Sir Keir Starmer will argue that “growth must become Labour’s obsession” in government to drive Britain out of an economic situation that he will say is worse than after the financial crash.

The Labour leader is set to pledge that, should his party win the next general election, his ministers will be “ruthless” when it comes to prudent public spending.

Labour will face “huge constraints” on what it can spend following 13 years of Conservative mishandling of the economy, he is set to declare during a speech on Monday.

Following a cost-of-living crisis and stagnant growth, Sir Keir will use his speech to put forward the argument that “Britain is going backwards” under Prime Minister Rishi Sunak’s stewardship.

He will declare the “political consensus” that hard work will be rewarded has “become nothing short of a lie for millions of people” under the Tories.

Bank of England Governor Andrew Bailey last week suggested the UK economy’s potential to grow was among the worst he had seen in his lifetime, while the Office for Budget Responsibility has downgraded its forecasts for the coming years.

In an address at the Resolution Foundation think tank’s Ending Stagnation conference, Sir Keir will set out his stall for why voters should trust his party with reviving the economy ahead of a likely general election in 2024.

It comes after he, in a move viewed as a pitch to woo Conservative voters, used an article in The Sunday Telegraph to praise the pro-privatisation former Tory prime minister Margaret Thatcher for having “set loose our natural entrepreneurialism”.

Sir Keir will tell the think thank conference that those expecting an incoming Labour government to “quickly turn on the spending taps” will be “disappointed”.

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Andrew Bailey, Governor of the Bank of England, recently said potential growth in the UK economy was among the worst he had seen in his lifetime (Henry Nicholls/PA)

“Growth will have to become Labour’s obsession if we are to turn around the economy,” he will say.

In pre-briefed comments, Sir Keir is set to add: “It is already clear that the decisions the Government are taking, not to mention their record over the past 13 years, will constrain what a future Labour government can do.

“The comparison between 2010 and today is instructive. Now, debt and interest rates are much higher. Britain’s standing is diminished. Growth is stagnant and public services are on their knees.

“Taxes are higher than at any time since the war, none of which was true in 2010.

“Never before has a British government asked its people to pay so much, for so little.

“Inflation, debt, taxes; we face huge constraints.”

Sir Keir, who is on course for Downing Street according to opinion polling, will point to declining living standards under successive Tory prime ministers, concluding that the governing party’s record “has been a bad bargain for the British people”.

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The economic situation currently is worse than after the 2008 financial crash, Sir Keir Starmer will argue (Dominic Lipinski/PA)

“This Parliament is on track to be the first in modern history where living standards in this country have actually contracted,” he is expected to say.

“Household income growth is down by 3.1% and Britain is worse off.

“This isn’t living standards rising too slowly or unequal concentrations of wealth and opportunity. This is Britain going backwards.

“This is worse than the 1970s, worse than the recessions of the 1980s and 1990s, and worse even than the great crash of 2008.

“The security blanket, that hard work would be rewarded, sadly no longer exists.

“The political consensus that if you work hard and play by the rules, you will get on — a glue that binds British society together — has become nothing short of a lie for millions of people.”

Addressing the conference in central London, Sir Keir will say that “growth creation” will be the “number one priority” under his premiership, a position designed to take Labour out of its “comfort zone”.

“The defining purpose of the next Labour government, the mission that stands above all others, will be raising Britain’s productivity growth,” he will say.

“A goal that for my Labour Party is now an obsession. That is a big change for us.”

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Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves have spoken about an approach dubbed ‘securonomics’ (Stefan Rousseau/PA)

Labour’s approach will be what he and shadow chancellor Rachel Reeves have dubbed “securonomics”.

It will see a focus on supporting the UK’s “huge assets” — its financial sector, highly educated population and world class universities — by carrying out supply-side reforms.

He will pledge to tackle restrictive planning laws, create a competitive tax regime, place more emphasis on skills, and draw up an industrial strategy alongside business.

The next Labour government will also broker a “new deal to make work pay”, with increased mental health support, a fully-funded plan to cut NHS waiting lists, end zero hour contracts, ban fire-and-rehire practices and introduce a “real living wage”, Sir Keir will say.

Highlighting his time as director of public prosecutions during a period of austerity, the Opposition leader said he has told his front benchers about the importance of value for money in public spending and “how precious every pound is for the people we must serve”.

“We will be ruthless when it comes to spending every pound wisely,” he will pledge.

Tory leader Mr Sunak has made growing the economy one of his five pledges to the electorate ahead of the election.

Conservative Party chairman Richard Holden said: “The largest ‘constraint’ to growing the economy would be Labour’s £28 billion a year borrowing plan, which independent economists warn would see inflation, interest rates and people’s taxes rise.

“It is the same old short-term approach from Labour — borrow more and the British people will pay more.

“Instead of talking down Britain like the Labour Party, the Chancellor unveiled 110 measures for growth at the autumn statement, including the biggest tax cut for businesses investing in Britain in modern history — taking the long-term decisions to strengthen the economy.”

Economists, including at the Resolution Foundation, have warned that Chancellor Jeremy Hunt’s £20 billion of tax cuts in last month’s autumn statement were in effect being paid for on the back of future painful spending cuts for already-squeezed Whitehall departments and public services.