Since Sir Keir Starmer became leader of the Labour Party, his time in office has been marked by a series of high-profile U-turns on key policies, a new report has found. The Resolution Foundation think tank estimates that these policy reversals have cost the British economy a staggering £8.2 billion in lost growth.
The report highlights that despite Labour’s pledge to restore stability, the numerous U-turns under Starmer’s leadership have actually increased policy uncertainty in the current Parliament more than in any of the previous seven. The think tank’s research found that the consequences of Labour’s policy reversals on issues such as personal independence payments, universal credit, the winter fuel allowance, and the two-child benefit cap have resulted in this substantial hit to the UK’s economic performance.
Notably, the £8.2 billion figure does not even include the government’s most recent U-turns on business rates for pubs and inheritance tax rules for farmers, which are expected to cost an additional £300 million and £130 million, respectively. Furthermore, on Monday, the government also withdrew an amendment to its Hillborough Law, which aimed to force public officials and contractors to tell the truth after disasters, amid concerns that intelligence agencies could use it to avoid being bound by the proposed duty of candour.
“Twenty years ago, the UK economy was close to catching up with Germany. But decades of stagnation mean that we’ve now been caught by Italy and are miles behind our former peers. It’s time the UK started to catch up,” said Greg Thwaites, research director at the Resolution Foundation.
Thwaites added: “There’s lots to welcome in the government’s economic growth strategy. But it has spent much of the past 18 months undermining that strategy with policy U-turns, kite-flying tax ideas and timidity in areas like trade where it needs to be bold.” He urged the government to ramp up its plans, unblock housebuilding in major cities, focus on job support for young and older workers, and consider reversing some of the damage from Brexit.
The findings of this report come as a significant blow to the Labour Party, which has sought to position itself as a stable and responsible alternative to the Conservative government. The scale of the economic impact caused by its U-turns will likely raise questions about the party’s ability to manage the country’s finances effectively if it were to come into power.