Keir Starmer: We must “accept the consequences” of our iron fiscal rules

Labour leader Keir Starmer has warned in a major speech on the party’s green energy mission that “we must accept the consequences” of fiscal rules, warning working people will pay the price if Labour “lose control of the economy”.

He spent much of the speech setting out Labour’s green agenda, including announcing that Great British Energy would be based in Scotland and stressing that it would be publicly owned, as well as setting out plans to reform the planning system to enable renewable energy expansion.

Starmer announced too that a new “British Jobs Bonus” will be launched, aimed at attracting new investment, jobs and supply chains, though detail was limited.

But he also appeared to acknowledge the significant trade-off Labour faces between managing the public finances in a way perceived as responsible, and the party’s ambitions for government.

He underlined Labour’s focus on maintaining economic credibility, highlighting a set of self-imposed “iron” rules on how the party handles tax, spending and borrowing, aimed at reassuring investors and voters. The Tories also have a set of fiscal rules in place in government, though they have been repeatedly re-written.

“Day-to-day spending will be completely covered by the taxes we collect, and we will get debt as a share of our economy falling by the end of the next parliament. These are iron rules, and we must accept the consequences, because if you lose control of the economy, it’s working people who pay the price. We cannot let that happen.”

He added: “This is the bread and butter of responsible government. Our rules are essential for the British people and investors in our country.”

Starmer said Rachel Reeves’ fiscal rules, first set out two years ago, have proved “resilient” and “far-sighted”, arguing that they will “save our public finances money in the long run”.

Plans for the “infrastructure of tomorrow” will be within these “iron” fiscal rules, Starmer stressed, further commenting that Labour’s green transition plans “must be built on a rock of economic stability”, and that Labour’s manifesto would be fully costed.