Keir Starmer Says Government Will "Absolutely" Stick To Its Fiscal Rules As Borrowing Costs Rise
Prime Minister Keir Starmer met students on a visit to Google's new AI Campus in Somers Town in November last year (Alamy)
3 min read
Keir Starmer has confirmed that the government will "absolutely" stick to its fiscal rules, even if that means making "ruthless" decisions on the economy.
Delivering a speech in east London on Monday, the prime minister said: "We do have in place fiscal rules, which we will absolutely stick to because they're necessary to provide the stability that we want."
Starmer received several questions about how the government would respond to the pound falling and borrowing costs rising sharply in recent days. Borrowing costs have risen to their highest level for 17 years.
The trend, which last week led to opposition MPs calling on chancellor Rachel Reeves to cancel her weekend trip to China, has raised questions about whether the government will be forced to raise more taxes or make further spending cuts to calm the markets.
The prime minister did not address questions about whether he would make further cuts to public spending, but said the government "will be ruthless, as we have been ruthless in the decisions that we've taken so far".
Late last week, leading economist Paul Johnson told PoliticsHome that these movements in the markets will put "pressure" on the chancellor to deliver a major fiscal event in the spring, despite Reeves having committed to just one a year in the autumn.
Questioned on the competence of his chancellor and whether she will remain in post, Starmer said that she had his "full confidence" and the "full confidence of the entire party".
Starmer was delivering a speech about harnessing the power of AI in the civil service and public services, declaring that "Britain will be one of the great superpowers".
While he admitted there would be "teething problems", he said there had to be an emphasis on the potential benefits of artificial intelligence technology, including tailoring medicine to patients' DNA, speeding up administrative processes, and allowing human public sector workers such as doctors and nurses to spend more time on the "personal touch that people really value".
"That's the irony of AI: it will make public services more human," he said.
The prime minister said he disagreed with the approach of the previous Conservative government which focused primarily on AI safety.
“We shouldn’t just focus on safety and leave the rest to the market," he said.
"Government has a responsibility to make it work for working people. And the opportunities of this technology, they're not just going to somehow fall into our lap. This is the global race of our lives."
He said the government will "remove the blockages" holding businesses back from using AI to its full potential and speed up planning permissions for companies that need data centres, deliver grid connections "at speed" and develop a national data library.
The PM suggested that AI could result in productivity doubling "in a very short period of time".
"That's the potential for the difference that it will make," he said.
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