This is a government of conformists. The core doctrine remaining to Keir Starmer and his “Project” is cleaving senselessly to elite consensus and the vested interests of lobbyists. Instead of a politics of real change, we have a politics of issue management, of botch-jobs and technological panaceas, of the repression of alternatives. Last week’s Budget was a case in point.
Having prioritised fantasies about high growth, the government is now constrained by minimal levels of growth. It has produced a budget to maintain the status quo through a combination of small tweaks, and three significant changes: increasing the income tax take (without breaking the letter of the damaging manifesto commitment of 2024), taxing EVs as should have been done years ago, and ending the untenable two child benefit cap, which the government could have actually claimed credit for had it been done in the first days of the government.
Otherwise there were minor improvements to what were in effect tax breaks for investors, the pensions of the rich, and the owners of expensive houses.But the time when this government was an actor upon events, rather than their merely their slave, seems already behind us. Economic stagnation continues, the climate crisis swells, and Britain accepts the foreign policy of Donald Trump’s United States. How did the British political class become so timid and so conceited?
Risk avoidance and conservatism are no doubt the default position of most governments and their administrative machines. But things can be and were different. In the past British governments and the British elite have been more than capable of thinking originally and changing things radically. Without dissolving into nostalgia, there have been periods when the United Kingdom was genuinely fortunate in its leadership. In the postwar decades, British leaders changed their country in fundamental ways. Riding a long boom in economic growth, they delivered social advance for the majority, and a transformed infrastructure. They built and changed the welfare state and the NHS; they abandoned Empire and went into the Common Market. They reduced inequality.
Belying stereotypes of “gentlemen amateurs”, the intellectual and political class who imagined and delivered this – within and beyond the Labour party – were a mixture of Establishment thinkers and upstart administrators. Some were from big business; some had experience organising with trade unions and opposing the status quo. Beveridge, Bevin, Bevan and all their successors were committed to a project of national transformation and were open to the new thinking required. And below them was a cadre of reformers: capable administrators, political advisers, chairs of Royal Commissions. Among the social scientists, Richard Titmuss and Alec Cairncross; among the humanists, Lords Annan and Fulton; and among the scientists, Lords Zuckerman and Flowers. They took public service seriously partly because they shared Keynes’ assumption that policy decisions could be made in the public interest and affairs would be managed by discussion among a small group of wise and enlightened insiders. It was a world in which different insider groups competed, structured not just by party but by the ambition to do things differently from the past. This was a period when the state had decided to build, with public money dispensed on social housing, power stations, motorways, reservoirs and much more on a huge scale.
After the 1970s, the supply of disinterested, altruistic and informed public servants failed. The Thatcher revolution opened up lucrative opportunities for upper-middle-class young men and women in deregulated finance, consultancy and public relations. Their fathers had by default gone into either private business or public services, but either way ended up building things for the nation. Their sons and daughters made profits on asset trades, or through consultancy and lobbying promoted and protected corporates and the rich. The political elite became a subaltern class. Frontbenchers accept spectacles, suits and entertainment from donors and corporates who expect favours to be returned. A career in politics has become a corporate apprenticeship, helping ambitious individuals into boardrooms, PR firms, private health consultancies and lobbying for foreign interests. PR and newspaper executives run political communications; directors of private health companies advise on public health.
Not surprisingly, the majority of the political class in the current conjuncture lack the ambition of their predecessors. Labour or Conservative, they have little capacity for original or creative thought. They are political managers, not entrepreneurs. They are addicted to strategising fantasies of action – “stop the boats”, “smash the gangs” – and to overselling modest changes like breakfast clubs, or tiny trade deals. A telling indicator is that the quality of government documents has tumbled. Where once we had serious argument supporting serious policy, now we have glossy pictures and rhetoric about becoming “world leading”.
And yet the structural conditions call for change. The UK has faced, for more than a decade, the exhaustion of an economic model which has been sustained with increasing difficulty and diminishing returns since the financial crisis of 2008. Politics has been transformed by Brexit and the rise of the far right – both in the external threat of Reform and inside the Conservative Party. Starmer’s government is less posh and more white than recent Tory ones. But it is just as stultifyingly complacent.
Keir Starmer and his Chancellor Rachel Reeves won an election on the slogan of change. They turned out to be the conformists in chief, their ambition limited to recreating a world of 2 per cent economic growth and steady labour productivity increase, without understanding how and why the world has changed since the last credit bubble burst in 2008. Even their policies to promote growth are conformist: today’s pro-growth policies of low taxes and investment subsidies for corporates, with promotion of early-stage innovation and deregulation, are variants on yesterday’s policies of the Thatcherite experiment (which, it is too often forgotten, failed to transform economic performance). This government is so committed to failed policies that it thinks doing the same thing will bring different results.
On climate change mitigation, the Starmer government is stuck defending net zero targets after the cross-party consensus on their implementation has fractured. It is encouraging the building of new runways and roads, all in the name of growth, without recognising that growth increases emissions. For all the talk of GB Energy and a green industrial revolution, the Starmer government is pursuing the same policies as before, within inherited structures. He has retreated from promises of much lower bills, with consumers being charged for the costs of constructing nuclear and carbon capture and storage, both likely to increase rather than reduce future costs, and guaranteeing prices for producers. A levy on bills for a scandal-ridden insulation programme has been abolished, and most of the renewables levy on bills has been transferred to the taxpayer. But costs of adaptation to inevitable climate change are not on the agenda at all.
The case of water and sewerage illustrates the futility of the politics of conformism, as is show in the newly published book, Murky Water. Water has become a bitter and notably bipartisan political issue, uniting Lib Dem river-cleaning volunteers and Reform protest-voters. But government policy tackles symptoms as it triangulates between focus groups, elite consensus and lobby groups. They follow the practice of issue management, finessed by New Labour in the 1990s, whereby politicians and advisers operate in response mode to public opinion articulated in polls and focus groups, but change as little as possible.
Hence why, when he was still environment minister, Steve Reed made placatory promises to limit fat cat bonuses and halve sewage spills, promises which are deliberately misleading as they do not cap salary rises and only measure improvement against particularly bad years. In line with elite consensus, the Cunliffe Commission on the water industry has now proposed the abolition of Ofwat and a rearrangement of regulation, but also advocated maintaining the existing settlement with water companies on prices and investment levels until 2030.
More than 80 per cent of the public want water nationalisation. But they cannot have it because the superordinate aim of government policy in water and every other industry is to maintain “investability”. In practice, this means not upsetting corporates, and feeding the financial markets. Hence the continuing reluctance to take Thames Water into even temporary public ownership. Or the large-scale use of PFI investment for major new projects because the zombie water companies cannot carry extra debt on their balance sheets. Meanwhile, for the rest of us, water, electricity and gas are charged per unit consumed, and the result is something like a poll tax. The poor pay much the same as the rich, but utility bills take a much higher share of their income. The charges per unit cannot then be pushed high enough to cover both necessary physical investment and service borrowed capital.
Starmer and Rachel Reeves invoke the wrath of the bond markets to ward off any suggestion of change. And, of course, financial markets do set limits on policy when public debt stands at 100 per cent of GDP, the economy runs a trade deficit, and the pound is a standalone currency. But these real constrains do not require policies which crudely privilege rentiers over the needs of ordinary working, retired people and the disabled. That is the easy conformist choice the government has made because it cannot even imagine doing something different. Unforgivably, it was easier for them to propose unjustified cuts in PIP support for the disabled than to question prevailing wisdom.
At present the Starmer government has no wish, nor capacity, to break out of the doom loop. On the contrary, they pass on the opportunity to do things differently, and double down further on the failed nostrums of the past rather than getting to grips with new realities. The result is that corporates and finance claim guaranteed upside profits, and pass the increasing downside losses to the public. This is the true national balance sheet, and the price the country is paying for a government running on the fumes of Thatcher and Blair.
[Further reading: The Budget: our writers’ verdicts]
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