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11 October 2023

Labour’s quiet radicalism is getting louder

Keir Starmer and Rachel Reeves are championing an agenda significantly to the left of New Labour.

By George Eaton

In the UK, the Conservative Party normally wins elections. This fundamental truth is the key to understanding Labour’s enduring caution. The Tories have had nearly as many prime ministers in the last 13 years (five) as their rival has had in its entire history (six).

After Jeremy Corbyn’s leadership, Keir Starmer was always destined to appear a more conservative figure. He has unashamedly junked many of the policies that defined his failed predecessor: renationalisation of the public utilities, abolition of university tuition fees, higher income tax for top earners. “Corbynism in a suit” was merely a ruthlessly effective strategy to win the 2020 leadership election.

But this breach has often masked areas of continuity. For fear of alienating voters and business leaders, Labour has tended to clothe radical policies in conservative language (a strategy also deployed by Joe Biden during the US presidential election). As a consequence, actually existing Starmerism has only been evident in dry, often obscure documents.

Yet at Labour’s conference in Liverpool this week, the disparity between rhetoric and policy was bridged. In his leader’s speech, Starmer, sometimes derided as a Blair clone, reaffirmed his distance from New Labour. He spoke of “a future where we believe worker rights are good for growth, inequality corrosive”.

By contrast, before the 1997 general election, Tony Blair boasted that his government would “leave British law the most restrictive on trade unions in the Western world”. Asked by Jeremy Paxman in 2001 whether the gap between the rich and the poor mattered, Blair replied: “It’s not a burning ambition for me to make sure that David Beckham earns less money”.

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A Starmer government would not repeal the Thatcher-era anti-union laws but it would abolish zero-hour contracts, end “fire and rehire”, expand collective bargaining and grant workers basic rights, such as sick pay, parental leave and protection against unfair dismissal, from the first day of a job. (It was no accident that the omnipresent Peter Mandelson warned that “we have to be careful about labour market reform”.) These measures, combined with Rachel Reeves’s promise of an inflation-weighted minimum wage, would reduce the inequality that New Labour was often indifferent to. 

This approach is reminiscent of an agenda popularised during Ed Miliband’s leadership: “predistribution”. The term, coined by the Yale political scientist Jacob Hacker, denotes pro-equality measures that precede traditional tax and spend (redistribution): higher wages, workers’ rights, stricter corporate governance. In short, a model for social democracy in leaner times (the concept was embraced by Reeves during her time as shadow chief secretary to the Treasury from 2011-13). 

Labour is cautious on tax and spend for a mixture of political and policy reasons. It is determined to avoid both the appearance and the reality of fiscal profligacy: UK debt interest payments are forecast to be the highest in the developed world this year. But this does not amount to a bland affirmation of the status quo.

Reeves has announced limited but politically potent tax rises: the abolition of non-dom status, higher stamp duty on foreign property buyers and the imposition of VAT on private school fees. In her speech, the latter was justified in far more populist terms than previously: “we will put that money into helping the 93 per cent of children in our state schools”. For many, not the few – the groundwork has been laid for the additional tax rises that a Labour government would almost certainly have to impose.

Similarly, while the party has moderated its promise of £28bn a year of green investment, it remains committed to borrowing for investment and establishing a National Wealth Fund. During Miliband’s leadership, commentators lamented Labour’s failure to make an explicit case for borrowing; in his conference speech, Starmer did just that, championing investment that can “kick-start growth” and “save money in the long run”.

Public ownership – such a taboo for New Labour that Gordon Brown hesitated to nationalise Northern Rock in 2007 – was also a feature of the conference. Starmer reaffirmed his commitment to GB Energy, while the soft left shadow transport secretary Louise Haigh confirmed that Labour would renationalise the railways. 

At the 1976 Labour conference Jim Callaghan, the prime minister, ushered in the Thatcherite age when he stated: “We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists.”

Starmer’s speech echoed that address – but from the opposite ideological direction. “Those ideas are finished,” he declared of trickle-down economics. “Tyrants like Putin pay little regard to the niceties of market dogma… In the end they always make working people pay.”

Governments are ultimately shaped by the world in which they find themselves. Who imagined that Brown would nationalise the commanding heights of the banking sector or that Sunak would pay the wages of nine million furloughed workers? In an age of permanent crisis, a Labour government will probably have to be more rather than less interventionist than expected. But this week has shown that the party’s starting point is already more social democratic than appreciated.

“Globalisation, as we once knew it, is dead,” declared Reeves in her conference speech. She could have added: so is New Labour.

[See also: Labour and the death of consensus]

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