5 September.
The pair are engaged in a bruising contest which has seen Sunak label Truss’ plan to slash taxes by £30bn+, and fund it by more borrowing, as inflationary and akin to “fantasy economics”.
Starmer said: “In one corner you have Rishi Sunak, the architect of the cost-of-living crisis.
“In the other you have Liz Truss, the latest graduate from the school of magic money tree economics.”
Labour have built a solid lead over the Conservatives in recent Westminster polling, with a RedfieldWilton survey last week giving Starmer’s party a 10-point lead.