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Labour’s economic plan will take years to deliver in full, Keir Starmer has said as he tries to regain the narrative after a turbulent response to last week’s budget.
In an article for the Guardian, the prime minister hit back at his political opponents, insisting the chancellor, Rachel Reeves, was right to impose £26bn worth of tax rises.
He also promised a long-term plan that he said should be judged at the end of the parliament.
Starmer’s comments form part of a broader intervention designed to bolster his and Reeves’s position after days of arguments about whether the chancellor had needed to put up taxes to their highest levels on record.
The Conservatives have called for Reeves to resign over accusations she misled voters when she warned about the impact of lower growth forecasts by the Office for Budget Responsibility (OBR).
On Monday, Starmer will give a speech rebutting those claims and setting out a multiyear economic plan based around deregulation, further welfare reform and closer European ties.
He writes: “By delivering a big, bold long-term plan, not a set of quick fixes, we will renew Britain. We must become again a serious people, with a serious government, capable together of doing difficult things to regain control of our future.
“By having a clear mission to renew our economy, our communities and our state we will deliver the change we promised and then be judged on it at the next election.”
In a rebuttal to his political opponents, Starmer adds: “We will take on those on the left and right who only offer grievance and whose approach would lead to further decline. Because let me be clear – turning on the borrowing taps or returning us to austerity – that is the politics of decline and I will not accept it.”
In his speech, Starmer will promise both further deregulation – having asked the business secretary, Peter Kyle, to look at ways to make it easier to build large infrastructure projects – and another attempt to overhaul the welfare system.
The prime minister was rebuffed in the summer by his own backbenchers when he attempted to cut disability benefits.
But he recently asked the former health secretary Alan Milburn to look at the role of mental health issues and disability in youth unemployment, while the welfare minister, Stephen Timms, has been continuing his broader review of disability payments.
Starmer will say on Monday: “We must also reform the welfare state itself – that is what renewal demands.
“Now – this is not about propping up a broken status quo. Nor is it because we want to look somehow politically ‘tough’. The Tories played that game and the welfare bill went up by £88bn.”
He will add: “If you’re not given the support you need to overcome your mental health issues, or if you are simply written off because you’re neurodivergent or disabled, then it can trap you in a cycle of worklessness and dependency for decades.”
Starmer and Reeves have had a difficult few days since the chancellor gave her second budget, in which she put up a number of different taxes and extended the freeze on income tax and national insurance thresholds in order to pay for increased welfare spending and build a bigger buffer against her fiscal rules.
The package has been well received by the markets, with UK borrowing costs coming down to their lowest levels this year, while Labour MPs have cheered the end of the two-child benefit cap.
The chancellor has been accused, however, of misleading voters over the real reason for raising taxes.
Reeves said before the budget she would have to act because official forecasters were poised to downgrade their assumptions of how productive the British economy has been and will be in the future.
In the end, however, that downgrade was more than cancelled out by a separate upgrade to expected wage growth and tax receipts, leaving the chancellor with a small surplus.
Reeves’s opponents, and even some colleagues, have complained she continued blaming the OBR for her expected tax rises even after learning there was no shortfall.
One cabinet minister told the Times on Sunday: “At no point were the cabinet told about the reality of the OBR forecasts. Had we been told, we might have been in a position to advise against setting hares running on income tax and giving the public the impression we are casual about our manifesto commitments.”
Reeves defended her decisions on Sunday in the face of calls for her resignation from the Conservative leader, Kemi Badenoch.
The chancellor told BBC One’s Sunday with Laura Kuenssberg: “I know that some people are suggesting that there was a small surplus that the OBR published on Friday.
“But if I was on this programme today and I was saying £4bn surplus is fine, there was no economic repair job to be done, I think you would rightly be saying that’s not good enough.”
Badenoch, however, told the same programme: “The chancellor called an emergency press conference, telling everyone about how terrible the state of the finances were, and now we have seen that the OBR had told her the complete opposite. Because of that, I believe she should resign.”
The Tory leader, who will speak about the economy at a separate event on Monday morning, also defended her trenchant criticism of Reeves, having accused the chancellor last week of “wallowing in self-pity and whining about misogyny and mansplaining”.
Reeves said on Sunday the personal nature of the attack made her “uncomfortable”, but Badenoch refused to back down, telling the BBC: “My job is to hold the government to account, not to provide emotional support for the chancellor.”
The Tories are seeking to bring Reeves to the Commons on Monday to ask her to give a “full and honest account of her actions”.
Labour aides are concerned that the row over tax rises has detracted from measures the chancellor announced to alleviate the cost of living, including removing green levies from energy bills.
Post-budget polling by the More in Common organisation has found the budget has not shifted voters’ opinions on Reeves’s competence.
Before last week, 61% of voters said they thought the chancellor was doing a bad or very bad job at managing the economy. After the budget, the proportion was 60%.
