Sir Keir Starmer has stressed his commitment to the government’s fiscal rules and reiterated he would not increase national insurance, VAT or income tax, despite Donald Trump’s tariffs upending government economic policy.
The Prime Minister called for “cool heads” as global markets plunged in response to the US President’s sweeping global import taxes, and said the UK had to “rise together as a nation” in the face of a new era of global instability and a “completely new world”.
It came as the value of US stocks dropped sharply as markets opened on Monday afternoon, following falls in London and across Europe and Asia earlier.
Speaking at a Jaguar Land Rover plant in the West Midlands this afternoon, Sir Keir was asked whether he could guarantee the government’s fiscal rules wouldn’t change.
The current fiscal rules state that Chancellor Rachel Reeves cannot borrow to fund day-to-day spending, and that debt must be falling as a share of national income by the end of a five-year forecast period.
Starmer told journalists and car plant workers: “The fiscal rules were put in for a purpose, and that is because Liz Truss tried an experiment with this country, of putting to one side fiscal rules and checks and balances, and that caused a massive impact on the lives of working people.”
He insisted Labour is “not prepared to inflict that kind of damage on working people” and stressed: “That’s why we put the fiscal rules in the first place to create that kind of stability.
“It’s why we were able to invest the budget, and set out, as we did, the steps for the future in the spring statement. Now is the time to build on that.”
And he added: “The reaction to the challenges of the last few days is not for us to say the first thing we will do is put on one side our fiscal rules.
“There is enough uncertainty and insecurity as it is. Our job is to calmly and pragmatically take forward these really important steps today for our country.”
The Prime Minister was also asked whether he was still committed to not raising national insurance, VAT or income tax in this parliament.
He said: “We made that commitment in the manifesto and we were absolutely clear about it going into the budget and the spring statement.
“That is a commitment that we have made and a commitment that we will keep. The first lever can’t be more taxes.”
His comments came during a speech which saw Starmer pledge to slash the number of days it takes to set up a clinical trial from “over 250” to 150, in a boost to the UK’s medical science industry, and new investment of up to £600m in a new health data research service.
Starmer also eased targets on some electric vehicles and after Trump’s tariffs began hitting the car UK industry, and described Britain’s life sciences sector as a “shining example of British brilliance, absolutely pivotal part of our export economy”.
He vowed to “rip up the red tape, cut the stifling bureaucracy that slows down clinical trials” amid plans to standardise the contracts used to set up clinical trials and publish trust-level NHS data on clinical trials for the first time.
