Keir Starmer speech

Keir Starmer speech

The government has "completely lost control of the economy", Labour leader Sir Keir Starmer has said.

The International Monetary (IMF) fund has openly criticised the UK's plans for tax cuts, warning the measures were likely to fuel the cost-of-living crisis.

Sir Keir told the BBC the Conservatives could "never again claim to be a party of fiscal responsibility".

But the Treasury said its plans were focused on growing the economy.

It argued this would "raise living standards for everyone".

Last week, new Chancellor Kwasi Kwarteng unveiled the biggest package of tax cuts in 50 years.

The pound slumped following his statement and later fell to a record low against the dollar after Mr Kwarteng hinted there were more tax cuts to come.

The Treasury said the plans would be funded by £72bn of borrowing and there is an expectation this will surge as interest rates rise. 

Sir Keir told BBC Radio 4's Today programme the IMF warning "underscores the seriousness of the situation" and argued the market turbulence was "self-inflicted".

He urged the government to "urgently review" the measures set out on Friday and said the plan to provide an update on debt in November was "too far away".

Asked about his own party's plans, Sir Keir said they were fully costed and would give the markets "confidence".

He added that Labour expected to inherit a "complete mess" if it won the next general election, but pledged to quickly return to its economic rules of only borrowing to invest.Labour has promised to reverse the government's plans to scrap the top rate of income tax and cut corporation tax.

However, Sir Keir has said his party supports the decision to cut the basic rate of tax.

Asked how this would be funded, he said: "We're going to inherit a situation where there is borrowing to fund that tax cut and like all incoming governments we'll adjust as quickly as we can to our fiscal rules."

The Treasury said Mr Kwarteng was due to publish his medium-term plan for the economy on 23 November, which would include ensuring that UK debt falls as a share of economic output in the medium term.

Tory MP Sir John Redwood, a prominent supporter of Prime Minister Liz Truss, dismissed the IMF's criticisms and urged people to judge the government's financial package as a whole.

"The IMF are coming from the errors of the past which they shared with the world's central banks," he told the BBC.

"They didn't foresee the big inflation which they triggered, they didn't have sensible advice in good time to see off the inflation - and now late in the day, when the inflation is very visible for all to see, they're suggesting taking measures to tackle it when the world has moved on."

He added that the IMF should be "warning the world about the coming recession" and the policies being followed in many leading countries, which "will be the enemy of the future".

On Monday the Treasury sought to calm markets by saying it would publish a plan to tackle debt on 23 November.

The prime minister was initially reluctant to intervene, according to the BBC's political editor Chris Mason.

But he said he had been told reports of a "shouting match" between Ms Truss and the chancellor were "plain wrong".

The IMF works to stabilise the global economy and one of its key roles is to act as an early economic warning system.

It said it understood the package aimed to boost growth, but warned that tax cuts could speed up the pace of price rises and increase inflation

webstory