LABOUR’S plans for the UK “lack any ambition to reverse austerity”, a Nobel-prize winning economist has warned.

Writing in The Guardian, Paul Krugman said that a UK government led by Keir Starmer looked set to allow “the shadow of austerity policies … to darken Britain’s prospects for many years to come”.

Krugman, a distinguished professor of economics at the Graduate Center of the City University of New York, won the Nobel Prize in the field in 2008.

Paul Krugman won the Nobel Prize for economics in 2008

He wrote: “The roots of Britain’s poor economic performance are older and deeper than Brexit. Though many bad decisions undoubtedly contributed, one central cause was the way David Cameron and George Osborne gratuitously embraced fiscal austerity when they came to power after the global financial crisis.

"At the time, this looked like an obvious macroeconomic error; more than a decade later, it has become a social and political catastrophe."

Krugman went on: "First, the era of Conservative austerity coincided with an era of low interest rates and substantial excess capacity, exactly the conditions under which Britain should have been investing in its future. The current environment is much less favourable.

“Second, Labour’s stated plans lack any ambition to reverse austerity.

“In the US, the Biden administration came in with bold plans and managed to accomplish a significant fraction of them despite having only a razor-thin congressional majority. I am not hearing anything comparable from Labour, even though Keir Starmer seems on course to have political capital beyond the wildest dreams of US progressives.

“I hope to be proved wrong. But right now it looks as though the shadow of austerity policies adopted in error 14 years ago will continue to darken Britain’s prospects for many years to come.”

Labour have repeatedly insisted they will not bring in a new era of austerity, despite experts saying that their fiscal plans mean that services face £18 billion of cuts.

David Linden speaking in the House of Commons (Image: PA)

David Linden, SNP candidate for Glasgow East, said: “These comments from leading economist Paul Krugman are damning – and exactly what the SNP has been saying since the start of the election campaign. We simply cannot trust the Labour Party.

“With a vote for the Labour Party we get more austerity painted red with Labour MPs who will fall in line behind Starmer, but by sending SNP MPs to Westminster we can fight them every step of the way.

“Only a vote for the SNP on July 4 will protect the interests of households in Scotland with SNP MPs to Westminster who will always take a stand against austerity – no matter which colour it wears.”