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25 July 2022

Why Keir Starmer has borrowed the Tories’ “magic money tree” attack line

The Labour leader is framing Liz Truss and Rishi Sunak as dangerous radicals, and his party as mainstream and safe.

By Rachel Wearmouth

Keir Starmer’s deepest electoral fear is failing to convince voters that Labour can be trusted with the economy. The 2019 general election was the party’s fourth defeat in a row and its worst since 1935; Jeremy Corbyn had promised free broadband, free university tuition and the nationalisation of rail, mail, water and energy.

Offering radical change in the middle of a cost-of-living crisis, while returning Labour to more familiar political territory, is a huge challenge for Starmer and his shadow chancellor, Rachel Reeves. But in politics, how you frame your argument, and when you choose to do so, can be half the battle.

Liz Truss and Rishi Sunak’s vicious battle for the Tory leadership, in which barely an hour passes without Conservatives attacking each other, is a gift for the opposition. The former chancellor, Sunak, wants to retain the painful tax rises he introduced while at No 11, while the Foreign Secretary has proposed the equivalent of £30bn a year in tax cuts.

At a speech on Labour’s plan for the economy in Liverpool today (25 July), Starmer tried to exploit the Conservatives’ divisions – calling Sunak “the architect of the cost-of-living crisis” and Truss “the latest graduate from the school of magic money tree economics”. The “there is no magic money tree” line has traditionally been used against Labour by the Tories. In declaring that he would “not be distracted by siren calls from the right or the left”, Starmer is laying claim to the centre ground – defining his party’s offer against both Thatcherite radicalism and Corbynomics.

He proposed five principles for the economy and aligned Labour with other centre-left parties that are winning elections around the world, making voters feel he is a safe choice for prime minister. Starmer referred to a meeting with the German chancellor Olaf Scholz, a Social Democrat who was elected last year. Scholz, he said, had shown that “levelling up is based on practical plans, not far-fetched promises”. He also emphasised that Reeves’s approach would mirror the US treasury secretary Janet Yellen’s “modern supply-side economics”, which squarely rejects tax cuts and deregulation to focus on education, labour supply and infrastructure.

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Starmer also namechecked Gordon Brown – specifically his review of Labour’s devolution policy – and announced that Labour would back the creation of an industrial strategy council, with statutory powers, to plan for long-term growth.

The next election could be strikingly similar to the one in 2015, when David Cameron’s relentlessly repeated the Conservatives’ “long-term economic plan” for the austerity-hit UK in his defeat of Ed Miliband. Starmer used the words “long-term” six times and “growth” 38 times in his speech. If the Labour leader sounded staid, even boring, to some degree that’s the point. He does not want to alarm voters as he tries to win over Tory supporters.

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A harder task for Starmer could now be winning over progressives, some of whom are turning to the Lib Dems and Greens. Before Starmer’s speech, Reeves suggested in a broadcast interview that Labour would not take rail (or water or energy) companies back into public ownership, despite consistently high voter support for nationalisation. While the shadow chancellor has since back-tracked, the exchange increased tensions with the party’s left wing.

Starmer may wish to plot a steady course to No 10 but before long he will also need start energising his core voters.

[See also: Keir Starmer’s sacking of Sam Tarry threatens a new Labour civil war]