King’s Speech: Under Labour, Britain looks like a bad bet
Today’s King’s Speech offered no solutions, just a failing government doubling down on its mistakes, says Mel Stride
The King’s Speech will not restore confidence. It will not tame inflation. It will not bring borrowing down. And it certainly will not convince markets that under Keir Starmer’s Labour, Britain has a government with a grip on reality.
Because behind the pomp and ceremony sits a government engulfed by chaos. The cost of that chaos is already landing on taxpayers.
This week Britain’s borrowing costs surged yet again. Our gilt yields have climbed faster than any of our competitors. Markets are not reacting to abstract global trends alone. They are responding to the growing belief that Keir Starmer is weak, isolated and losing control of his own party.
Political instability carries an economic price tag. Investors can see a Prime Minister lurching leftwards to placate restless backbenchers while ambitious rivals circle, demanding even more spending, borrowing and taxation. The result is uncertainty. And uncertainty is poison for growth.
Rachel Reeves wants to blame global instability for rising borrowing costs. But the numbers tell a different story. Britain is increasingly an outlier. Our borrowing costs were already among the highest in the G7 before the latest Labour infighting erupted. Now markets are demanding an even greater premium to lend to us because they no longer trust this government to control spending, inflation – or even its own MPs.
And why would they?
Labour swept into office promising “growth, growth, growth”. Rachel Reeves declared she would run the most pro-business Treasury in British history. Instead, businesses have been hammered with tax rises, crushed by uncertainty and paralysed by constant speculation over what fresh raid may come next.
The true cost of political weakness
The result is visible across the economy. Confidence has fallen. Investment has stalled. Unemployment is climbing. Inflation remains stubbornly high. Britain is trapped in a vicious doom loop of Labour’s own making: more spending, more borrowing, more taxes, weaker growth – and then demands for yet more taxes to fill the hole. Round and round it goes.
But rather than change course, Labour look set to double down on their mistakes in a desperate attempt to shore up left-wing support. Their plans for new laws announced yesterday include nationalising steel and banning new oil and gas extraction.
None of this will instil any confidence in the government’s ability to turn our economy around. And confidence matters because markets lend cheaply to countries they trust and punish countries they fear are drifting.
Under Labour, Britain looks like a bad bet.
Starmer’s authority is shot, the party is split and it’s only a matter of time until we have a new Prime Minister. The leadership hopefuls are already queuing up to talk about their plans to defy the bond market and tax, borrow and spend even more than Starmer and Reeves have already managed.
That instability feeds directly into higher borrowing costs. Every rise in gilt yields means billions more spent servicing debt instead of funding public services, strengthening defence or cutting taxes for working people.
That is the true cost of political weakness.
The tragedy is that none of this was inevitable. Britain is not condemned to stagnation. We are being dragged there by political choices – bad choices – made by a government addicted to state expansion, terrified of difficult decisions and paralysed by internal division.
And the King’s Speech offered no solutions. No credible plan for productivity. No meaningful strategy for investment. No recognition that growth comes from backing enterprise, rewarding work and creating stability – not from endlessly expanding the state.
That is why the Conservatives have published an Alternative King’s Speech: a serious programme built around growth, security and responsibility. We’re putting forward 16 bills focused on welfare, energy, immigration, deregulation, defence and law and order. A plan rooted in the hard realities Britain faces. And all underpinned by our Golden Economic Rule: that at least half of all the savings we identify from public spending will go towards reducing government borrowing. Unlike other parties, we recognise that fixing our public finances is the foundation of any plan for a stronger economy.
The country cannot afford years of endless chaos under Labour. Britain needs stability. Britain needs confidence. Britain needs leadership.
And right now, Labour is offering none of them.
Mel Stride is shadow Chancellor