Declining incomes and economic stagnation could cause the UK to descend into political extremism, Keir Starmer has said, as he sought to persuade voters Labour could break this cycle without significant amounts of new public spending.
Saying that the UK was “in a hole” in areas such as incomes, equality and productivity, Starmer used a speech in London to argue that, with public finances so tight, promoting higher growth was the only way to improve the situation.
Speaking at a conference organised by the Resolution Foundation thinktank in London, the Labour leader said there were grave dangers in being unable to turn things around.
Many people were facing “a loss of the future”, Starmer said, adding that the economic contract under which he grew up – life could be tough but the future would improve and the country was fundamentally fair – had come unstuck.
That precondition, which had been “a comfort” for his parents, no longer existed, he said. “A political consensus that if you work hard and play by the rules, you will get on, a glue that binds British society together, has become nothing short of a lie – for millions. It’s a well from which so many political horrors can spring.”
In extracts of the speech briefed in advance, Starmer said anyone who expected a Labour government “to quickly turn on the spending taps is going to be disappointed”. Expanding on this theme, Starmer said the position he might inherit would be so difficult that everything depended on growth bringing in more money so services could be improved without adding to the tax burden.
“Never before has a British government asked its people to pay so much, for so little,” he said. “That’s why growth is everything. It’s not just the quickest way out of this – it’s the only way. The path to public service investment and keeping taxes competitive. It will be a hard road to walk – no doubt about it.”
The recent autumn statement by Jeremy Hunt, the chancellor, who spoke earlier at the same event, had shown Britain was “going backwards”, Starmer said.
“Decline – not just diagnosed subjectively, by politicians, a decline that can be measured and experienced in the homes, the pockets, the aspirations and anxieties of millions of people across Britain,” he said, adding that this amounted to a “cultural trauma”.
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Starmer said: “Before anyone ventures the pandemic and war in Ukraine as explanations, big shocks undoubtedly, I point to the evidence the [Resolution Foundation’s] Economy 2030 Inquiry has set out at length: that our productivity failings, the root cause, pre-date those shocks, and that other countries, comparable countries, have dealt with those same challenges much more effectively. So we are in a hole, no doubt about it.”
Raising productivity growth would be “the defining purpose of the next Labour government”, Starmer said. He added: “We can’t be agnostic about the sort of growth we pursue any more. The growth we need must better serve working people and must raise living standards in every community.”
Starmer gave no new specifics about this template, saying that detailed spending decisions would need to wait until closer to the election.