Keir Starmer considers £20bn borrowing plan during Italy trip

During a recent trip to Italy, Keir Starmer emphasized the importance of economic growth as the primary focus of his government. He stated that all Budget proposals would be evaluated based on their potential to promote growth, indicating a willingness to reject those that could hinder it. Starmer hinted at the possibility of rewriting Labour's fiscal rules to allow for an additional £20 billion in borrowing, which could alleviate the need for immediate spending cuts but would increase future debt burdens. He acknowledged the necessity of cautious measures to avoid deterring private investment and risk-taking in the economy. Starmer's comments come amid concerns that some proposed measures, such as raising capital gains taxes, could negatively impact economic growth. He stressed the importance of stability for fostering growth and indicated that immediate action is required to address a £22 billion budget shortfall attributed to the previous Conservative government. Starmer is committed to tackling this issue head-on rather than postponing it. The Labour leader's approach suggests a balancing act between investing for growth and maintaining fiscal responsibility. He criticized unfunded commitments for spending, equating them to the previous government's tax cuts, and underscored the need for a stable economic environment. Starmer's strategy reflects a broader aim to ensure that Labour's fiscal policies do not replicate past mistakes. As the October 30 Budget approaches, Starmer's statements signal a potential shift in Labour's fiscal strategy, with an emphasis on borrowing to invest while also addressing immediate fiscal challenges. This approach aims to stabilize the economy and promote long-term growth, setting the stage for Labour's economic agenda moving forward.