Keir Starmer: ‘We can’t win power by spending. We need to reform and create wealth’ | Keir Starmer

Labour will only succeed in winning power and rebuilding Britain if it prioritises economic growth, wealth creation and radical reform of public services over reckless spending promises, says Keir Starmer.

With four days to go before a crucial set of parliamentary byelections, the Labour leader delivers the most robust defence to date of his strategy for returning his party to power after 13 years, in an exclusive article for the Observer. Starmer takes on, directly, those who say his agenda is dull and uninspiring, insisting that the hard grind of rebuilding economic credibility must come first, as opposed to Labour retreating to its normal “comfort zone” of promising “vast sums of money”.

“Taking seriously the foundations of economic responsibility may not set people’s pulses racing,” Starmer writes, “but the new country we can build on top of them will do.”

He calls on those on the traditional left to accept that, once in power, economic growth, investment and wealth creation will be the “only show in town” if Labour is to build a prosperous country with strong public services for the long term.

“Frankly, the left has to start caring a lot more about growth, about creating wealth, attracting inward investment and kickstarting a spirit of enterprise,” he says.

“It is the only show in town for those who dream of a brighter future.”

The determination of Starmer and his shadow chancellor, Rachel Reeves, to be seen as economically responsible above all else has caused some on the left to fear they could blow the party’s chance of power and come to be defined by excessive caution, defensiveness and lack of ideas.

On Saturday, Sharon Graham, the general secretary of Unite, said the union could reduce the amount of money it gave to Labour if the leadership did not back more of its policy priorities, saying “people want something to vote for”.

Starmer emphatically rejects such criticisms, insisting that his five key policy missions on growth, clean energy, the NHS, crime and “shattering the class ceiling” are truly ambitious and can be delivered without splashing huge amounts of cash.

His aides point out that policies to mend a broken public realm have to be devised within the bleak economic conditions the Tories have created. The economic outlook, they say, is far worse than that faced by Tony Blair and New Labour before the 1997 general election.

Starmer says public services can and must be reformed without vast sums of money – “it is reform or bust”, he says.

The answer, he adds, lies in adopting new approaches, such as empowering those on the frontline to deliver services geared more closely to the personal needs of those who use them. Rejecting one of the big ideas of New Labour, Starmer says: “Not top-down targets that try to bludgeon skilled professionals into inefficient processes but empower those on the frontline to deliver real improvements.”

Starmer’s intervention comes as Labour attempts to make history on Thursday by overturning a majority of more than 20,000 in the Conservative heartland seat of Selby and Ainsty in North Yorkshire. This weekend, it is continuing to pour resources into the campaign.

Labour is also expected to win Boris Johnson’s old seat of Uxbridge and South Ruislip in west London, but officials report that the Tories are having some success in focusing voters’ concerns on London mayor Sadiq Khan’s plans to expand the capital’s ultra-low emission zone.

In the third byelection on Thursday, the Liberal Democrats, rather than Labour, are the main challengers to the Tories in Somerset and Frome.

Labour insiders say they have amassed data from hundreds of thousands of interviews with voters that shows most people are now so distrusting of politicians that they would not believe their promises, whoever made them. The first task, Starmer’s team believes, is therefore to recreate that trust by being credible.

Tensions within Labour about its cautious approach are most likely to come to a head next weekend, when Labour officials meet with unions, MPs and affiliated groups at its national policy forum (NFP) in Nottingham. The event, a formal part of Labour’s policy development programme, will see the leadership pushed to adopt policies such as proportional representation, the abolition of the two-child policy and universal free school meals for state primary schools in England.

While the decisions made are not binding on Starmer, shadow cabinet ministers have warned that it will be a “difficult moment” for the leadership. Some of those involved are now aiming to stop Starmer from dumping more of the policy programme he had previously endorsed, such as a commitment to increase sick pay.

“The caution at the top of the party is so extreme that we’re even watering down or rejecting the policies we’ve already announced,” said one figure involved in the process.

“Under Blair, we established Sure Start, led a global debt-cancellation programme and increased health and education spending. Where’s the ambition now? If we win the next election, we’re going to inherit an economy in far worse shape than in 1997 – if we don’t invest and offer some real solutions, we’re just creating a rod for our own back.”

It will also be a moment for Labour’s left to attack Starmer’s approach. “As Labour members, unions and conference recognise, fixing their mess requires real ambition, with nationalisation of our failing, privatised public services, real investment in our decaying infrastructure and an end to the scourge of low pay,” said a Momentum spokesperson.

“That’s why, at the NPF next week, Momentum-backed reps will make the case for policies like public ownership of our utilities, free school meals, rent controls and the restoration of British democracy. The case for transformative change in the interests of the many has never been stronger or more popular – we urge the leadership to heed it.”