Tories “won’t offer change, because they can’t”, Starmer says following Budget

Keir Starmer has declared that the Tories “won’t offer change, because they can’t” in response to today’s Budget and accused the government of turning the UK into the “sick man of Europe once again”.

Responding to Jeremy Hunt’s statement this afternoon, the Labour leader argued that the economy “needed major surgery” after 13 years of Conservative government, adding: “But like millions across our country, this Budget leaves us stuck in the waiting room with only a sticking plaster to hand.”

Starmer told MPs that the government had made the “same old Tory choices”, based on the “same three principles: ‘sticking-plaster politics’, no growth for the many, working people pay”.

He said: “They could have used sensible taxation policies on non-doms or the oil and gas companies and made the money work for working people. They could have tackled the vested interests that gum up our planning system and shown real ambition on the investment we need to turn us into a green growth superpower.

“That was the test today. Can we move beyond the usual sticking-plaster solutions and set a new direction for growth that serves the interests of working people?

“But I’m afraid the verdict on this Budget is clear. They won’t offer change, because they can’t. And so our course is set – managed decline. Britain going backwards. The sick man of Europe once again. That’s the Britain they’ve created, and they should look it in the eye.”

Among the measures announced by the Chancellor today were an expansion of free childcare provision to provide 30 hours to one- and two-year-olds in England. But the policy will not be fully implemented until September 2025, with an initial extension of only 15 hours of free care to working parents of two-year-olds in April 2024.

Hunt also confirmed that families receiving Universal Credit will now be given childcare support up front rather than in arrears and announced £600 “incentive payments” for new childminders, along with a relaxation of rules in England on the staff-to-child ratio.

The Chancellor announced that sanctions would be applied “more rigorously” on people on benefits who “fail to meet strict work-search requirements or choose not to take up a reasonable job offer”. He also said £63m would be spent on programmes to encourage the over-50s back to work.

He revealed that the lifetime allowance – the cap on the amount workers can accumulate in pensions savings before paying extra tax, previously set at £1.07m – would be scrapped and that the tax-free yearly allowance for pensions would rise from £40,000 to £60,000.

Starmer condemned the plan for pensions as a “huge giveaway to some of the very wealthiest”, declaring: “The only permanent tax cut in the Budget is for the richest 1%. How can that possibly be a priority for this government?”

Hunt confirmed that a planned rise in the energy price guarantee – which limits the amount suppliers can charge per unit of energy used – would be cancelled, meaning energy bills for a typical household will continue to be limited to £2,500 a year for the next three months.

The Chancellor also announced that energy costs for consumers on prepayment meters would be brought into line with those paying by direct debit – a move Labour has been calling for since last August, as noted by Starmer in his response.

“Over the course of the whole cost-of-living crisis, time and again, it’s Labour who bring the government, not just to its senses, but to our position,” Starmer said.

Hunt confirmed that corporation tax will rise in April from 19% to 25% but said only 10% of firms would be subject to the full 25% rate. Companies with profits between £50,000 and £250,000 will pay between 19% and 25%.

The Chancellor also announced that, for the next three years, firms will be able to deduct investment in new machinery and technology from their taxable profits – in a move he said would be worth an average of £9bn a year.

He set out plans for 12 new investment zones across the UK and announced £200m for local regeneration projects in England, £400m for new ‘levelling up’ projects and £8.8bn for a second round of city region sustainable transport settlements, with equivalent funding for Scotland, Wales and Northern Ireland.

Starmer welcomed the planned devolution deals, telling MPs: “The principle that we should push power out of Westminster is fully supported on this side of the House. In fact, we want him to go further. Communities beyond Birmingham and Manchester deserve the right powers, and the same powers, to drive growth.”

But he criticised the Chancellor’s failure to “match Labour’s ambition” with a commitment to expand the NHS workforce, arguing: “if ever there was a symbol of the poverty of ambition, that is it”.

The Labour leader argued: “The reality is a country getting sicker is a country getting poorer, and a country getting poorer is a country getting sicker. Health and wealth must go together. Britain can’t afford to be the sick man of Europe. Britain can’t afford the Tories.”

Below is the full text of Labour leader Keir Starmer’s response to the Budget delivered by Chancellor Jeremy Hunt this afternoon.

Thank you madam deputy Speaker. So for all the hype, a Budget for growth that downgrades the growth forecast. His opening boast was that things aren’t quite as bad now as they were in October last year after the kamikaze Budget. And the more that he pretends everything is fine, the more he shows just how out of touch they are.

After 13 years of his government, our economy needed major surgery. But like millions across our country, this budget leaves us stuck in the waiting room, with only a sticking plaster to hand. A country set on a path of managed decline, falling behind our competitors. The ‘sick man of Europe’ once again.

This was a day for ambition, for bringing us together with purpose and intent, for unlocking the pride that is in every community and matching their belief in the possibilities of the future. But madam deputy Speaker, after today, we know the Tory cupboard is as bare as the salad aisle in our supermarkets. The lettuces may be out, but the turnips are in. A hopelessly divided party, caught between a rock of decline and a hard place of their own economic recklessness, dressing up stagnation as stability as their expiry date looms ever closer.

The figures published today spell it out. A year of stagnation. Growth, non-existent. According to the IMF: the worst performing country in the G7 this year, a prediction today confirmed by the OBR, and growth downgraded in years to come. This is a failure you can measure, not just in the figures, but in the empty pockets of working people right across the country. 13 years without wage growth. 13 years, no better off. 13 years stuck in a doom-loop of lower growth, higher taxes and broken public services.

And, madam deputy Speaker, as the OBR makes clear, things don’t look any better in the long-run. A broken labour market holding back our prospects. Seven million on the NHS waiting lists. Ill health and disability on the rise and the consequences as we’ve just heard, deferred to the future. The classic short-term, ‘sticking-plaster’ cycle. Decisions, cynically ducked today, pain for working people tomorrow.

It doesn’t have to be like this. Britain has enormous potential. On science, innovation, technology, we should be leading, not lagging. We need an industrial strategy that removes barriers to investment. The announcements today are nowhere near the mark. The lowest investment in the G7, that’s their record. All our competitors know this. They’re gearing up for an almighty race for the opportunities of tomorrow. We’ve got to be on the start line, not back in the changing room, tying our laces.

He mentions the war in Ukraine. And of course on this side of the House we stand with Ukraine, and we stand with the government’s response to Putin’s brutality. We will look carefully at the details of the military spending announced, and we will support them.

But what we cannot accept is the use of the war as a blanket excuse for failure. Our economy has weak foundations, global crises hurt Britain more than other countries. Wages in this country are lower now in real terms than they were 13 years ago. The average French family is a tenth richer. The average German family is a fifth richer. Countries which faced the same pandemic and countries which face the same war.

The war didn’t ban onshore wind. The war didn’t scrap our home insulation scheme. The war didn’t run down our gas storage facilities. They did. Decisions which hurt working people battling the cost-of-living crisis right now. It’s been the same story for the whole 13 years: always the sticking plaster, never the cure. Today’s Budget does nothing to change that. Again, we hear the excuse of global events. But again, we see a failure to grip the long-term challenges. No determination to create growth which unlocks the potential of the many. Working people being made to pay for Tory choices and Tory mistakes.

Madam deputy Speaker, these are the organising principles of Conservative economics, judge them by their choices. The running down of our public services, paid for by working people. The disaster of the Tory mortgage premium, paid for by working people. The opportunities still missed for a proper windfall tax, paid for by working people.

That’s what makes the Chancellor’s boasts about lower inflation so ridiculous. The idea that it’s a tax cut, the British people can see through that. They see their tax burden at its highest for 70 years, and they know it’s not the government that’s lowering inflation. It’s working people, earning less, enjoying less. It’s their sacrifices that are helping to bring inflation down. They deserve better than another cheap trick from the government of gimmicks, making them pay while trying to claim the credit.

Even with the price guarantee, the average energy bill has doubled in 18 months. Because of their recklessness, the average mortgage payment is up £2,000 a year, a massive hit to living standards, however they cook the books. And yet still no real ambition on industrial strategy. No real ambition on the clean energy that will give us cheaper bills. No real ambition on house building. The same old Tory choices: sticking-plaster politics, no growth for the many, working people pay.

Let’s turn to “his” policies on the cost of living. And madam deputy Speaker, I say “his” policies because there’s a history to this, a pattern. Over the course of the whole cost-of-living crisis, time and again, it’s Labour who bring the government, not just to its senses, but to our position. Who first pushed for the energy price guarantee? Labour. Who first called for a proper windfall tax? Labour. Who first stood by people on pre-payment meters? Labour. Who first said we should freeze the price guarantee this April? Labour.

We can go on. Because it’s also Labour that first committed to extending the fuel duty cut, a policy that in January the Chancellor dismissed, a key part of a dossier he published. So, for one poor soul in their research team at least, this really is a “back to work” budget. A word of advice to the Chancellor, as he promotes this policy in the coming days, use your own car. And for heaven’s sake, make sure you know how to use a debit card. And we look forward to the Prime Minister promoting the swimming pools policy. Unlike the car, he won’t have to borrow one of those.

But madam deputy Speaker, the cost-of-living crisis is not over. Once again, they’ve left money on the table when it comes to the oil and gas companies. Money that could be better spent on working people. Politics is about whose side you are on, there are loopholes that urgently need closing. Even the former CEO of Shell admitted that they should be paying more. And the long-term plan just isn’t there. The same old Tory choices, those same three principles. Sticking-plaster politics. No growth for the many. Working people pay.

You see those principles at play in our broken labour market. Much of what the Chancellor said today focused on that, as well it might. The figures announced in this Budget show how damaging the current situation is to growth, a long-term drag on our ability to create more wealth. Our inactivity levels are particularly shocking, up half a million since the pandemic. The worst jobs recovery in the G7. More people unable to work because of ill health than ever before.

Now we will look at what the Chancellor has announced today because on these benches we have long called for reform of the work capability assessment. For a welfare system that supports people with disabilities and long-term health conditions to thrive at work. The Universal Credit system must help people into employment and childcare is a huge barrier to that – we’ve made the case for reform.

On childcare, of course more money in the system is obviously a good thing. But we have seen the Tories expand so-called free hours before and as parents up and down the country know, it’s no use having more free hours if you can’t access them. And it pushes up the costs for parents outside the offer. That’s what we’ve seen before.

And on pensions, he made a big spending commitment which will benefit those with the broadest shoulders when many people are struggling to save into their pension. We needed a fix for doctors, but the announcement today is a huge giveaway to some of the very wealthiest. The only permanent tax cut in the Budget is for the richest 1%. How can that possibly be a priority for this government?

The truth is our labour market is the cast iron example of an economy with weak foundations. Our crisis in participation simply hasn’t happened elsewhere – not to this extent. It’s a feature of Tory Britain and global excuses won’t wash. We need a wider reform agenda. Instead of making working people pay, we need to make work pay. Move on from growth that is based on insecure, low-paid jobs, to growth which comes from good work, from strong employment rights, that can deliver higher productivity. Growth from the many, for the many, that makes people better off – in all parts of our country.

I welcome his announcements on devolution deals. The principle that we should push power out of Westminster is fully supported on this side of the house. In fact, we want him to go further. Communities beyond Birmingham and Manchester deserve the right powers, and the same powers, to drive growth as well.

But madam deputy Speaker, the Chancellor is a former Health Secretary, a published author on health, no less. He even gave me a signed copy of his book. He knows that growth needs an NHS fit for the future. And no country can be fit for work when there are seven million people on hospital waiting lists. So I was waiting for him to match Labour’s ambition, waiting for him to match our plan to train more doctors and nurses, to tackle the capacity crisis – a policy he publicly praised just 15 days before becoming Chancellor. And yet it never came.

Madam deputy Speaker, if ever there was a symbol of the poverty of ambition, that is it. Because the reality is a country getting sicker is a country getting poorer, and a country getting poorer is a country getting sicker. Health and wealth must go together. Britain can’t afford to be the sick man of Europe. Britain can’t afford the Tories.

And there is another way. On these benches, we understand institutions must be respected. Constraints, accepted. That fiscal rules should be sound and followed rigorously. That every pound is precious and must not be wasted. They want to shout about their record, let them shout. Wages – lower. Taxes – higher. Borrowing – higher. Debt – higher. Their chaos has a cost.

Certainty is vital for the growth we need, essential for businesses and investors in our country. As we’ve spelt out: compared with a blanket cut to corporation tax, investment allowances are the right approach. But the question many businesses will ask today is: how long before the wind blows again and we go through all this again?

And that’s what they don’t understand about business investment. Their endless infighting on tax is bad for growth, in and of itself. Real stability means taxes don’t go up and down like yo-yos. That the R&D tax credit regime doesn’t get overhauled twice in six months.

Let me give an example of that instability. It’s a bit of a fraught subject at the moment, but when he was Culture Secretary, the Chancellor apparently took some lessons on the rules of football. So let me provide a refresher. The amount of times his government has broken their fiscal rules is 11, that’s one football team. The amount of times they’ve changed corporation tax policy is 22. That’s two teams, you’ve got a game. But if he wants the post-match analysis, he’ll have to consult the experts. Back on his screens and ours this weekend, I know the whole house will want to applaud that.

But madam deputy Speaker, a budget is not just about the choices made, but the choices ignored. Britain needs more than certainty for growth, that’s the least we should expect. We need change. Stability and success. Anyone listening to this worried about NHS waiting lists, about crime going unpunished – they don’t want to hear about the waiting lists. They don’t want to hear about the crime going unpunished. House-building rates falling, they don’t want to hear about that either – they will have heard very little that makes them feel hopeful about our future.

They could have used sensible taxation policies on non-doms or the oil and gas companies and made the money work for working people. They could have tackled the vested interests that gum up our planning system and shown real ambition on the investment we need to turn us into a green growth superpower. That was the test today. Can we move beyond the usual sticking-plaster solutions and set a new direction for growth that serves the interests of working people? But I’m afraid the verdict on this Budget is clear. They won’t offer change, because they can’t. And so our course is set – managed decline. Britain going backwards. The sick man of Europe once again. That’s the Britain they’ve created and they should look it in the eye.

Because today’s figures on growth put their failures up in lights. After 13 years of Tory sticking-plaster politics. 13 years of no growth for the many. 13 years of being asked to pay. Working people are entitled to ask – am I any better off than I was before? And after 13 years, with no excuses left, nobody left to blame, no ambition or answers, the resounding answer is: no. And they know it.