What is Keir Starmer's plan to reinvigorate the economy with 'British recovery bond'?

Sir Keir Starmer's speech received a mixed reaction. Credit: PA

Labour leader Sir Keir Starmer is pushing for a "British recovery bond" to reinvigorate the economy following the downturn caused by the coronavirus pandemic.

The Leader of the Opposition used a major speech to call for a “new chapter” in the country’s history after the pandemic laid bare the nation’s “fragilities”, but it appears the speech did not live up to expectations.

Labour had been hoping the speech would provide an opportunity for the party to gain ground on the Conservatives after a number of polls put the government several points ahead.

Social media was awash with complaints about the speech, with a number of users commenting on what they perceived as the Labour leader's "lack of passion", despite him saying he has "determination that pulses through my veins".

His idea of a "British recovery bond" however did appear to be widely welcomed online.

What's the recovery bond plan?

Sir Keir said the idea of a bond would provide "security" for those who invest and it "also helps the country secure that economy".

In response to the Bank of England suggesting the “vast majority of savings built up during the pandemic won’t be spent”, he said: “If I were prime minister, I would introduce a new British recovery bond.

“This could raise billions to invest in local communities, jobs and businesses. It could help build the infrastructure of the future – investing in science, skills, technology and British manufacturing.

“It would also provide security for savers and give millions of people a proper stake in Britain’s future.”

It would be similar to the NS&I premium bonds, Labour said, though the money would go directly to the coronavirus recovery – potentially raising “billions” of pounds.

Asked by reporters whether his British recovery bond policy would only make the wealthiest richer, said he thought the policy addressed the "short-termism" of the UK's economy in the past.

The Labour leader said: "No, on the contrary, one of the problems of the past has been the short-termism of our economy, coupled with austerity.

"I've given the bond as an example of a longer-term, secure way of investing.

"Many people have, I think, saved for the first time during this pandemic and, as the Bank of England says, they are unlikely to spend it in a hurry and this gives them the security of a bond going forward, and also helps the country secure that economy."

What else did he say?

Sir Keir described next month’s Budget as presenting a “fork in the road”, and pledged that a Labour government would retain the £20-a-week uplift in Universal Credit, as well as ending the “insult” of a pay freeze for key workers

He also said his party would provide local authorities with the necessary funding to prevent huge council tax rises, and he vowed to extend business rate relief and the VAT cut for hospitality and leisure.

On jobs, he pledged to extend and update the furlough scheme so it can better help people back into work, and said Labour would “fix” the Government’s Kickstart scheme.

And the Labour leader announced plans to offer 100,000 start-up loans, if he came to power.

Political Correspondent Daniel Hewitt analyses Starmer's speech

He said: “If we’re honest, for too long Labour has failed to realise that the only way to deliver social justice and equality is through a strong partnership with business – under my leadership, that mind-set will change.

“A new partnership with business – one where we have high expectations of business and where business can have high expectations of Labour – is pivotal to my leadership and to my vision of the future.

“That’s why, if I was prime minister, I’d back a new generation of British entrepreneurs by providing start-up loans for 100,000 new businesses across every region of the UK.”

The Labour leader attacked the government after it ordered its MPs to abstain on a Commons vote on Universal Credit and to reject a motion to extend free school meals during the holidays.

He said: "If you can’t decide whether to plunge hundreds of thousands of children into poverty by cutting universal credit, you have no chance of mending our broken system.

"If you vote against children getting free school meals, you’re not going to find the solution to millions of children growing up in poverty."

He also heavily criticised the government’s response to the Covid-19 pandemic, saying ministers have been “slow at every stage”, have “ignored advice” and “haven’t learnt from their mistakes”.

“Yet a Government out of its depth is not even half the story. The terrible damage caused by the virus to health and to prosperity has been made all the worse because the foundations of our society have been weakened over a decade,” he said.

Sir Keir said the wartime generation were “let down in their time of need”, and asked: “How can the Prime Minister now look those families in the eye and say ‘We did everything we could’?”

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