AUSTERITY is Labour’s economic agenda, Sir Keir Starmer announced today in a further lurch to the right.

A Labour government will not “turn on the spending taps,” the Labour leader said in remarks aimed at appeasing the City and the Treasury.

He acknowledged that public services are “on their knees” but offered little prospect of getting them back on their feet again.

Sir Keir has prioritised bringing down debt and has vowed not to increase taxes on business or the wealthy, leaving himself no room to repair the damage wrought by 15 years of capitalist crisis.

This latest dilution of Labour’s plans for government came just a day after Sir Keir went out of his way to praise former Tory prime minister Margaret Thatcher for shaking Britain out of its “stupor.”

A Momentum spokesperson said today that “these are deeply worrying remarks from Keir Starmer.

“Instead of laying out a popular alternative based on public ownership and public investment, the Labour leadership is adopting the Tories’ failed economic approach.

“Starmer’s stance isn’t just out of touch with Labour members and voters — but with the public too.”

Sir Keir’s conservative positioning — “ruthless” on spending and “competitive” on tax — came as leading think tank The Resolution Foundation published a report claiming that “the toxic combination of slow growth and high inequality was straining the living standards of low and middle-income Britain well before the cost-of-living crisis struck.”

The report highlighted that the average British household is over £8,000 a year worse off than counterparts in France and Germany and recommends increased public service investment and improved transport networks and housing in regions outside London.

But none of that will be on offer from Sir Keir’s Labour, despite him speaking at the Resolution Foundation conference launching the report.

He said the Tory legacy “will constrain what a future Labour government can do” and declined to commit to reversing Conservative spending cuts.

Labour will focus on growth, which will be the party’s “obsession” in office he said, claiming that this focus on “wealth creation” was a break with traditional Labour attitudes.

This will be achieved by methods very close to those being pursued by the government, including changing planning laws and working with business.

He vowed there will be “huge constraints” on public spending and anyone expecting rapid increases would be “disappointed.”

Outlining his Treasury-first policy, the Labour leader said: “There will be many on my own side who will feel frustrated by the difficult choices we will have to make.

“This is non-negotiable: every penny must be accounted for. The public finances must be fixed so we can get Britain growing and make people feel better off.”

Speaking to the same conference, Chancellor Jeremy Hunt said nothing very different from Sir Keir.

“The only way in the long run that you can raise living standards is by raising productivity,” he said.

“I don’t think you want declining public investment, and I hope we get to a place where we don’t have that.”

Labour tax expert Richard Murphy attacked “the crass stupidity that is Labour’s fiscal rule — that will guarantee austerity and failing public services in the UK — is on display here.

“Starmer clearly thinks that the illusionary goal of balancing the budget is more important than the provision of public services.

“A Labour government led by Keir Starmer will be a disaster for this country.”

The Scottish National Party accused Sir Keir of promoting a “Thatcherite future” based on austerity. 

And Lydia Prieg, of the New Economics Foundation, said: “Starmer is kidding himself if he believes he can maintain current living standards, let alone improve them, without more government spending and investment.”