Prime Minister Keir Starmer claims the UK economy is ‘turning around’
Prime Minister Keir Starmer said the UK economy is “turning around” as the government attempts to turn the page on a bruising first six months in power.
“The number one priority of this Labour government is growth: growth, growth, growth,” Starmer said in an interview with Bloomberg TV.
“We have to get our economy working. I think we’re beginning to see how that’s turning around,” he added.
Growth has ground to a standstill since last summer’s election, with many economists pinning the blame on gloomy rhetoric from the government as well as the impact of the Budget.
A £25bn increase in employers’ national insurance formed the centrepiece of a wider £40bn tax raid, which was poorly received by businesses and households.
Corporate and consumer confidence has plummeted over the past few months, while business surveys suggest the economy is stagnant. Some forecasters, including BNP Paribas and Morgan Stanley, have cut their forecasts for the UK economy in recent weeks.
Starmer’s comments came after a meeting with leading UK business leaders, in which he pledged that Cabinet ministers would have to “hard-wire” growth into all of their decisions.
“What Rachel and I have done is to make it clear to each of our Cabinet colleagues that in each of their briefs, growth is the number one mission,” he said.
Going forward ministers will face a growth test to assess whether a given policy will encourage or inhibit growth.
Andrew Griffith, Shadow Business and Trade secretary, said:
“Words are cheap but a growth strategy can’t just be infrastructure projects for the 2030’s.
Businesses and high streets are bleeding out right now and too many of our best and brightest are fleeing the country.
The government talk about cutting red tape but it is they who every day are piling on more environmental regulations and propose a 150 page, job destroying Employment Bill.”
Everything has to be seen through the question of whether it is pro-growth
The meeting comes the day before Chancellor Rachel Reeves will deliver a major speech outlining her wider strategy for generating economic growth.
In recent days the government has made a series of announcements designed to reinvigorate the UK economy, which has under-performed on many measures since the financial crisis.
Over the weekend, Reeves announced changes to the planning system that will make it easier to get consent for development in existing areas of economic activity.
She also confirmed plans this morning to unlock surplus funds from pension schemes for investment in the wider economy.
In her speech tomorrow Reeves is expected to signal support for the expansion of Heathrow while continuing with her recent deregulatory push.