Keir Starmer is pledging billions of pounds of extra investment in transport, schools and hospitals in his inaugural Budget as he insists he will not be swayed by “tailwinds” after his first 100 days in office.
In an interview with the Guardian, Starmer admitted his government needed to get back on track after the furor. Sue Gray and “freebies”, but she was adamant that she was “definitely not knocking”.
“There is always a crosswind. If you're not going to fail, you have to know where we're going,” Starmer said.
“The moment I allow myself to be caught in the crosswinds is where other governments have gone wrong, because they've lost sight of what the real point of government is.”
Starmer has made it clear that his central objective is to grow the economy. The government hopes the billions of pounds of public investment announced in the Budget will help Britain attract more private investment.
However, his plans for a major business summit next week were dealt a blow on Friday when logistics giant DP World pulled out of the conference and withdrew a planned £1bn investment in its London Gateway container port.
The move came in response to an interview in which the transport secretary, Louise High, criticized the company's employment practices, calling the company a rogue operator. In 2022, DP World's subsidiary P&O Ferries sparked outrage when it sacked 800 workers without warning, replacing them with lower-paid agency workers.
In an apparent attempt to backtrack on the summit, a Downing Street source said it did not reflect the government's views.
The Guardian understands that the budget will be presented as a prelude to “fixing the foundations” of the country, as the government uses all the levers at its disposal to grow the economy, with capital investment at the heart of its plans.
Starmer's words are a clear signal that the government is pushing ahead with plans to borrow tens of thousands of pounds more for infrastructure investment by changing how the funding rules are calculated.
Rachel Reeves, the chancellor, told Cabinet on Tuesday how the Treasury wants to change the way it calculates capital spending to reflect its benefits despite concerns about the rising cost of UK government debt.
A senior government source said the capital investment would invest in upgrading schools and hospitals, repairing crumbling buildings and medical diagnostic equipment to make the system more efficient.
Other areas of capital spending were expected to include money to invest with businesses such as rail and roads, as well as gigafactories and renewable energy projects.
The government wants to make a big case for long-term investment, but the chancellor, very clearly, needs to see a quick return on investment, improving services and providing good jobs.
“Investing and creating is common sense. If working people can't afford a decent home, they can't build good lives and careers,” Starmer told the Guardian.
“When people cannot get to work because public transport is bad, productivity suffers. If schools are collapsing over our children's heads, how can we expect them to learn the skills they need?
“And NHS waiting lists are through the roof, because there's not enough investment in hospitals and nowhere near enough technology to make treatment more efficient and effective.”
He added: “While other countries have moved on, built on scale and taken advantage of new technology, Britain has been left with their outdated ideas and outdated services.”
However, MPs are concerned whether long-term promises of investment will go down well as voters face immediate challenges from some Labor winter fuel and benefit caps. A backbencher said: “Nothing I hear gives us much to sell on the doorstep. It was lucky that the elections did not take place for another four years.
After months of doom and gloom from the government surrounding the state of economic inheritance from the Tories, Starmer admitted that people needed “a bit of sunny upland” to give them hope for the future.
“I was like, 'What's that for?' To get,” he said. “It's starting to look like, if you can tell people this is your best life… we can't deliver what we need to deliver until we fix the foundations.”
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Tough decisions on issues such as donations, internal power struggles and the winter fuel bill – Starmer admits his first months in office have been tough – but that is hardly surprising.
“It was more than I expected. The thesis is that government is hard, but that government is good. Difficult because you have to make difficult decisions. Great because you can make decisions and make a difference.
Still, he brushed aside some of the criticism the government has attracted, listing dozens of key decisions the government has already made since it took office and saying there will always be those who want more.
“You always get people's attention. I do this myself at Arsenal games, as do 59,999 others. The same is true in politics. But only the manager knows what the game plan is for this match,” he said.
“There will always be people who say go fast, go slow, go up, go down, that's the nature of the beast. But are we on track? Yes.”
However, he admitted that it was difficult to accept the gifts – including thousands of pounds worth of glasses, clothes and tickets – while coming under sustained fire, especially when his family were drawn into it.
“I'm not going to make it sweet, because of course it wasn't sweet, but it wasn't the first experience, and I doubt it will be the last.”
He said he understood why he had repeatedly been pressured on donations and why the public were so angry after being promised a Labor government would be different to the previous one. “Yes, I can see that. I can see why you and others ask as many questions as you can.
But he rejected the view taken by some that the sequence proved that all politicians are the same. “No, I don't agree with that. Look at what has happened before, it's covid deals, it's not actually complying with the rules, it's lying to parliament. It's a million miles away from it all.
Weeks after the election, the government announced it would cut winter fuel bills for all but the poorest pensioners, a decision that caused public uproar. “It was one of the hardest decisions I had to make. Hard decisions are hard decisions, they're not popular decisions,” he said.
The government argued the move was necessary to plug a £22bn black hole left by the Tories, and pensioners would actually end up better off as a result of the pension tripling, but many Labor MPs feared it was a serious misstep. Prove a disaster this winter.
Despite just over three months in the job, Starmer is already facing public disillusionment, with polls showing his personal approval ratings have hit record lows. He emphasized that the government has realized that it needs to make changes to restore confidence in politics.
“I have a great responsibility. My job is to deliver, and I'm going to decide on delivery. Ultimately, I want people to be better off under a Labor government, I want to look at people and say we've changed the way our economy works, so you're better off.
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