Key Takeaways:
- Labour’s economic plan will take years to deliver in full, according to Keir Starmer
- The plan includes deregulation, further welfare reform, and closer European ties
- Chancellor Rachel Reeves has faced criticism for imposing £26bn worth of tax rises
- The Conservatives have called for Reeves to resign over accusations she misled voters
- Starmer will give a speech on Monday to rebut claims and set out a multi-year economic plan
Introduction to Labour’s Economic Plan
Labour’s economic plan, as outlined by Keir Starmer, will take years to deliver in full. In an article for the Guardian, Starmer hit back at his political opponents, insisting that Chancellor Rachel Reeves was right to impose £26bn worth of tax rises. He also promised a long-term plan that should be judged at the end of the parliament. This plan is designed to bolster Starmer’s and Reeves’s position after days of arguments about whether the chancellor had needed to put up taxes to their highest levels on record.
The Budget and Tax Rises
The budget, announced by Reeves last week, has been well received by the markets, with UK borrowing costs coming down to their lowest levels this year. However, the chancellor has been accused of misleading voters over the real reason for raising taxes. Reeves said before the budget that she would have to act because official forecasters were poised to downgrade their assumptions of how productive the British economy has been and will be in the future. However, the downgrade was more than cancelled out by a separate upgrade to expected wage growth and tax receipts, leaving the chancellor with a small surplus.
Conservative Criticism and Calls for Resignation
The Conservatives have called for Reeves to resign over accusations she misled voters. Conservative leader Kemi Badenoch told BBC One’s Sunday with Laura Kuenssberg that Reeves should resign, saying that the chancellor had called an emergency press conference to announce the state of the finances, only to later reveal that the OBR had told her the opposite. Badenoch also defended her criticism of Reeves, having accused the chancellor of "wallowing in self-pity and whining about misogyny and mansplaining". Reeves said on Sunday that the personal nature of the attack made her "uncomfortable", but Badenoch refused to back down.
Starmer’s Rebuttal and Economic Plan
Starmer will give a speech on Monday to rebut claims and set out a multi-year economic plan. The plan will include deregulation, further welfare reform, and closer European ties. Starmer will promise both further deregulation and another attempt to overhaul the welfare system. He will say that the welfare state itself needs to be reformed, and that this is not about propping up a broken status quo, but about providing support to those who need it to overcome mental health issues and disability. Starmer will also add that if people are not given the support they need, it can trap them in a cycle of worklessness and dependency for decades.
Welfare Reform and Disability Benefits
The prime minister was rebuffed in the summer by his own backbenchers when he attempted to cut disability benefits. However, he recently asked the former health secretary Alan Milburn to look at the role of mental health issues and disability in youth unemployment, while the welfare minister, Stephen Timms, has been continuing his broader review of disability payments. Starmer will say on Monday that reforming the welfare state is essential to renewal, and that it is not about being "tough" on welfare, but about providing support to those who need it.
Conclusion and Next Steps
In conclusion, Labour’s economic plan will take years to deliver in full, and will include deregulation, further welfare reform, and closer European ties. The plan has been designed to bolster Starmer’s and Reeves’s position after days of arguments about whether the chancellor had needed to put up taxes to their highest levels on record. The Conservatives have called for Reeves to resign over accusations she misled voters, but Starmer will give a speech on Monday to rebut claims and set out a multi-year economic plan. The outcome of this plan and the reaction of the public and the markets will be closely watched in the coming months and years.