Keir Starmer: Tory leader hopefuls in arms race of fantasy economics

Labour leader Sir Keir Starmer has accused Tory leadership contenders of entering an "arms race of fantasy economics", in a speech setting out his party's vision for government.

Sir Keir said the Tory challengers had made £200bn of unfunded tax and spending commitments in recent days.

He said this showed "hypocrisy", as they had backed tax hikes introduced by Prime Minister Boris Johnson.

Tax has become a key battleground in the race to succeed Mr Johnson.

Eleven Tory MPs have now launched bids to replace Mr Johnson as Tory leader and prime minister after he lost the support of his party and resigned in dramatic circumstances last week.

While most candidates have pledged to cut taxes in various ways, none have outlined detailed plans about how they intend to fund these policies.

Former cabinet ministers Sajid Javid and Jeremy Hunt have vowed to cancel next year's planned hike in corporation tax from 19% to 25%, and reduce the rate to 15%.

Newly appointed Chancellor Nadhim Zahawi, Transport Secretary Grant Shapps, Attorney General Suella Braverman and former minister Kemi Badenoch have also pledged to curb taxes.

Delivering a speech in north-east England on Monday, Sir Keir said: "I cannot believe what we are hearing from the candidates to be the next Tory leader.

"The Tory leadership race hasn't even officially begun yet but the arms race of fantasy economics is well under way."

Sir Keir said they "nodded along and trooped through the voting lobbies" to support tax increases brought in by Mr Johnson's government.

"Now, it turns out they were opposed to them all along. The hypocrisy is nauseating," Sir Keir said.

If Labour were in government, Sir Keir said, the party would be "honest about how we fund every single thing we promise".

In his speech, Sir Keir set out Labour's vision to "deliver a fresh start for Britain", saying he wanted to reboot the economy, re-energise communities, and re-vitalise public services.

He said this political mission "cannot be achieved unless we get our economy growing again".

"So let me tell you now: Labour will fight the next election on economic growth," Sir Keir said. "The first line of the first page of our offer will be about wealth creation."

He spoke of plans to "make and sell more in Britain", reform the post-Brexit deal for Northern Ireland, and invest £28bn a year on the transition to a green economy.

When asked repeatedly, Sir Keir could not say whether Labour would reverse increases in National Insurance - and he did not spell out plans for income tax or corporation tax.

Under Sir Keir's management, Labour has sought to distance itself from the policies of its former leader, Jeremy Corbyn, and position itself as the party of business.

But Labour grandees have called on Sir Keir to finesse and spell out his policy platform in more detail ahead of the next general election.

Last month Lord Mandelson - one of the architects of New Labour and former Prime Minister Tony Blair's communications chief - used a speech to urge Sir Keir to "accelerate" the development of policies.

"Labour has come a long way since the last election in 2019 when Jeremy Corbyn marooned us on fantasy island but given everything that's happening now in the Conservative Party, the time is right for Labour to raise its sights and accelerate its own policy thinking ahead of the next election," Lord Mandelson said.