Unions say Keir Starmer ought to borrow to fund spending splurge
Labour’s union backers have suggested Britain could afford to borrow up to another £600billion for a massive spending splurge after the election.
Unite chief Sharon Graham pointed to US, where debt is around 124 per cent per cent of GDP, as she argued that the UK has ‘wriggle room’ to invest more.
Official figures last week showed the UK’s debt pile stands at £2.74trillion – 99.8 per cent of GDP, the highest proportion since the 1960s. Servicing the debt cost £8billion in May alone.
Keir Starmer and shadow chancellor Rachel Reeves have been making great play of their determination to keep the books under control, despite criticism from think-tanks that the spending plans from all main parties are unrealistic.
However, Ms Graham told Sky News‘ Sunday Morning with Trevor Phillips that Labour must take off the ‘straitjacket’ and spend more to boost growth.
Unite chief Sharon Graham pointed to US, where debt is 130 per cent of GDP, as she argued that the UK has ‘wriggle room’ to invest more
Official figures last week showed the UK’s debt pile stands at £2.74trillion – 99.8 per cent of GDP, the highest proportion since the 1960s
‘Well, look, I don’t agree with Rachel Reeves in terms of what has been said about the plans on growth, because whilst we all want growth, I want growth,’ she said.
‘I think everybody would want growth. We are going to have to borrow to invest.
‘Look, if you look at other countries in France, their debt to GDP is 112 per cent. In America, where the economy’s growing, it’s 130 per cent debt to GDP.
‘Ours is around about 99 per cent. We have a wiggle room. Give Britain a break. Give us a break.
‘I mean, these people that are out there in communities and the workers, they are literally hurting beyond anything that you could comprehend.
‘And what we need is we need to straitjacket off a little bit, get some wiggle room there.’
Ms Graham – whose Unite union has long been one of Labour’s biggest funders – said: ‘Borrowing to invest is not the same as other borrowing. It’s borrowing to invest.’
Unite has been vocal in urging Sir Keir to take a more radical approach in government. Ms Reeves has ruled out borrowing to fund day-to-day spending, saying her priority will be reforms to boost economic growth.
Servicing the UK’s debt pile cost £8billion in May alone
Latest figures show US debt is running at around 124 per cent of GDP. Increasing the UK’s debt pile to that level would be roughly equivalent to going another £800billion in the red, at current GDP volumes.
America finds it easier to maintain high debt levels, partly because the dollar is the world’s reserve currency.
The respected IFS think-tank has been among those warning that Labour’s proposals for tax rises of £8.5billion would still leave the country facing deep cuts in public services.
They have also been critical of the Conservative pledge to slash around £17billion off taxes.
