Keir Starmer is betting tens of billions more on tax and borrowing to invest in Britain’s ‘new future’

Sir Keir Starmer will bet on tens of billions more in taxes and borrowing to invest in building Britain’s “new future”.

In a keynote speech just days before the Budget, the Prime Minister was to prepare the nation for the “harsh glare of financial reality” which will see a raft of tax rises and Chancellor Rachel Reeves loosening her debt-based budget rule to allow for borrowing. actively invest in crumbling public infrastructure.

As the new Labor government makes controversial changes to taxes and borrowing, Sir Keir has sought to reassure voters they will bring “better days ahead”.

However, he was not expected to shy away from the scale of the fiscal hit and additional borrowing, which he defended as necessary to address the “unprecedented” economic challenges facing the country.

Sir Keir admitted his government’s fate could be decided by whether his tax, borrow and spend master plan works or not, with the Tories already accusing him of breaking manifesto promises.

“We have to be realistic about where we are as a country,” he had to say.

“This is not 1997 when the economy was decent and public services were on their knees. And this is not 2010, when public services were strong but public finances were weak.

“These are unprecedented circumstances.

“And that’s before we even get to the long-term problems that have been ignored for fourteen years.

“The economy is riddled with weakness in productivity and investment. A state that urgently needs modernization to face the challenges of an unstable world.”

The Prime Minister was to add: “But I won’t offer that as an excuse. I expect to be judged on my ability to handle it.

“Politics is always a choice. It’s time to take a clear path and face the harsh light of financial reality so we can come together to develop a credible long-term plan.”

However, the government is already facing criticism over an expected increase in national insurance for employers, which could raise up to £20 billion a year.

The Tories and the Institute for Fiscal Studies say the tax rise would breach Labour’s manifesto and are criticized as a “tax on jobs” while the government promises to make boosting economic growth its number one priority.

Labour’s manifesto pledges not to increase National Insurance, VAT or income tax rates, and Sir Keir and Ms Reeves argue that this pledge does not apply to “working people”.

But the Prime Minister and ministers have been repeatedly criticized for their definition of “working people” and have given answers that appear to change the parameters of who it includes.

Other expected tax rises, many of which will hit London hard, include capital gains tax, inheritance tax, a freeze on the income tax threshold and changes to stamp duty.

The duty on fuel may also increase.

Council tax could continue to rise by five per cent a year, well above inflation.

Education Secretary Bridget Phillipson sought reassurance that working people would not see higher taxes “on their payslips”.

But pensioners, landlords, wealthy people and people with significant shareholdings look set to suffer from higher taxes.

Sources said the chancellor is trying to find £40bn in tax rises and spending cuts, with two per cent efficiency savings across Whitehall departments, to avoid a return to austerity and invest in government priorities such as the National Health Service.

Ms Reeves claims her dramatic plans are needed to plug an alleged £22bn black hole in the government’s finances, which she says the Tories have left, which they deny.

Easing budget rules by changing the definition of debt could allow the chancellor to borrow a further £20 billion to invest in transport and other infrastructure projects, including the HS2 high-speed rail line from Birmingham to Euston in London.

It has already been announced that around £1.4 billion will be spent on rebuilding crumbling schools, as well as tripling investment in breakfast clubs, £1.8 billion to expand government-funded childcare and £44 million to support relatives and foster carers.

Sir Keir was expected to say: “If people want to criticize the path we are taking, that is their prerogative. But then let them set out a different direction.

“This is an economic plan that will change the UK’s long-term growth trajectory for the better.

“That’s what it means to get back to basics and make change happen. Everyone in this country will benefit from this. Everyone can wake up on Thursday and realize that a new future is being built, a better future.”

But shadow science minister Andrew Griffith said Labor was “essentially lying to the British people” about its plans and likened the party’s behavior to “the worst form of a shady car rental firm”.