Labour leader Keir Starmer: Scrap UK tax hikes, benefit cuts, and key worker pay freeze

Tom Belger
·Finance and policy reporter
·4-min read
British Labour Party leader Keir Starmer speaks to members of the media, in London, Britain January 10, 2021. REUTERS/Simon Dawson
British Labour Party leader Keir Starmer on 10 January ahead of a speech on the economy. Photo: REUTERS/Simon Dawson.

Labour leader Keir Starmer has urged the government to scrap plans for council tax hikes, benefit cuts, and a pay freeze for key workers.

The opposition leader also used one of his first speeches on the economy to provide new lifelines to Britain’s working families, self-employed and struggling renters, homeowners and high streets.

He said on Monday Britain had ended 2020 with not only the worst European death toll but also the deepest recession of any major economy. Such an outcome was not inevitable or “bad luck” but a result of “repeated delay and incompetence.”

Labour analysis suggests the crisis has cost the economy £5.3bn ($7.1bn) a week, the NHS £1bn a week and 23,000 job losses a week, its leader said in a live broadcast.

READ MORE: Will Britain see higher taxes and interest rates soon?

Starmer called for:

  • Gaps to be filled in crisis income support for the self-employed, with their exclusion from government schemes since March “totally unforgivable.”

  • A new right to request paid flexible furlough for working parents.

  • The creation of 400,000 new jobs in low-carbon sectors, to ensure a “green recovery.”

  • A government High Street “fightback fund” to protect retailers.

  • The extension of last year’s £1,000 boost to universal credit and working tax credits, which is due to expire next April—leaving households an estimated £20 a week worse off.

  • A U-turn on chancellor Rishi Sunak’s decision to allow a council tax and social care levy hikes of up to 5% by local authorities. Labour analysis suggests households in properties in England and Wales’ council tax band D could see a £90 increase in April.

  • Pay rises for key workers including teachers, care workers and the armed forces, who face a controversial pay freeze under Sunak’s plans to cut government spending. “This is the government that gave Dominic Cummings a £40,000 pay rise but won’t pay our carers a decent wage,” said Starmer.

  • An extended ban on home evictions and repossessions for the duration of national lockdown restrictions.

Asked by journalists about how Labour would rebuild Britain's public finances in years to come, Starmer said he was focused on more immediate issues but admitted there would "have to be long-term answers."

WATCH: Nurseries should ‘probably’ close, Starmer says

“When we come out of this crisis, I want Britain to be the best country to do business in. High-tech, high skills, high pay and looking to the future,” said Starmer, in a marked shift in tone compared to Labour’s former leader Jeremy Corbyn.

He added that Britain should be "immensely proud" of the role firms that played in the pandemic, from maintaining food supplies and making PPE to producing the vaccine.

The Labour leader said the coronavirus crisis must be followed by an ambitious rebuilding programme, though declined to spell out further details.

“We can build a country worthy of the sacrifices of the British people. Just as we did in 1945 when Attlee’s government built the welfare state from the rubble of war,” he said.

READ MORE: Pound falls as lockdowns and Brexit disruption hit UK economy

Pressed for more concrete economic proposals by BBC presenter Andrew Marr on Sunday, he said it was “too early” to predict the outlook by the time of the next election. “When it gets to 2024, I will spell out in great detail what an incoming Labour government will do.”

Labour also confirmed on Monday it had written to five major UK business groups. The party urged employers to give staff paid time off for vaccinations, use their platforms to promote the vaccine and support staff to volunteer for the NHS.

Amanda Milling, co-chair of the Conservatives, said: “Keir Starmer is once again calling for actions the Conservatives are already taking in government.

“We have delivered an unprecedented £280bn package of support to protect jobs, livelihoods and public services through this pandemic: paying the wages of nearly 10 million workers through our furlough scheme, increasing universal credit by £1,000 and giving councils extra funding to help the most vulnerable.”