Sir Keir Starmer to warn economy in perilous state as he vows to 'fix the foundations'

Sir Keir Starmer will vow on Tuesday to “reverse a decade of decline” and to “fix the foundations” of the UK economy.

Delivering a much-trailed speech in the gardens of Downing Street ahead of parliament’s return next week, the prime minister will acknowledge the state of the public finances but pledge to “do the hard work needed to root out 14 years of rot” as he continues to place the blame on the former Conservative government.

And he will insist his administration will not continue with “business as usual” now Labour are in power, instead saying there will be “no more politics of performance, papering over the cracks, or division and distraction”.

But Conservative Party chairman Richard Fuller said it would be “nothing but a performative speech to distract the public from the promises Starmer made that he never had any intention of keeping”.

Since taking office almost eight weeks ago, the government has been reiterating its claim it has been left with a £22bn “black hole” in the Treasury by the Tories, with even reserve funds of £9bn having been spent “more than three times over”.

And while growth has been better than expected in recent months, public borrowing is at a record high and inflation crept up again in August.

The government has already announced it will seek to claw back some of the deficit via a controversial decision to end winter fuel payments to all pensioners who do not receive pension credit, as well as delaying social care reforms and demanding all departments find savings worth an estimated £3bn.

However, ministers have also signed off on large-scale pay deals with both junior doctors and train drivers, and promised investment into its priorities, including a new border security command and the hiring of new teachers.

Speculation is rife that Chancellor Rachel Reeves will increase taxes when she delivers her budget in October, despite Labour’s election pledge not to hike levies on “working people”.

But it is not yet clear who will be targeted to raise the funds needed, and the government insists it will continue to focus on growing the economy.

Giving his speech to around 50 people he met on the campaign trail, the prime minister will say: “When I stood on the steps of Downing Street two months ago, I promised this government would serve people like you… those serving the community and the country every day.

“I promised that we would get a grip on the problems we face, and that we would be judged by our actions, not by our words.”

He will add: “We will do the hard work needed to root out 14 years of rot and reverse a decade of decline.

“We’ll fix the foundations, protecting taxpayers’ money and people’s living standards. We’ll reform our planning system to build the new homes we need. We’ll level up workers’ rights so people have security, dignity and respect.

“We’ll strengthen our border security. We’ll crack down on crime. We’ll transform public transport. And we’ll give our children the opportunities they need to succeed.”

Sir Keir will say his government “won’t always be perfect”, but working people would “be at the heart” of what it does, adding: “That’s why I wanted to invite you here today. To show that the decent, hard-working people who make up the backbone of this country belong here and that this government is for you.

“A garden and a building that were once used for lockdown-breaking parties, are now back in your service.”

The prime minister is also expected to discuss what he calls a “societal black hole” he believes was left by the Tories too, as he promises to be “honest with people about the choices we face”.

Commenting on the riots that plagued the summer, Sir Keir will say: “The riots didn’t just betray the sickness, they revealed the cure, found not in the cynical conflict of populism but in the coming together of a country the morning after and cleared up their community.

“Because that is who we are, that is what we stand for. People who cared for their neighbour. Communities who stood fast against hatred and division. Emergency services who did their duty – even when they were in danger. And a government that put the people of this country first.”