Image Source: Bloomberg
Sir Keir Starmer of the Labour Party has laid out his economic plans and warned that if new policies aren’t implemented, the UK could fall behind countries in eastern Europe.
The leader of the Labour Party spoke to a group of important business people in the City of London.
In the speech, he talked more about his “mission” to make the UK the G7 country with the fastest growth that can be kept up.
Sir Keir said he wanted the UK to be seen as a “rock of the economy.”
Labour said that the Tories had put the country on a “path of decline” and that if recent growth trends kept up, people in the UK would be worse off than Poland by 2030.
It said that the UK’s GDP per person would grow by an average of 0.5% per year in real terms between 2010 and 2021, while Poland’s would grow by 3.6%. (Based on data from the World Bank)
Labour said that if these trends continued, people in the UK would be £500 ($600) poorer than those in Poland by 2030, and they would be behind Hungary and Romania by 2040.
Last week, Labour said it would have five “missions” if elected. The first is ensuring the UK has the “highest sustained growth” of all G7 countries.
The other big ideas for what Labour wants to do if they get into power are to make the UK a “clean energy superpower,” improve the NHS, change how the justice system works, and raise education standards.
Labour Party will release a more detailed policy soon
In his speech, Sir Keir said that the UK needs to be brave enough to stand up to strong groups. He also said that shaping the market is the government’s job. But there are also a lot of other things that need to change, like the fact that a labor market that locks in low pay and low productivity can’t be fixed and that the planning system should favor the already wealthy instead of the new houses, wind farms, and labs we need to make more money.
As a first sign of how the mission on the economy would be measured, Labour said it would look at the growth in output per person and compare it to other countries.
It also wants to look at the quality of life by comparing the disposable income of a typical UK family to that of a typical French or German family. It hopes to make progress toward closing the gap between a typical British family and one in France or Germany by the end of the parliament.
But Sir Keir also said that he should be judged by whether or not people “feel better off” after Labour leaves office.
The opposition’s economic goals are clear from what they said today. First, it wants to have the fastest rate of growth among the G7 countries.
Labour says that a “bad Brexit deal” is worsening the country’s economic problems, and they want to “reset” their relationship with Europe.
It looks at ways to get closer to Europe and how the UK should respond to the US and Europe pouring money into green and high-tech businesses.
Based on how things are going now, the claim that Poland could have a bigger economy per person than the UK by 2030 could be the most interesting part of the “mission” document.
It comes after Starmer said last week that foreign investors told him they wanted to avoid investing in the UK because of how chaotic the government is.
Even though the document is more about analysis than action, the fact that top business leaders and Mark Carney, the former head of the Bank of England, will be at the launch event says a lot.
Big international investors already care a lot about how Labour feels about ties with Europe and investing in green industries.
Former president of the business group CBI, Paul Drechsler, said Labour’s plan was in line with what many of the country’s business leaders wanted. He liked that it promised “more stability and certainty.”
Labour has been trying to win over the business community by saying it would run a stable, long-term government. This contrasts how quickly Conservative prime ministers switched last fall, which threw the financial markets into chaos.
But Sir Keir has said that he is fine with the corporation tax going up from 19% to 25% in April. He said that tax stability is more important to businesses than tax changes.
He has also said that he would “make Brexit work” and make big changes to the UK’s constitution, which he said would bring out the best in the UK’s nations and regions.
John Allan, the head of Tesco, said he is sure many businesses will be happy with Labour’s plan to keep the economy growing.
“Growth happens best when business and government work together. Now, we need to work together to make a detailed plan so that if Labour wins the next election, they can get to work on the first day.”
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Lord Sainsbury, who used to run a chain of grocery stores, gave £2 million to the Labour Party. When Labour was in power before, he regularly gave money to the party and was Tony Blair’s science minister. But, in 2016, he stopped giving money.
