‘There is no magic money tree’, Starmer tells cash-strapped councils

Labour leader invoked Theresa May’s famous phrase, turning her words against the Tories as he launched his local election campaign

Sir Keir Starmer has warned cash-strapped councils there is no “magic money tree” and said they will not get extra levelling-up funds if he wins the election.
The Labour leader insisted he will not be able to “turn the taps on” and blamed Jeremy Hunt, the Chancellor, who he said had “salted the ground” with pre-election tax cuts.
Launching his party’s local election campaign, Sir Keir also criticised a five per cent rise in council rates across much of England next month as “a new Tory stealth tax”.
The remarks come when many local authorities are facing a financial crisis, with six having declared bankruptcy in the last three years.
Following a speech in Dudley, Sir Keir was repeatedly pressed on whether his government would step in with extra cash to shore up struggling councils.
The Labour leader said: “Can I stand here and pretend to you that there’s a magic money tree that we can waggle the day after the election? No.”
He said his hands were tied because the Tories had “broken the economy” and were “using any potential money for public services for gimmicks”.
Sir Keir acknowledged that many councils are in an “appalling situation” but warned no extra cash would be available until he can return Britain to growth.
“Councils of all political stripes are struggling with the lack of funding they’ve had over a prolonged period and we need to turn that around,” he said.
“I can’t pretend that we can turn the taps on, pretend the damage hasn’t been done to the economy, it has. The way out of that is to grow our economy.”
He added: “I want to invest more in our public services, our public places and our local authorities. I can’t pretend we can do that on day one.”
Labour-run Birmingham, the second largest local authority in Europe, was forced to effectively declare bankruptcy last September after running out of reserves.
It now plans to hike council tax by 21 per cent over the next two years while cutting services, including moving to fortnightly bin collections.
Five other councils – Northamptonshire, Slough, Croydon, Thurrock, Woking, and Nottingham – have also gone bust since 2021.
The Local Government Association has warned that as many as one in five local authorities in England are likely to declare bankruptcy this year.
Sir Keir’s “magic money tree” jibe was the latest example of how he is looking to outflank the Tories on the economy by turning their own words against them.
The attack line was most famously used in 2017 by Theresa May, the former prime minister, to discredit Jeremy Corbyn’s lavish spending plans.
In his speech the Labour leader raised eyebrows by praising Boris Johnson for his levelling-up vision, which he said had been betrayed by Rishi Sunak.
He has also sparked anger amongst Left-wing MPs within his own party by expressing admiration for Margaret Thatcher’s reforming zeal.
Addressing grassroots activists in Dudley, West Midlands, Sir Keir went on the attack against Mr Sunak and Mr Hunt over the stealth taxes hitting people’s pockets.
“They tell you they’re cutting your taxes, while at the same time, they’re rifling through your back pocket. Give with one hand, take even more with the other,” he said.
The Labour leader accused Mr Sunak of “bottling” calling a general election and said the Prime Minister was just “treading water” in Downing Street.
He said the Tories had “beaten the hope out of people over the last 14 years” and become a party that has “forgotten to serve anything other than itself”.
Richard Holden, the Tory chairman, branded Sir Keir’s attack “cynical”, given that Labour-run Birmingham is hiking taxes on the city’s residents.
He said: “This is just the same old Labour Party, you can’t trust a word they say because they don’t have a plan.
“The choice is clear. While Labour have no plan to keep council tax low, Conservative councils across the country are delivering value for money for local people.”