Starmer pitches for wealth creation

Despite Labour’s poll lead, Starmer is fighting to overcome persistent Tory claims that his party will recklessly spend public finances and increase taxes

• Shajil Kumar
• 13 June, 2024

By: Shajil Kumar

Labour party launched a “manifesto for wealth creation” Thursday, pledging to get the economy firing again if it wins power in next month’s election after 14 years in opposition.

Labour has consistently led Rishi Sunak’s Conservatives by around 20 points for nearly two years, suggesting its leader Keir Starmer will become the next prime minister.

“Wealth creation is our number one priority, economic growth is our core business,” said Starmer, 61, unveiling his centre-left party’s blueprint for government before the July 4 vote.

The manifesto launch came two days after the Tories promised voters more tax cuts, in a campaign where the affordability of the main parties’ spending plans have come under close scrutiny.

Despite Labour’s hefty poll lead, Starmer is fighting to overcome persistent Tory claims that his party will recklessly spend public finances and increase personal taxes.

With a speech peppered with the word “change”, Starmer also drew a line between his party and the governing Conservatives, saying a Labour government would offer “stability over chaos … an end to the desperate era of gestures and gimmicks, and a return to the serious business of rebuilding our country.”

“We are pro-business and pro-worker. The party of wealth creation,” he told an audience in Manchester, northern England, after being briefly interrupted by a heckler.

Starmer has ruled out increasing the VAT sales tax, income tax rates and National Insurance – which pays for state healthcare, pensions and unemployment.

He says Labour will instead focus on spurring economic growth if it wins.

He pledged to restore economic “stability” after the turbulence of recent years that saw inflation hit 11.1 percent in October 2022 — its highest in 40 years.

Starmer and likely finance minister Rachel Reeves look set to have little room for manoeuvre, however, with the economy stagnant in April after emerging from recession in the first quarter.

No ‘magic wand’

Economists say the incoming government could get some momentum from expected falls in interest rates and inflation by the end of the year, however.

“We don’t have a magic wand but what we do have, what this manifesto represents, is a credible long-term plan,” said Starmer in Manchester, northwest England.

Many of the policies in Labour’s manifesto have been drip-fed to journalists for months, and Thursday’s launch included no surprises.

The booklet includes a new National Wealth Fund to invest in industries and a publicly owned clean energy company.

Labour also promises to employ 6,500 new teachers and provide 40,000 new hospital appointments a week.

It plans to cap corporation tax at 25 percent but intends to raise billions of pounds of additional revenues by cracking down on non-domiciled tax statuses while raising levies on private schools and oil and gas profits.

As in 1997, when Tony Blair won a landslide after 18 years of Tory rule, Starmer knows that he needs to reassure a jittery electorate that Labour can provide stability and economic competence.

‘Pro-business’

At the last election in 2019, his predecessor Jeremy Corbyn stood on a radical platform that included proposals for sweeping renationalisation of key industries, and tax hikes for high earners.

Starmer took over after Labour was routed by Boris Johnson’s Tories. He has dragged the party back to the less threatening centre ground, vowing it is both “pro-business and pro-worker”.

Britons have endured an unprecedented period of political upheaval, with five Tory prime ministers since 2010, and three in just four months in 2022.

Much of that was the result of Brexit, the country’s tortuous departure from the European Union.

But there were also self-inflicted wounds such as Liz Truss’s short-lived tenure, when her unfunded tax cuts spooked the markets and crashed the pound.

One of Starmer’s first tasks if he finds himself in Downing Street on July 5 will be to prepare for a crunch NATO summit in Washington the following week, and to host a meeting of European leaders.

He says he will scrap the Tories’ plan to deport failed asylum seekers to Rwanda and will recognise Palestinian sovereignty as part of the peace process. (Agencies)