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.
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“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.
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].”
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”.
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.”
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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.”