Keir Starmer says country is 'at a fork in the road' over Covid recovery strategy

Labour leader Sir Keir Starmer during a visit to Albert House, Woolwich, London, which has cladding

Labour leader Sir Keir Starmer during a visit to Albert House, Woolwich, London - Credit: PA

A new partnership between business and the state is needed as the country rebuilds from the coronavirus crisis, Labour leader Sir Keir Starmer will say.

Next month’s Budget represents a “fork in the road” for British society, with a chance to reject the “insecure and unequal economy” of the past, he will say in a speech on Thursday.

Sir Keir, who has faced criticism over his leadership in recent weeks, will use the address to set out a long-term vision for the economy.

He will commit Labour to a policy of “financial responsibility” but with an active government that “knows the value of public services not just the price in the market”.

There can be “no return to business as usual” after the pandemic, he will say, claiming “the terrible damage caused by the virus to health and prosperity has been all the worse because the foundations of our society had been weakened over a decade” under Tory rule.

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Sir Keir will portray Rishi Sunak’s March 3 Budget as a defining moment for the country.

“We can go back to the same insecure and unequal economy that has been so cruelly exposed by the virus or we can seize this moment and go forward to a future that is going to look utterly unlike the past,” he will say.

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“That choice will define the Budget and it will define the next election.”

Labour is calling for the government to scrap the planned £20-a-week cut in Universal Credit, give extra cash to local authorities to avoid council tax hikes and extend the business rate holiday and VAT cut for hospitality and leisure firms which have been devastated by lockdowns.

Sir Keir will say it is now a “moment to think again about the country that we want to be” and time for a “call to arms” like the Beveridge Report that paved the way for the NHS and welfare state in the aftermath of the Second World War.

The Labour leader’s speech comes after a difficult few weeks in which he has faced sniping over his failure to achieve a decisive breakthrough in the polls ahead of elections across Great Britain in May.

In a sign of unease within the Labour ranks, Tom Kibasi, one of the architects of Sir Keir’s leadership campaign, used a Guardian column on Wednesday to say “If Starmer were to depart as leader tomorrow, he would not leave a trace of a meaningful political project in his wake”.

But setting out his plans, Sir Keir will say: “Under my leadership, Labour’s priority will always be financial responsibility.

“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.

“To invest wisely and not to spend money we can’t afford. Those are my guiding principles.

“But I think that Covid has shifted the axis on economic policy: both what is necessary and what is possible have changed.”

People are “looking for more from their government”, as they did in the years after the Second World War.

“They’re looking for government to help them through difficult times, to provide security and to build a better future for them and their families.”

Sir Keir will promise a government that invests in British skills, science, universities and manufacturing, provides a world-class education and “a new generation of affordable homes”.

“But 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 government and enterprising business.”

The Labour leader will also use his speech to take aim at Boris Johnson’s administration, saying that “despite the scale of the moment, all we can expect from this government is more of the same, a road map to yesterday”.

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