Keir Starmer handed grim warning — and it could be about to get worse for Labour _ Hieuuk
How long is Keir Starmer’s tunnel towards the light? (Image: Getty)
Consumer confidence has tumbled since Labour got elected thanks to its doom and gloom forecasts and threatened tax rises. Business confidence was already at a low but confidence among consumers has tumbled into negative territory since the end of August, imperilling the economic growth Labour promised before the election.
At the same time government borrowing has hit 100 per cent of GDP, a high not seen since the 1960s, even before factoring in massive public sector pay rises since Keir Starmer came to power. Yesterday, Sir Keir’s Labour Party conference speech did little to lift this gloom, focussing on a “shared struggle” and being “tough in the short term”. The “light at the end of tunnel” he cited might, in fact, be the oncoming express train of recession.
Last week’s GfK’s consumer confidence index plunged seven points to minus 20 in September, indicating Starmer’s gloomy words have consequences. “In September it’s like somebody just turned the tap off,” said kitchen manufacturer Jamie Everett, referring to homeowners putting off big purchases until after next month’s Budget. “If it’s a bad Budget, we will probably have another three to six months of a really difficult market.”
Neither Chancellor Rachel Reeves nor Sir Keir did much this week to alleviate those concerns. They have deployed – and enjoyed – the trashing of the Tories’ economic reputation too much, blaming forthcoming tax rises on a mysterious black hole in the public finances that must now be filled.
But that’s not exactly true, as there was positive growth at the start of the year, outstripping other G7 countries. That now, thanks in large part to Labour’s doom mongering, has evaporated. Their apparent delight at the Tory disaster is backfiring on them.
Inflation is stuck at 2.2 per cent, discouraging any cut in interest rates, largely because of Labour splurging on public sector wage rises, which are likely to feed into more inflation. Public sector profligacy comes as we passed the grim milestone of UK debt-to-GDP surpassing 100 per cent – pushing us towards French and Italian levels of state debt.
Worryingly, the Treasury is talking about “tweaking” the Chancellor’s fiscal rules to allow more capital expenditure on infrastructure.
This might be acceptable if it generated genuine growth, but the Government is notoriously hopeless at deciding what to invest in – take the vast overspend on HS2 for example – and it could just be racking up yet more national debt in fantasy projects like “green industry”.
Far better to let the private sector decide on what is best to invest in by cutting business taxes. But Labour – like all fans of big government – thinks it knows better than the business community and is choosing to raise taxes on profits instead.
Rather than having defeated inflation, it seems we may be in for another cost-of-living crisis as energy prices rise again this autumn, with little help for the most vulnerable like pensioners. Ed Miliband’s obsession with green energy at any price will not help either, as he loads subsidies onto unreliable renewables while the price of power for industry remains higher in the UK than other competing countries.
Electricity prices in the UK are nearly twice those in the US, thanks to America’s broad and continuing use of shale gas and coal alongside renewables. Cheaper industrial and domestic energy would be a more reliable way to boost growth in the UK, but Miliband refuses to encourage a sensible mix of carbon and green fuels.
Getting to grips with the cost of building projects in the UK would help too. A new report entitled Foundations reveals it cost £297million just to put in an application for a Thames road tunnel between Kent and Essex – more than twice the price it cost Norway to actually build the longest road tunnel in the world. Equally, each mile of HS2 costs us £396million, more than eight times the cost of a high speed train line in France.
Labour is pledging to reform our costly planning hurdles, but it will mean dismantling the overly complex system of legal objections that raises the price of any building development in this country.
The brutal truth is that Britain is not generating enough wealth to pay for all the costs of its bloated public sector. Nothing Labour has said this week indicates any improvement and the much-feared budget of tax hikes will further stifle enterprise and invention.
On current performance, I fear Starmer’s tunnel towards the light could be a very long one indeed.
Prime Minister Sir Keir Starmer made an awkward mishap during his Labour conference speech today
Sir Keir addressed a packed out conference venue in Liverpool today where he spoke about the crisis in the Middle East and the ongoing war between Israel and Hamas
Starmer used his keynote speech at the Labour conference today to launch a bid to reboot his fledgling premiership as he begged Brits to be ‘patient’ and stick with his ‘painful choices’ rather than go down the ‘road to nowhere’.
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Keir Starmer defends winter fuel axe and begs Brits to stick with ‘painful choices’ in Labour speech
The PM struck a more positive tone in his first address to activists since taking power, as he tries to move on from damaging rows over winter fuel allowance, tax hikes and freebies.
Watched by wife Victoria, Sir Keir told the gathering in Liverpool the country can find the ‘light at the end of the tunnel’ if the right course is set now.
But he warned there were no ‘easy answers’ and the task would be ‘hard’ – pointing the finger at the Tories for ‘serving themselves’ and pleading with restive Labour supporters to take ‘pride’ in what they were achieving.
Acknowledging that he will not ‘get everything right’, Sir Keir said ‘populist’ criticism of his performance so far was ‘water off a duck’s back’.
‘This is a long-term project, I’ve never pretended otherwise. But conference make no mistake, the work of change has begun,’ he said. ‘We’re only just getting started.’
In a nod to voters’ priorities, Sir Keir will also highlight his commitments to tackling high immigration and crack down on benefits fraud.
Prime Minister Keir Starmer gestures as he delivers his keynote speech during the Labour Party conference
The PM’s wife Victoria was among the crowd at the conference venue in Liverpool
The PM was later joined on stage by his wife Victoria
The speech follows a torrid spell for Labour that saw any feelgood factor from the July election landslide abruptly disappear.
The party has spent weeks fielding difficult questions about the thousands of pounds of gifts received by Sir Keir and senior figures such as Rachel Reeves and Angela Rayner.
And unions and MPs are furious about the scrapping of winter fuel payments for 10million pensioners, with a showdown vote at conference potentially happening tomorrow. Sir Keir will not be present – as he is dashing off to New York straight after the speech to attend the UN general assembly.
Before Sir Keir appeared activists were pumped up with a Star Wars-style display on the big screens of the list of constituencies Labour won on July 4.
The PM was then teed up with a video showing the events of election night, and his victory comments.
Striding on stage he compared the conference having the highest attendance in history to his first speech – to just a cameraman under Covid rule. ‘Do you remember? Most people don’t,’ he joked.
Sir Keir said he was aiming to ‘build a new Britain’, telling conference: ‘Built from that age-old spirit of creativity and enterprise. The pride and ambition of working people.
‘That when matched by a government of service, a decisive government, a government prepared to use its power for justice, opportunity and equal respect, can deliver a Britain that belongs to you.’
