Starmer says he’s happy to be branded a ‘fiscal conservative’ as he refuses to commit to greater public spending

Sir Keir Starmer has said he is happy to be branded a “fiscal conservative” as he repeatedly refused to commit to greater spending on the NHS and other public services.

The Labour leader was called “delusional” by the Labour left – but Sir Keir insisted that he did not mind “ruffling feathers” and argued that his party could not win power by offering reckless spending pledges.

Sir Keir is also facing a row over his party’s benefits policy, after he revealed that a Labour government would keep the controversial two-child cap on benefits devised by austerity architect George Osborne.

His shadow work and pensions secretary Jonathan Ashworth had signalled an end to the two-child benefit cap only last month, calling the policy “heinous” and arguing that it was “absolutely keeping children in poverty”.

But asked on the BBC’s Sunday with Laura Kuenssberg if he would scrap the cap, which means support is only provided for the first two children in a family, Sir Keir said: “We’re not changing that policy.”

The Labour leader repeatedly refused to say whether his party would spend more on public services in government, stating only that “a Labour government always will invest in our public services. The way to invest in our public services is to grow our economy.”

Urging “reform” of the NHS rather than committing to providing it with more money, Sir Keir said: “If all we do is simply patch up and keep going, then we won’t fix the fundamentals, and that’s why reform is so important.”

Asked if he was happy to be known as a “fiscal conservative”, Sir Keir said: “I don’t mind what label people put on me.”

Sir Keir is thought to want a Labour government to follow the Tories’ tax and public spending levels until growth returns to Britain’s juddering economy.

The Labour leader has acknowledged frustration with his plan for fiscal restraint. “Taking seriously the foundations of economic responsibility may not set people’s pulses racing – but the new country we can build on top of them will do,” Sir Keir wrote in The Observer.

Andrew Fisher, who was policy chief for Jeremy Corbyn when he was leader of the party, said it was “delusional” to refuse to commit to extra spending on the NHS and public services. “Reforms are necessary, but they’re not an alternative to spending more,” he tweeted.

Mick Lynch, the firebrand leader of the Rail, Maritime and Transport (RMT) union, said people cannot “spot the difference” between Labour and the Tories. “He’s got to show that he’s on the side of working people,” he told Sky News’s Sophy Ridge on Sunday.

“Keir Starmer and his team have got to show some clear water, some red water, between themselves and the Daily Mail, the Telegraph, and themselves and the Conservatives.”

The left-wing campaign group Momentum said Sir Keir was “siding with the Daily Mail” when it comes to the “cruel” two-child benefit cap, and called for “real investment” in public services and infrastructure.

But Sir Keir took on his critics on economic policy. “Frankly, the left has to start caring a lot more about growth, about creating wealth, attracting inward investment and kickstarting a spirit of enterprise,” he said – calling it “the only show in town”.

Grilled on deselections, suspensions, and the blocking of left-wing candidates – including the North of Tyne mayor, Jamie Driscoll – Sir Keir said he “rejects” the idea that he is ditching people and policies.

Asked by Laura Kuenssberg if he is happy to “ruffle feathers” in order to win power, Sir Keir said: “Of course” – before suggesting that he would be happy with even a one-seat Labour majority in 2024.

“The biggest danger is complacency,” he said on the chances of a Labour government. “I remind myself every day ... that to get from where we landed in 2019 to a one-seat majority at the next election will be a bigger swing than Tony Blair got in 1997.”

Deputy leader Angela Rayner said a Labour government will not nationalise industries if it will cost “a load of money” to do so. She told The Observer: “With the rail companies, we have said that once their contracts are up we’d bring them back into public ownership, and that’s a way of doing it. It’s pragmatism, not ideology. It’s about asking, ‘Will it improve people’s lives?’”

Asked about Sir Keir’s treatment of figures on the left of the party, she insisted that Labour needs to remain a broad church. “It has to be, because it’s not just about the party, it’s about voters,” she said.

Meanwhile, Sir Keir wouldn’t say if he would keep negotiating on current public-sector pay disputes, describing it as “the government’s mess” in his BBC interview. He also refused to put an “arbitrary” target on housebuilding – saying only that he wants to see “hundreds of thousands more houses” built.

Sir Keir did not rule out changing the Bank of England’s 2 per cent inflation target under a Labour government. Asked if he would look at changing the target, he said: “That’s something, I think, for us to address closer to the election.”