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12 July 2023

What’s the point of Labour when there’s less money to spend?

Keir Starmer needs a strategy for an era of economic scarcity.

By Lewis Goodall

Education was on both main parties’ minds last week. This was a novelty, and that should surprise us. For virtually the entire period from New Labour through to the Tory-Lib Dem coalition government, education reform, school standards and social mobility were a central feature of our politics. Yet for nearly a decade, since Michael Gove ceased to be education secretary and certainly since Brexit, education and social mobility have been at best peripheral.

On the Conservative side, the running was not being made by Rishi Sunak, who save for an obsession with maths and giving huge sums of money to his alma mater, has little to say about the schooling of millions. It was left to the New Conservatives, the latest faction on the right of the party, to outline their proposals, which amounted to hackneyed arguments about fewer pupils needing to go to university (inevitably, when politicians say that, they mean someone else’s). 

Keir Starmer’s offering was more substantial, weaving together themes of education, social mobility and class. The Labour leader is a relative outlier in British politics in being able to talk authoritatively about the latter. He never tires to remind us that as a child he lived in a pebble-dashed semi. It says much that this should be considered unusual. Sadly, given how many MPs these days are buy-to-let landlords, the average parliamentarian is more likely to own a string of pebble-dashed semis than to have grown up in one.

There is more to this discourse about education than emphasising lived experience, though. In its own way, a focus on class and social mobility is a subtle answer to the politics of the so-called culture wars. Labour struggles with the latter, but all its factions are more comfortable with class and social mobility. And it was refreshing to hear a senior politician not only talk about these ideas, but make them central. “This is what my political project, my vision, is about,” Starmer said.

[See also: What could go wrong for Keir Starmer?]

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But to listen to Starmer talk about these issues is to glimpse both the promise and limitations of that project and any premiership it may yield. His instincts are right. But his prescription is shaky. The idea of oracy, of helping working-class kids to communicate and get on, was noble. It is also revealing that it won’t cost much money. The truth is, this and the other ideas about the curriculum and teacher retention won’t nearly be enough to reverse the class carnage caused by a decade and a half of meagre budget settlements. Nor will it fill a gap between private- and state-school funding per pupil that has widened into a gulf.

When asked about the money, Starmer compared the Tories’ record and that of the last Labour government: “It’s now possible to see these 13 years, and the last 13 years of a Labour government. Bear in mind and hold in your mind just what the last Labour government did on education.” But you can’t tackle a problem by repute and ignore an obvious fact: New Labour spent money. A lot of money. During its time in office education spending doubled.

Rachel Reeves, the shadow chancellor, hammered home this wider parsimony at the weekend when she said that an incoming Labour government would match Tory tax and spending plans. This was written up as yet another example of team Starmer mirroring New Labour, which promised the same in 1997. In its political effect, that may be true. But they’re not doing it for the same reasons. Starmer and his team have no hope of being able to mirror the macroeconomic circumstances of that period. New Labour could stick to Tory spending pledges safe in the knowledge that the economy was growing. Starmer’s Labour might have to do so precisely because it is not.

And so assuming that Starmer won’t be able to emulate New Labour’s fiscal largesse, what is his alternative? This, I fear, is where the limitations emerge. In a sense, the essay question for the Labour Party during its long period in the wilderness since 2010 has been the same: how do you do social democracy in straitened times? Each faction has had a go at answering that question and failed. Ed Miliband half accepted the question. Corbyn rejected it entirely. Both had a luxury Starmer does not – low interest rates and low inflation, which meant that, if they’d wished to, they could blur the lines and take a risk. A Starmer government won’t have that option. Remarkably, perhaps, after 13 years, it feels like there has been little thinking about that main question, and few profound answers that have stuck. What does a Labour version of public service reform look like with the spending taps stuck?

Starmer may not have to answer the question now; he can win without doing so. But he will have to do so in government. He may take the New Labour path to victory, but he will not be able to take the New Labour path in government. The history of Labour prime ministers governing when the cake is shrinking is not encouraging. That makes deep strategic thinking all the more urgent. If Starmer can’t plot something of his own, it will quickly be revealed that his plan is not so different to Sunak’s plan: hoping that something just turns up.

[See also: Why is Keir Starmer backing the two-child benefit cap?]

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