New Times,
New Thinking.

The Labour moment

Keir Starmer’s party has embraced the positions that we have long advocated on the economy, foreign policy and globalisation.

By New Statesman

 What is the mood in the country as we prepare to vote in a general election for the first time since December 2019? Under the Conservatives, Britain has lost its way, and that is understood by voters. The election on 4 July, therefore, takes place at a time when trust in politics is at an all-time low and the national mood cynical. Voters want change but have no overriding loyalty to any party.

The Conservatives will be punished for their carelessness, misrule, frequent changes of prime minister and broken promises on immigration, Brexit, levelling up and much else. For the first time on record, living standards were lower at the end of the last parliament than at the start, and the tax take is nearing a postwar high. The model of economic growth that collapsed during the 2008 financial crisis has never been replaced. Crumbling schools, overcrowded prisons, bankrupt councils and potholed roads testify to the decay of the public realm.  Rough sleeping and child poverty – social ills that the last Labour government sought to eradicate – have resurged.

The election campaign is both momentous and underwhelming, because of what is at stake for the country: the two main party leaders have been defined by their caution. Both have been upstaged by the radical showman Nigel Farage, who leads a populist revolt and a non-party party, Reform (our interview with him is on page 36), which has surged in the polls. There is a democratic deficit in our politics – typified by the antiquated first-past-the-post electoral system – and Mr Farage exploits it.

After winning an 80-seat majority in 2019, the Conservatives had the chance to lead a new cross-class realignment. Boris Johnson vowed to repay the faith of former Labour voters in the “Red Wall” by spreading “opportunity to every corner of the UK”. There at least seemed the possibility of a different kind of conservatism: one that embraced state activism and social cohesion. But the “levelling-up” project, hampered by the Treasury and the indifference of Rishi Sunak, never came close to justifying the boasts made of it. Mr Johnson self-destructed, as he was always destined to do: he could campaign but lacked the character to govern in the national interest.

The Conservatives responded to Mr Johnson’s defenestration by electing Liz Truss, who was palpably unfit for high office. Her mini-Budget in September 2022 – comprising the biggest tax cuts since 1972 – provoked market chaos and damaged the UK’s international reputation. The ultimate free-marketeer was undone by the markets and the Tory party swiftly removed her: an example of parliamentary democracy working as it should.

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Rishi Sunak, who became the UK’s first British Asian prime minister in October 2022, can claim to have surpassed his immediate predecessors. He is a man of good character, although he lacks emotional intelligence and cannot do politics well. Along with Jeremy Hunt, his Chancellor, and perhaps the last true Cameroon in the Commons, he stabilised the economy after Ms Truss’s premiership and defied back-bench rebels to achieve a Brexit deal for Northern Ireland. But the Tories have offered nothing resembling the national renewal that the United Kingdom requires.

Far from investing in growth, Mr Sunak cancelled the northern leg of HS2 – an act that epitomised British short-termism. Rather than funding public services, he has spent more than £20bn on cuts to National Insurance (with gains concentrated among higher earners). He shares Ms Truss’s unwavering faith in market forces and deregulation. Unlike past Conservatives such as Harold Macmillan and Michael Heseltine, he lacks an appreciation of the role of a democratic state in a prosperous economy and a good society.

The election was called at Mr Sunak’s behest, but he has led a dismal campaign. His decision to leave the D-Day commemorations early revealed a chronic lack of political judgement. A fantastical Conservative manifesto – centred on £17bn of implausible tax cuts – confirmed his party’s intellectual exhaustion. A series of insider bets on the election date exposed its moral torpor.

 When Keir Starmer became Labour leader four years ago, most dismissed the possibility that the party could return to government in a single term. It had suffered its worst election defeat since 1935 and been embroiled in a long civil war. The anti-Semitism crisis – the principal reason we did not endorse Labour in 2019 – had left the party morally as well as politically discredited.

Mr Starmer has shown a ruthlessness that few anticipated, however. He expelled his predecessor, Jeremy Corbyn, for stating that the scale of anti-Semitism within Labour had been “dramatically overstated” by opponents. Jewish members and former MPs such as Louise Ellman and Luciana Berger, who left Labour under Mr Corbyn, have returned to the party.

The British people turn to Labour reluctantly. From the outset, Mr Starmer has recognised that to win his party must be credible rather than simply radical. Drawing on the legacy of the Attlee government, he has reaffirmed the party’s commitment to Nato membership and to the UK’s nuclear deterrent. Under the shadow chancellor, Rachel Reeves, Labour has avoided the temptation to make unfunded spending commitments in pursuit of short-term popularity. Unusually, the party now outpolls the Conservatives on both the economy and national security.

In our 2019 election Leader, we argued that for Labour to succeed it first had to accept a new paradigm: the end of “hyperglobalisation” and the return of active government. The New Statesman was founded in 1913 and, despite shifts in political position, it has always believed in an interventionist, even moral state, that protects citizens from the excesses of the market.

We called for Labour to embrace a politics of the common good and social reciprocity, and for the UK to adopt a realist foreign policy based on the world as it is, not as liberals wish it was. We are encouraged that Labour has embraced our positions – see our interview with David Lammy, the shadow foreign secretary, on page 22. Where the New Statesman leads, Labour eventually follows.

“Globalisation, as we once knew it, is dead,” Ms Reeves has declared. Rather than simply fixing markets, she recognises that the state must actively shape them. Her Mais Lecture, delivered in March, represented the most comprehensive statement of social-democratic economics for a generation. Both Ms Reeves, through her doctrine of “securonomics”, and Mr Lammy recognise that a new era of great-power conflict, trade wars and climate crisis demands an interventionist state.

We have, then, the beginnings of a new approach to political economy. Labour’s manifesto promises the creation of a National Wealth Fund, an Industrial Strategy Council and Great British Energy, a publicly owned renewables company. The railways would be renationalised, workers’ rights strengthened and devolution extended.

But Labour will face immense pressure for quick results. Its plans to fund public services lack detail. Promised tax rises on non-domiciled residents, oil and gas companies, private schools and private equity executives would raise £8.6bn – too little to prevent a return to austerity.

Mindful of this danger, the party has consistently refused to rule out additional tax rises (such as in capital gains tax). As we have long asserted, there is a compelling economic and moral case for taxing wealth more heavily. But by refusing to make this argument in advance, Labour has ensured that it will enter office with a thin mandate.

The precondition for a better Britain is the removal of the Conservatives from office. Misrule on this scale should – and will – have consequences. Unlike in 2019, Labour is once more a credible alternative. The party’s programme of economic change deserves support. But in seats where the Liberal Democrats are the strongest opponent to the Tories, readers should vote tactically.

 The same is true in Scotland: the Scottish National Party’s record in office is a profoundly unimpressive one; good government has been jettisoned in pursuit of independence and unpopular progressivist causes. A Labour administration has an opportunity to forge a reconfigured Union by devolving power to the nations and regions.

After years of ideological experimentation, the UK needs a concerted focus on its economic and social woes. Labour – the party that answered the call for change in 1945, 1964 and 1997 – has an opportunity to once more remake Britain. But it must govern in the interests of all voters and resist the temptation to revert to default progressivism once the election is won.

Labour’s support is broad but shallow – its projected landslide victory owes more to anti-Tory sentiment than genuine enthusiasm. Should the party fail to satisfy the appetite for change, punishment from a volatile electorate will be swift. But first Labour has a chance to renew faith in politics as a vehicle for progress. For the sake of democracy, it must take it.  

[See also: A conspiracy of silence]

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This article appears in the 26 Jun 2024 issue of the New Statesman, The Lammy Doctrine