Mini-budget u-turn: Labour leader Sir Keir Starmer on why Lancashire should have its say in an early general election after Jeremy Hunt announces major policy changes
Just moments before the new chancellor, Jeremy Hunt, made a brief statement to the media on Monday morning about a raft of rethinks and changes to measures previously announced in the mini-budget less than month ago, the Local Democracy Reporting Service (LDRS) spoke to Labour leader Sir Keir Starmer.
He was quizzed about the policy reversals that appeared to be on the horizon - after the government announced early in the day that it would be bringing forward by a fortnight part of its medium-term fiscal plan - and about Labour's push for an early general election and the pitch that the party would be making to the people of Lancashire.
LDRS: You’ve been calling on the government to reverse its mini-budget for weeks now. It sounds like they are about to do that in large part - and they already have done it to a certain degree. If that brings the stability that you crave, doesn’t that blunt any call for a general election?
Sir Keir Starmer: “No, the damage - I’m afraid - is done with the kamikaze budget. Look no further than the mortgage figures for those not on a fixed-term mortgage in the North West - £370 extra per month. This is a crisis made in Downing Street - it’s being paid for by working people in the North West [and] it’s a complete car crash. You can ditch your chancellor, but you can’t reverse out of a car crash - the damage has been done.
“I don't think they know what they're doing. Now we’re going to get a statement...but no OBR [Office for Budget Responsibility] [analysis] around it. It is self-inflicted damage on the British economy by a government that’s out of control and it’s being paid for by working people - and that is unforgivable.”
LDRS: But it’s a government that has legitimately got two years left to run before it has to call a general election, isn't it?
Sir Keir Starmer: “I don’t believe there’s many people in the North West who believe that any more in terms of legitimacy. I think most people would want the stability of an incoming Labour government, so that’s why the demand [is for] a general election. Tinkering around at the top of the Tory party isn't going to be the change that we need in this country - we need a change of government. We need the stability that an incoming Labour government can bring.”
LDRS: Labour is undoubtedly benefiting from the public response to the first few weeks of Liz Truss’s tenure as Prime Minister - but don't you need to give disaffected Tory voters and lapsed Labour supporters a reason to vote for you at an election whenever it comes - and do you think your policy platform has been clear enough in that regard so far?
Sir Keir Starmer: “Yes is the answer to the question - and that’s why at [the Labour] conference, we set out - in terms - how we would [create] the next generation of jobs in the North West and across the rest of the UK, by combining the challenges of bringing our bills down, security - particularly when it comes to energy so we’re not at risk on the international market -... and dealing with the climate crisis. A plan for growth, but it’s also a plan that will bring economic devolution to different areas across the country so that we don't have Whitehall making all the decisions and we actually allow people in the North West to make decisions about themselves, wherever they are.
“At our conference, we were able to set out our answers to the challenges of the future - clean power by 2030 and [the creation of] Great British Energy, a publicly-owned company that will drive forward the agenda over the next few years and give the stability that businesses across the North West absolutely need.
“The lighthouse beam only comes round from time-to-time onto an opposition - it came round this autumn and what people saw illuminated was a Labour Party that’s changed, a Labour Party that has the practical answers to the challenges that..the country is facing. The contrast with the Tories couldn't be any greater now.”
LDRS: One issue of huge interest here in Lancashire is fracking - would you reimpose the moratorium on fracking [which the government has said it will lift in areas where there is local community support for it] - or would you go further and ban the process for good?
Sir Keir Starmer: “Yes, we’d ban fracking - straightforward. It’s not the answer to the current crisis, it's got all sorts of environmental issues associated with it, which the people of Lancashire know only too well, which is why they’re against it, broadly speaking. It doesn't help with the energy crisis, because it takes many years before [it yields anything] and even when there is a yield, it's then sold on the international market and it doesn't bring the prices down. So it's straight ‘no’ from me on fracking.
LDRS: On rising energy bills, you were at the forefront of calls for government support for households - but your proposal would have lasted just six months [as opposed to the two-year duration of the government’s energy price guarantee for domestic properties]. There is a suggestion that the government may also now be ending their package in April 2023 [it was later confirmed that a review would take place to consider how best to support households and businesses with energy bills after that point, with the aim of reducing the cost to the taxpayer and better targeting it at those most in need]. If they do so, you wouldn't be in a position to criticise them, would you?
Sir Keir Starmer: “We led on this, so on the question of what we should do about the energy prices, we said they should be frozen. We were the first to say that and the Tories said, ‘What a load of old rubbish’ - until they then decided they would freeze them. So I'm not going to take the argument from them that somehow we’re behind the curve. The big difference is not so much how long it lasts for - I do accept the challenge - but in six months we’ve got to have a plan for the next six months, the next 12 months. But the argument isn't about precisely how long it lasts for, the argument is [about] who is going to pay for it.
“We say that the oil and gas companies who've made excess profits should…pay their fair share. The government says no, for some reason - we will leave those excess profits that they didn't expect to make, untouched on the table and stick it on the never-never, so that working people across Lancashire have to pay for it in the long run. That's what spooked the markets, which is this idea that you just stick everything on borrowing and you don't take sensible measures about who is going to pay.
“And if the choice is between oil and gas companies paying their fair share or working people picking up the bill, then for the Labour Party, that’s a very easy choice. We say the oil and gas companies have got to pay their fair share - Liz Truss says she wouldn't touch them, she’ll make working people pay the lot.”
LDRS: Wasn’t it more the unfunded tax cuts that caused the markets to be spooked, rather than the energy price guarantee?
Sir Keir Starmer: “I think it was a combination of the scale of what they announced, the fact that it was largely unfunded, and then coupled with the fact that they didn't use the OBR and the institutions that are there to help the market have confidence. And not only did they not use the OBR, they spent quite a lot of time trashing and undermining [it]. Never again can the Tory Party ever claim that they’re the party of sound money. That is gone, I'm afraid. There’s only one party that’s the party of sound money - and that’s the Labour Party.”
LDRS: You opposed the national insurance rate rise - its reversal [is] one of the few things to have survived the mini-budget. But do you believe the NHS and social care can do without the £13bn it would have raised - or will you still get that extra funding into the system, as the previous chancellor committed to doing?
Sir Keir Starmer: “I listened very carefully to the now the previous chancellor when he made his statement at the mini-budget, because he was asked precisely that question, which was does the reversal of [the national insurance rise, which came into effect in April] mean that the £13bn or so won't be available for the NHS - and he said ‘no’, it would still be available. So if and when there’s an election, that’s the situation we would inherit - but you’re right to say that we opposed the national insurance hike at the time and we have remained consistent about that. The government has had a situation where the Prime Minister voted for the national insurance hike, now she’s said she wants to get rid of it. It's absolute chaos and it’s going to be working people paying the price.
“But for people on a fixed-term mortgage, the idea of paying £370 more per month… that is a huge price to pay for the total incompetence of the government.”
LDRS: Lancashire is now surrounded by areas that either have or are likely about to get devolution deals. The county has been pursuing one of the bespoke-style deals that Boris Johnson put on the table for areas that might not want local government reorganisation or an elected mayor. Is that still on offer from you [or] would you demand reorganisation [a reduction in the number of councils in Lancashire and the areas they cover] and an elected mayor in return for any deal?
Sir Keir Starmer: “I'm a big fan of devolved plans and packages - I don't think the government packages are all they’re cooked up to be - but I do want to ensure an oncoming Labour government does devolve decision-making as closely as possible to the areas that actually have skin in the game. I’m not fixated on the structures - I think what’s important is that the decisions about Lancashire [and] about the North West are not made in Whitehall but actually made in the North West - and that’s the basis of a plan that we would put on the table.”
LDRS: One of our local MPs - Wyre and Preston North’s Ben Wallace, who is also the defence secretary - is a name that’s again being mentioned as a potential Tory leader. Would you fear opposing him in the two years that might remain in the run-up to an election?
Sir Keir Starmer: “The change we need for the country now is not more tinkering at the top of the Tory party - it's embarrassing. Four chancellors in four months, we're talking about a third prime minister in three years. This is the United Kingdom - this is doing huge damage to our reputation for stability and common sense. So not change at the top of the Tory party, [but a] change of government is what this country now needs.”
WHAT THE GOVERNMENT SAYS
New chancellor Jeremy Hunt abandoned a series of tax cuts promised by his predecessor, Kwasi Kwarteng, as he sought to restore stability following weeks of turmoil on the financial markets.
In a televised statement on Monday morning - ahead of a more detailed address to the House of Commons later in the day - Mr Hunt also said that the energy price guarantee, which had been due to cap per-unit household energy prices for two years, will end in April. Thereafter, the government will look to target help for those most in need.
He announced that he would scrap plans to cut the basic rate of tax by 1p – which had been due to be brought forward to April – and that it would remain at 20p in the pound until the country can afford to reduce it.
The cut in dividend tax promised by his predecessor will also go, along with VAT-free shopping for overseas tourists, the freeze on alcohol duty, and the easing of the so-called “IR35 rules” for the self-employed.
Mr Hunt said the tax measures alone will bring in £32 billion after economists estimated the government is facing a £60 billion black hole in the public finances.
In his statement, the chancellor – who only took office on Friday – warned of more “tough” decisions to come.
“Governments cannot eliminate volatility in markets, but they can play their part and we will do so,” he said.
On the issue of tax cuts, he said: “It is a deeply-held Conservative value – a value that I share – that people should keep more of the money that they earn.
“But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.”
Referring to energy price guarantee, he added: “This is a landmark policy supporting millions of people through a difficult winter and today I want to confirm that the support we are providing between now and April next year will not change,” he said.
“But beyond that, the prime minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.”