Short-term pain the only way to achieve prosperity, Prime Minister to insist
Sir Keir Starmer will insist on Tuesday that there is “light at the end of this tunnel” in an attempt to convince the country and his party to put up with “short-term” financial pain.
In his first speech to the Labour conference since becoming Prime Minister, Sir Keir will warn he cannot lower taxes until he fills the spending “black hole” left by the Conservatives.
Striking a more positive note, he will look beyond a tough Budget next month and argue that Labour can bring back “joy” in people’s lives over the next five years.
Higher economic growth, lower NHS waiting lists, stronger borders and a cleaner energy system will be singled out as the benefits if the public finances are stabilised.
The approach is a deliberate attempt to counter criticism – including from around his Cabinet table – that the Prime Minister has been too gloomy in his rhetoric since taking office.
Sir Keir will say in his speech: “The politics of national renewal are collective. They involve a shared struggle. A project that says, to everyone, this will be tough in the short term, but in the long term – it’s the right thing to do for our country. And we all benefit from that.”
He will add: “The truth is that if we take tough long-term decisions now, if we stick to the driving purpose behind everything we do: higher economic growth – so living standards rise in every community; our NHS facing the future – waiting lists at your hospital down; safer streets in your community; stronger borders; more opportunities for your children; clean British energy powering your home; making our country more secure… then that light at the end of this tunnel, that Britain that belongs to you, we get there much more quickly.”
The speech will aim to justify the difficult financial decisions Labour is expected to take in the Budget on Oct 30, echoing warnings from Rachel Reeves, the Chancellor, that tax rises and spending cuts are being considered for next month.
‘Political black hole’
Sir Keir will say: “It will be hard. That’s not rhetoric, it’s reality. It’s not just that financial black hole, the £22 billion of unfunded spending commitments, concealed from our country by the Tories, it’s not just the societal black hole – our decimated public services leaving communities held together by little more than goodwill – it’s also the political black hole.
“Just because we all want low taxes and good public services, does not mean that the iron law of properly funding policies can be ignored. We have seen the damage that does, and I will not let that happen again. I will not let Tory economic recklessness hold back the working people of this country.”
The explicit warning that “low taxes” cannot be delivered until the public finances are secured is another indication that increases can be expected next month.
Labour has ruled out raising income tax rates, National Insurance, VAT or the Corporation Tax rate, but Capital Gains Tax and inheritance tax increases remain possible.
Ms Reeves on Monday indicated that the tax burden, already at a 70-year high, will inevitably be pushed higher next month when the Office of Budget Responsibility (OBR) publishes forecasts. The OBR forecast will include tax increases, such as applying VAT to private school fees, already put in place.
There has been criticism that the focus on the Tory inheritance has disillusioned voters, with Sir Keir’s personal approval ratings plummeting since the July election victory.
‘Too much gloom, not enough light’
One Cabinet minister told The Telegraph this week: “There has been too much gloom and not enough light.”
A trade union revolt over the winter fuel payments cut has led to a vote on the policy at conference being delayed to Wednesday, when most senior Labour figures will have left, but Sir Keir’s team still think they will lose.
The vote is not binding on policy but a rebuke from conference over one of the first financial decisions taken by Labour in office would be an embarrassment for No 10.
Sir Keir will say: “I know this country is exhausted by and with politics. I know that the cost-of-living crisis drew a veil over the joy and wonder in our lives and that people want respite and relief, and may even have voted Labour for that reason.”
There will also be repeated references to leading a “government of service”, with Sir Keir promising at one point to “put respect and service deep in the bones of our institutions”.
It remains to be seen if Sir Keir will make reference to the row over donations of clothing, glasses and apartments from the Labour peer Lord Alli – who was photographed at the conference on Monday – in the speech.
