Keir Starmer will on Thursday vow that as prime minister he would “create a new partnership between an active government and enterprising business”, in his first big speech on the economy since becoming Labour leader last April.
Starmer will also promise that a Labour government would prioritise “financial responsibility”, saying he took the issue “incredibly seriously” and that people expected the government to look after their money.
His embrace of enterprise and fiscal discipline marks a clear break from the leadership of Jeremy Corbyn, as Starmer attempts to reposition Labour as a responsible government-in-waiting.
Starmer’s problem is identifying a distinctive economic space for Labour at a time when the Conservative government is borrowing £400bn a year and engaged in massive state intervention in the economy.
Although chancellor Rishi Sunak wants to use his March 3 Budget to start raising taxes to demonstrate his own commitment to fiscal discipline, prime minister Boris Johnson’s instincts are to keep spending in the run-up to the next election.
The Labour leader will attempt to create clear water by insisting that the Conservative’s instinct will be to return to the austerity policies of David Cameron and George Osborne in the 2010-15 parliament.
He will claim that “failed Conservative ideology” had left society — including the NHS — weakened when the pandemic struck and said there must be “no return to business as usual”.
The charge that Johnson wants to return to Osborne-era economics in the last decade may be a hard one to stick on the prime minister, who has vowed to oppose any return to austerity.
Meanwhile, Starmer will commit a Labour government to working in a “new partnership” with business to build a new economy and promoting science, technology and work.
“None of this is possible if you don’t believe in the power of good government and the need to create a new partnership between an active state and enterprising business,” he will say.
The Labour leader will call for an extension of the £20-a-week universal credit uplift — introduced by the chancellor during the pandemic — as well as various business support schemes.
He will also claim that the prime minister and chancellor showed their true colours by “voting against children getting free school meals” or freezing the pay of public sector workers.
Starmer will insist that Labour will not revert to the Corbyn-era, when the opposition party routinely campaigned to spend more money than the Conservatives across a range of policy areas.
“Under my leadership, Labour’s priority will always be financial responsibility,” he will say. “I know the value of people’s hard-earned money — I take that incredibly seriously — and I know that people rightly expect the government to look after it too.”
Under Starmer, Labour has closed the Conservative opinion poll lead sharply, but the party’s high command admits it has failed to break through in former heartland seats in the north and midlands.
There is also a recognition that the prime minister’s mishandling of parts of the Covid-19 response are unlikely to cause him lasting damage, and will be largely irrelevant politically by the time of the next election, due in 2024.