Keir Starmer will present Labour to voters today as the party of “sound money” in contrast to Tory tax slashing policies which have sent the pound into a free fall on international markets.
With sterling taking a pummelling on the financial markets and sparking fears of higher interest rates, Starmer will seize the moment to tell the country that Labour is now more capable of steering the economy through the cost of living crisis.
In a make-or-break Labour conference speech in Liverpool, Starmer will position Labour as a government in waiting with a plan to grow the economy and properly manage the nation’s finances.
Sterling nose dived to a record low against the dollar early on Monday in a frenzied backlash against Kwasi Kwarteng’s tax-cutting bonanza.
The pound crashed to its lowest level against the dollar since decimalisation in 1971 after the Tory chancellor signalled at the weekend that he was ready to slash taxes even more than the £45 billion cuts in his mini-budget.
The panicked Tory chancellor was forced to issue an emergency statement to try and reassure markets that he would announce a “medium term fiscal plan” on 23 November - in eight weeks time - to try and restore his fiscal credibility.
The move came as the Bank of England warned it will “not hesitate to change interest rates by as much as needed” leading to speculation that interest rates could double to five per cent by the end of the year.
In his conference speech Starmer will draw the contrast between Labour’s plan for growth and the Tories’ shambolic mini-Budget last Friday.
He will say it is the Labour Party that now stands for “sound money” and recommit Labour to an Office for Value for Money to make sure taxpayers’ money is spent in the national interest. He will also contrast Labour’s growth plan for working people with the Tory tax cuts for the wealthiest.
In a clear echo of triple election winner Tony Blair, Starmer will claim that once again Labour is “the party of the centre-ground”.
He will say that Labour will “fight the Tories on economic growth”, through ambitious, practical plans for jobs, skills and tackling the climate emergency.
Rachel Reeves, the shadow chancellor, in her speech to conference on Monday, said the Tories had “not even turned up for the fight” on economic competence since Friday’s mini-budget sent the pound crashing.
Starmer will pick up on the theme in his speech on Tuesday afternoon.
He will say: “What we’ve seen from the Government in the past few days has no precedent. They’ve lost control of the British economy – and for what? For tax cuts for the richest one per cent in our society.”
