Chancellor Rachel Reeves will on Monday urge business leaders to focus on the threat posed by Reform UK, as part of a fierce attack by the Labour leadership on Nigel Farage’s party and its “racist” immigration policy.
Reeves will use her speech to the Labour conference in Liverpool to claim that Farage would go on a borrowing spree, disrupt the labour market and rip up an EU-UK trade deal. On Sunday, Starmer urged his party to prepare for the “fight of our lives” with Reform UK.
Reeves’ allies are frustrated that business leaders have failed to speak out against Farage and his economic policies, with one saying: “They have to wake up — they can’t be passive.”
Her remarks are part of an onslaught on Reform UK, which is leading in opinion polls but currently has only five MPs. The move is partly intended to unite fractious Labour MPs and activists against a common enemy.
“Who is standing up for Britain’s stability,” Reeves will ask in her speech in Liverpool. “A Labour government that is resolute in cutting interest rates and borrowing or a Reform party that cheered on Liz Truss’ mini-budget?”
“Who is standing up for Britain’s businesses? A Labour government that is forging a closer relationship with our nearest trading partners or a Reform party that talks Britain down and is hungry to cut us off from the world?”
Reeves will argue that Farage has made unfunded spending commitments, would disrupt trade and that his plan to deport immigrants who have a legal right to live in the UK would cause workplace chaos.
The Reeves ally said that businesses needed to speak out against Farage’s rightwing populist party.
“They welcome or criticise government policies, but they don’t either welcome or criticise what Reform are saying,” the person said.
Reeves’ speech comes against a tough economic backdrop as she looks to fill a fiscal hole of up to £30bn in her November Budget, with speculation in Labour circles that she may have to rip up the party’s manifesto tax pledges.
Challenged by the BBC on whether he would honour Labour manifesto pledges not to increase VAT, Starmer repeatedly used the same formula in his reply: “The manifesto stands.” The pledge also covers income tax and national insurance contributions.
The Conservatives seized on the phrase as evidence that, while the policy might stand at the moment, Starmer was leaving open the possibility that Reeves would renege on the tax pledge in her Budget on November 26.
Meanwhile Starmer claimed on Sunday that Farage’s plan to abolish indefinite leave to remain (ILR) — the main route to permanent settlement in the UK — and force people to reapply for visas every five years was “racist”.
“I do think it’s a racist policy,” he told the BBC. “I think it’s immoral and it should be called out for what it is.”
Starmer aides admitted that the use of the “R-word” was not pre-planned and the prime minister instantly clarified that he meant that Farage’s immigration policy was racist, not people who supported Reform.
But the move has left him vulnerable to claims he is attacking members of the public who are concerned about high levels of migration and community cohesion.
Zia Yusuf, Reform UK’s head of policy, said on Sunday: “Labour’s message to the country is clear: pay hundreds of billions for foreign nationals to live off the state forever, or Labour will call you racist.”
On Monday the new home secretary Shabana Mahmood will tacitly accept that Farage has tapped into public concern on migration by promising to tighten up rules on how an immigrant can gain UK citizenship.
Mahmood will say that migrants will have to earn money in Britain, claim no benefits, have a clean criminal record and volunteer in the community to obtain permanent residency in Britain.
She will add that many British people feel things are “spinning out of control” around the issue of immigration. But she will argue that “patriotism, a force for good” is turning into something smaller, “something more like ethno-nationalism”.
Her proposed reforms build on a pledge the Labour government made earlier this year to extend the period migrants need to be in Britain before they can apply for ILR from five to 10 years.
On the conference fringe, Great Manchester Mayor Andy Burnham continued his attacks on Starmer’s style of leadership and supposed attempt to drag Labour to the right, suppressing internal dissent.
“How can you have an open debate about all of those things if there’s too much of a climate of fear within our party and the way the party is being run?” Burnham, who launched a thinly veiled bid for the Labour leadership this week, told a packed meeting.
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