Sir Keir Starmer unveiled “war bonds” today to rebuild Britain after the pandemic in a speech that shifted Labour closer to business and the centre ground while seeking to harness the spirit of the party’s victory of 1945.
Labour’s leader promised “creative thinking” emblemized by his proposal for “British Recovery Bonds”, by which the public would invest savings amassed in lockdown to fund start-ups, giving people “a stake in the national recovery”.
More significantly for the party’s long haul to Labour’s 2024 manifesto, he promised a sharply more pro-business stance, saying: “If we’re honest, for too long Labour has failed to realise that the only way to deliver social justice and equality is through a strong partnership with business.
“Under my leadership, that mindset will change.
“I believe in the power of active, enterprising government, working alongside British business.”
Firms were not there “just to be tolerated or taxed” said Sir Keir, “because I know that government can’t do this on its own.” He praised business for offering “a source of pride, dignity and prosperity” for millions of people.
At the same time, he sought to reassure Labour’s centre-left by praising the key role of the state. “None of this is possible if you don’t believe in the power of good government,” he appealed.
Sir Keir’s balancing act, in a speech, called “New Chapter for Britain”, sought to allay recent concerns that he has not bold enough about setting out his ideas. An Ipsos MORI poll for the Standard last week found that the public prefer to have Boris Johnson in charge of the rebuilding work after the pandemic – a verdict he desperately needs to change.
Setting out his idea of recovery bonds, he said Chancellor Rishi Sunak was mistakenly banking on a spending boom to power a recovery on consumption. “There’s an opportunity here to think creatively,” he said. “To build on the spirit of solidarity we’ve seen in the last year and to forge a new contract with the British people.”
Sir Keir signalled that small business should be the engine of recovery - but is critical that funds for start-up loans are skewed towards London. The capital spends nearly £1 in every £4 of loans, with £1 in every £20 going to the North East.
His rhetoric sought to capture the national mood at the time of the 1945 election, when Clement Attlee was handed a landslide majority by war-weary Britons to reconstruct Britain after World War II.
Sir Keir accused Boris Johnson of letting down “the wartime generation” in its “hour of need” by failing to protect care homes from Covid.
“If I were Prime Minister, I would introduce a new British Recovery Bond,” he said. “This could raise billions to invest in local communities, jobs and businesses …. And give millions of people a proper stake in Britain’s future.
“This is bold, it’s innovative and it’s an example of the active, empowering government I believe is needed…”
The Bank of England has noted that households accumulated over £125bn in excess savings by November 2020, estimated to reach £250bn by June.
Sir Keir added a personal touch, saying: “My dad worked on the factory floor his entire life. A steady, secure job allowed him to build a better life for his family. That’s why, when I think about business I see a source of pride, dignity and prosperity.
“And I know there’s no vision of a future where Britain fulfils its potential in which business does not thrive.”
He added: “That’s why, if I was Prime Minister, I’d back a new generation of British entrepreneurs.”
Attacking the Conservatives, he said: “During the last year, my thoughts have returned time and again to the wartime generation, those who suffered through the horrors of world war two, who rebuilt Britain from the rubble of the Blitz, created the NHS and built millions of homes fit for heroes.
“And I contrast that with how so many of them were let down in their time of need: Exposed to Covid in underfunded care homes, unable to say goodbye to families and loved ones.
“How can the Prime Minister now look those families in the eye and say: “We did everything we could”? The truth is that the Conservatives promised to fix social care for a decade, but never got round to it.”
He said the Conservatives were “indifferent to the moral and economic necessity of tackling inequality” and that had left Britain unprepared for the pandemic.