SIR KEIR Starmer's attempt to unveil a “distinctively British” plan to “reboot” the economy was overshadowed by a row over nationalisation. 

In a speech to activists in Liverpool, the Labour leader sought to distance himself even further from Jeremy Corbyn and the 2019 manifesto, saying the "defining task” of his government would need to “ask searching questions of my party and our instincts.”

“We cannot be like the Tories - clinging to old ideas, trapped in our history. To give Britain the fresh start it needs, we need a new approach,” he said. 

However, this new approach seemingly includes the party dropping its commitment to bringing rail, energy and water firms back into public ownership. 

Sir Keir said the party was not against nationalisation but would take "a pragmatic approach rather than an ideological one."

The change in policy will put the leadership in conflict with the trade unions and the left of the party. 

Meanwhile, the Labour leader also announced that Gordon Brown had been asked to look at “new forms of economic devolution” to “make sure the decisions about things that drive regional growth, like skills, infrastructure, attracting investment, are all made by people with skin in the game.”

It is unclear if this will be part of the former Prime Minister’s report on constitutional reform due to be published at some point this year

In his speech, Sir Keir said his Labour party would “move on from the old ideas.”

He said: “Because the old approach focused on growing the pie in any way possible. Then redistributing. But this is not strong, secure and fair growth. 

“It leaves too many people in insecure jobs where their hard work is not fairly rewarded. Too many communities locked out from the benefits of growth.”

Sir Keir urged supporters to look to “winning centre-left parties around the world” including the Democrats in the US and their “Modern Supply Side economics.”

“It rests in part on a universal truth about social democracy, a strong economy needs strong public services, and strong public services need reform and investment.

“But it also depends on something more subtle, because the investments we make now should have a laser-like focus on boosting long-term productivity across the country, not just quick wins in the South East. 

“Which means we must learn to focus on the supply side, on growing the collective contribution. Everywhere.” 

Sir Keir told the audience that his plans to “reboot growth” would be guided by five principles.

“We will be financially responsible. We will be distinctively British. We will work in partnership with business. We will re-energise communities and spread economic power. We will refocus our investment on boosting productivity.”

The leader of the opposition said the party would not announce a single penny of day-to-day spending without saying how they would pay for it, and would only borrow to invest “to meet the challenges of the future”. 

Labour, he added, would set a target to reduce debt as an overall share of our economy. 

On being “distinctively British,” Sir Keir said that meant supporting “resilient supply chains in sectors which are vital for British security and growth”. 

His government would, he added, have a strategy to buy, make and sell more in Britain, including steel, and a reform of public procurement rules to “build up Britain’s sovereign capabilities in key industries.” 

“It isn’t protectionist to say this, or somehow old fashioned,” Sir Keir insisted.

“Britain will always be an outward facing, confident, trading nation. But all around the world, businesses are looking again at the resilience of their supply chains. Reacting to the crises we have faced and will face in the future. Countries must do the same.”

He also said his party would also take on the Tory government's policy of “levelling up” but “in a way that isn’t pure boosterism”. 

Sir Keir told the audience: “We must be honest about British strengths.”

While there were manufacturing successes in the UK, there were other “superpower strengths - in universities, in creative industries, in exporting services - that other countries can't compete with.” 

Sir Keir also criticised the candidates in the Tory leadership contest, suggesting tonight’s televised debate between Rishi Sunak and Liz Truss would be “Thatcherite cosplay.”

He later said the two were “part of the problem” and their answers “too small”.

Answering questions after his speech, Sir Keir said: “What we’re seeing from the leadership contest is two individuals who are part of the problem.

“We’ve had 12 years now of stagnation, they have voted for every one of those 15 tax rises and now they’re trying to distance themselves as quickly as possible from it.

“Their answers, if you like, are too small for our country, for the challenge that we face.”

He was asked about nationalisation following comments made by Rachel Reeves, the shadow chancellor.

In an interview with the BBC, she had suggested policies calling for firms to be taken back into government control were not compatible with new "fiscal rules" she would introduce to restrain public spending.

Labour promised to bring the sectors into public ownership - as Scottish Water and ScotRail are in Scotland - in both their 2017 and 2019 manifestos.

Asked if she was still committed to the policies, Ms Reeves said they had been replaced by ideas like reforms to business rates and a "buy British" campaign.

"I've set out fiscal rules that say all day-to-day spending will be funded by day-to-day tax revenues," she told BBC Radio 4's Today programme.

"Within our fiscal rules, to be spending billions of pounds on nationalising things, that just doesn't stack up against our fiscal rules."

Asked to confirm whether she had just dropped the commitments, she said: "They were a commitment in a manifesto that secured our worst results since 1935. We have scrapped the 2019 manifesto.

"That is not the starting point. We're setting out distinct policies under Keir Starmer, the plans today around industrial strategy, my commitments around a climate investment pledge, our plans to buy, make, and sell more in Britain, reforms to the business rate system.

"Those are the policies that will be going into the next election under Keir Starmer, not the policies of 2019."

Asked about the remarks, Sir Keir replied: “I agree with what Rachel Reeves said this morning. Having come through the pandemic, it's very important that we have very, very clear priorities. And that's why we've set our fiscal rules already, as an opposition.

“Rachel did that conference last year: that's way ahead of the general election, setting out our priorities. And my priority, as I hope is obvious from this morning is growth.

"The mission of the next Labour Government will be growth and that partnership with business is where I see that growth coming from. So my approach here is, is pragmatic, not ideological.”

Asked specifically about taking rail back into public ownership he said: “Whether it comes to rail or anything else, I want to be pragmatic about this rather than ideological.

"I think what some of our mayors and Metro mayors are doing with public transport is the right way forward, absolutely focused on keeping the price down and making sure there's control over where things go, particularly buses recently.”

Labour MSP Mercedes Villalba - who is on the left of the party - tweeted: "We cannot afford to leave essentials like transport, communications, energy, and water to the volatility of the free market. We need the stability of services and security of supply that only nationalisation can provide."

Green MSP Ross Greer said Scottish Labour leader Anas Sarwar would need to say if his party "now proposed privatising Scottish Water and ScotRail."

He said: "Nationalising these services was a key part of Starmer’s leadership campaign, but like almost every other promise he made back then, he has abandoned it in what looks like a hopeless attempt to curry favour with the corporations and super-rich individuals currently laughing their way to the bank while ordinary people’s bills soar.

“In Scotland, water and rail are already publicly owned, and there continues to be widespread support for them to remain so.

"It is essential that Anas Sarwar urgently clarifies whether his branch office will follow the UK party’s instruction and support the privatisation of Scottish Water and ScotRail.”

Responding to Sir Keir's speech, the SNP's Westminster Deputy leader Kirsten Oswald said Labour were attempting to "adopt Tory policies wholesale."

She added: "On Brexit, freedom of movement, privatisation – you can no longer put a piece of paper between the two main Westminster parties.

"Keir Starmer outlined the weaknesses of the UK compared to near neighbours and the fact is that these are longstanding issues that have festered under Tory and Labour Westminster governments.

"Meanwhile, Scottish Government papers have shone a light on how the UK is trailing a number of smaller, independent European nations when it comes to economic and social league tables.

"It's beyond any doubt that only with the full powers of independence will we be able to build a fairer, more prosperous society and secure our place in the EU."

Following Ms Reeves' comments, the TUC released a statement calling "for public ownership of energy companies."

They added: "The energy cap is expected to increase to £3,200, up over 150% in just a year."

"Public ownership would reduce bills, peed up energy efficiency improvements to homes and cut carbon emissions faster.”

The union body's statement continued: “Taking the Big Five energy retail firms into public ownership would cost just £2.85 billion. Since June 2021, the UK government has spent £2.7 billion bailing out 28 energy companies that collapsed."

"It’s time to lift the burden of failed privatisation off families.”