Starmer vows to break high-tax, low-growth ‘doom loop’

Sir Keir Starmer has vowed the Labour Party will ensure “investment thrives” in order to boost growth in the UK economy if he is elected Prime Minister.

The opposition leader hinted he would step up government investment and launch policies to boost private investment.

Asked by CityAM about investment and tax and spending policies, Sir Keir said: “I think it’s vital we create the circumstances for investment to thrive. We will not get growth unless we do that.”

Britain has suffered from a sharp productivity slowdown since the 2008 financial crisis, crimping growth and creating what Starmer characterised as a “doom loop” in which taxes perpetually rise and spending drops.

Labour has yet to set out all its tax and spending plans, though has committed to an annual £28bn spending injection into greening the UK economy should it win the next election.

Starmer told firms: “That is about certainty, stability, having a plan for growth using the partnership that we can put together with business. We want to partner with businesses.

“We want to be clear what the government does and what business does and we want to take tough decisions like changing the planning laws.”

‘Doom loop’

He added: “Why have we got such a high tax regime? In my view it’s because we’ve got low growth. That’s why I call it a doom loop – leading to the highest tax since the Second World War. We’ve got to break out of that cycle.”

His comments came following a speech at the British Chamber of Commerce (BCC) annual conference, in which the Labour leader fleshed out his plans for Britain to achieve the highest levels of economic growth in the G7.

“In this new, more volatile economic era, businesses need a government that gets involved,” he said.

“There’s no future in a stand-aside state. That won’t deliver the stability and the certainty, won’t manage the tide of change that is coming.

“It’s simple really: every business in this room has a strategy for growth, a nation needs one too.”

Housing policy split

Labour, he said, would focus on five key shifts: from “chaos to certainty”; from “hoarding potential” to unlocking it; from “lagging to leading”; stopping “insecure work”; and “resilience”.

Starmer’s speech also included a pledge to “take on planning reform” and “bring back local housing targets”.

He linked the need to shake up development to growth, insisting “we choose the builders, not the blockers. The future, not the past. Renewal, not decline. We choose growth.”

It comes as the Conservative Party has been riven by a split on housing policy following a set of local elections which saw them lose close to 1,000 councillors and control of close to 50 local authorities, which are in charge of most planning decisions.

Different factions of the party sought to blame the defeats on either building too many or too few homes.

Asked whether the Prime Minister would class himself as a “builder or a blocker”, a No 10 spokesperson said he “remained committed to delivering 300,000 new homes a year by the mid-2020s” but that he was also “committed to protecting and enhancing” the green belt.