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Opposition Leader Tries to Seize the Moment as Britain’s Financial Woes Mount

LIVERPOOL, England — Accusing Britain’s new prime minister, Liz Truss, of losing control of Britain’s economy, the leader of the opposition Labour Party, Keir Starmer, on Tuesday staked his claim as the guardian of sound fiscal policy and centrist politics, in a speech aimed at capitalizing on the country’s gathering financial crisis.

Speaking at his party’s annual conference in Liverpool, Mr. Starmer derided the government over its recent announcement of tax cuts that largely favor the wealthy, which have caused a plunge in the value of the pound and a spike in borrowing costs.

“The government has lost control of the British economy — and for what? They’ve crashed the pound — and for what?” Mr. Starmer asked. “Not for working people: for tax cuts for the richest 1 percent in our society.”

In his 50-minute address, Mr. Starmer promised that Labour would tackle a crisis over the rising cost of living, create a new state-owned clean energy company and expand homeownership. But his speech aimed less at outlining new policies and more at presenting his party as a competent government-in-waiting whose moment had arrived.

“We are the party of the center-ground,” he said. Then, echoing the words of the former Labour prime minister, Tony Blair, he said that Labour was “once again, the political wing of the British people.”

A former chief prosecutor, Mr. Starmer is widely regarded as competent but lacking in charisma and has been criticized for failing to provide inspirational leadership.

But with his party now riding high in the opinion polls — the latest gives Labour a 17 point lead —the country’s new economic woes present an unexpected opportunity for the Labour Party.

In his speech, Mr. Starmer accused Britain’s new prime minister, Liz Truss, of losing control of the economy.Credit…Frank Augstein/Associated Press

For Mr. Starmer the timing of Labour’s annual conference could hardly have been better.

On Friday the chancellor of the Exchequer, Kwasi Kwarteng, announced the government would cut taxes, including a surprise reduction for the highest earners. The new policies alarmed the financial markets because of the increased borrowing they entail, sending the pound spiraling almost to the level of the dollar.

The backlash has presented Labour with an easy target, undermining the Conservative Party’s reputation for economic competence.

More on Politics in Britain

Prime Minister Liz Truss was chosen by a divided British Conservative Party to lead a country facing the gravest economic crisis in a generation.

  • A Domestic Push: After a period of mourning for the death of Queen Elizabeth II, the new government led by Ms. Truss began to work in earnest, announcing several initiatives to address Britain’s economic and social problems.
  • Energy Policies: The British government said it would freeze electric and gas bills for households and cut energy costs for companies in an effort to mitigate the effects of Russia’s restriction of gas supplies to Europe.
  • A Turn Toward Thatcherism: Ms. Truss bet on a heavy dose of tax cuts, deregulation and free-market economics to reignite growth. The negative reaction from financial markets underscored the extent of the gamble.

Some analysts liken the events to 1992 when a currency crisis dealt a crippling blow to the credibility of a Conservative government.

“Even if the pound recovers and this crisis goes away, I don’t think people are going to forget this,” said Steven Fielding, a professor of political history at the University of Nottingham. “It has seriously dented if not destroyed the Conservatives’ advantage over Labour on the economy, and for Labour that’s the golden ticket.”

Mr. Starmer on Tuesday derided the government plans as examples of the “trickle-down” economic theory once championed by Ronald Reagan. They show, he said, that while Labour is on the side of ordinary people, the government favors the rich.

The contrast with previous Labour party conferences — usually fractious affairs with internal divisions fully on display — was striking. Even last year Mr. Starmer was under pressure for his shift to the center, prompting opposition from left-wing party members who interrupted his conference speech with heckling.

This time, Mr. Starmer was greeted with a standing ovation, the first of many, even before he had uttered a word.

Recent polls have given Labour a 17-point lead over the Conservative party.Credit…Jon Super/Associated Press

It was a display of unity that suggests that the party scents the prospect of power for the first time in many years.

Since Labour crashed to a landslide defeat in 2019 under its previous leader, the veteran socialist Jeremy Corbyn, Mr. Starmer has concentrated on persuading voters that his party has been transformed. That has meant tackling anti-Semitism within Labour’s ranks and stressingpatriotism and commitment to centrist values.

On Sunday the conference opened for the first time with a rendition of the national anthem — something unthinkable under Mr. Corbyn.There was one setback for Labour on Tuesday when Rupa Huq, one of its lawmakers was suspended from the parliamentary party pending an investigation after she described Mr. Kwarteng as “superficially” Black.

Those hearing him in a radio interview “wouldn’t know he’s Black,” Ms. Huq said at an event on the fringe of the conference, noting that Mr. Kwarteng attended Eton College, an elite school.

But in a conversation session with a recent recruit to Labour, the former soccer star for England, Gary Neville, a relaxed Mr. Starmer on Monday pointed to the change.

“There is a mood at every conference, that you can feel, and the mood at this conference is one of confidence that we have done hard work in the last two years to change our party,” Mr. Starmer said, adding that there was “a sense of coming together, the sense that we are a government-in-waiting.”

One price for Labour of being taken more seriously is that it is now being asked how, if it were in government, would it handle the challenging economic circumstances without either raising taxes or cutting public services like health or education. Like the Tories, Labour has outlined a growth strategy and has promised a “wealth fund” with an initial £8 billion to invest in green projects.

Mr. Starmer wants to keep two of the reductions outlined by Mr. Kwarteng last week, including a cut of the basic rate of income tax from 20 percent to 19 percent. Labour says it would not reduce corporate taxation or the taxes of the highest earners, as Mr. Kwarteng intends to do. It also says it would raise money by extending a windfall tax on energy companies and by changing the tax rules for so-called “non doms” who live in Britain but are not legally domiciled in the country.

Ms. Truss and Kwasi Kwarteng, the chancellor of the Exchequer, visiting the Berkeley Modular factory in the town of Northfleet, England, last week. Credit…Dylan Martinez/Reuters

Nonetheless, if the public finances deteriorate, it would be harder for Mr. Starmer to present a credible alternative economic strategy before the next election, which must take place by January 2025.

And since becoming leader, Mr. Starmer has struggled to articulate a clear and compelling alternative vision.

On Tuesday Mr. Starmer, who opposed Brexit in the 2016 referendum, promised to make the policy work, appealing to those who wanted Britain to leave the European Union to support him. He argued that they had not voted for the free market economics and deregulation being advocated by the government.

Supporters of Ms. Truss, who succeeded Boris Johnson this month, believe that, by laying out a clear sense of direction based on her strong free market beliefs, she will win the respect of voters and can defeat Mr. Starmer in the next election if the economy starts to recover.

However, given the economic turmoil, any hope Ms. Truss had of a political honeymoon has evaporated, with the opinion polls suggesting that Mr. Starmer’s more stolid and pragmatic brand of politics could be enough to propel him to power.

“When Boris Johnson stood down there was a moment you thought whoever comes next surely is going to be more competent more focused and will be a harder target for Labour,” Professor Fielding said, “but Keir Starmer must be pinching himself in terms of how the government has gone about what they have done.”

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