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  1. The Politics Column
16 August 2023

Labour’s caution could turn to radicalism in office

If Keir Starmer makes it to No 10, he will inherit a nation in crisis.

By Freddie Hayward

Victory is the sole test of a successful campaign. Opposition is impotence. Change is impossible without achieving office. These maxims underpin Labour’s relentless focus on winning the next election and explain MPs’ impatience to end its 13-year exile. There’s a conviction that squandering Labour’s best chance to govern since 2010 would be unforgivable. The party has thus united behind a disciplined, cautious campaign that jettisons radicalism and aims to follow public opinion, not lead it.

In pursuit of victory, Keir Starmer has leaned to the right this summer. He’s defended the two-child benefit limit, delayed Labour’s promise to spend £28bn a year on green investment and conceded that the party would use barges to house asylum seekers (at least temporarily). Starmer is sanding away any potential obstacle that might upset the long campaign to the next election.

Labour needs that campaign to be fought on its terms. To that end, Starmer’s team is using parliament’s summer recess to prepare an autumn offensive that will show voters how its grand ideas – clean power by 2030, halving serious violent crime, the highest economic growth in the G7, to name a few – will be delivered. The aim is to convince voters that these pledges will outlive the campaign. As one aide said: “We’re going to go into more detail about what the missions mean for the machinery of government and the digital state. What do they mean for devolving power? What do they mean for changing planning laws?”

Pragmatism is the point. The view in Starmer’s office is that Labour cannot draw on the optimism and millennial fervour that thrust Tony Blair into No 10. Inflated talk of “new dawns” is ill-suited to a country ravaged by inflation. “What we did before 1997 would just not work now,” a senior aide said. Voter cynicism means politicians must work harder to sound credible. Just as No 10 is convinced it must first deliver on Rishi Sunak’s priorities before outlining a vision, so Labour believes that to be trusted it must first convince voters of the details.

In this age of cynicism, the hope is that Starmer’s austere persona is better suited – more believable, more realistic – than Blair’s messianic charisma. The strategy is to resist extravagant spending plans. “We need the tick from the IFS [Institute for Fiscal Studies] on the manifesto – that’s so important,” another party aide said.

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[See also: Keir Starmer will bury Blairism]

Yet this approach invites a rebuke as old as the party: to win, Labour needs to move to the right, but if it moves to the right, what is the point in winning? Starmer’s detractors argue that the fiscal constraints imposed by the shadow chancellor Rachel Reeves limit the party’s ambition. In June, Starmer suggested Labour would reduce debt as a share of GDP within a five-year parliament – a target potentially stricter than Jeremy Hunt’s, which uses a rolling five-year period.

In response, insiders argue the party needs to be weaned off its habit of simply demanding more money for public services. Reform is the answer, they say. NHS spending has risen in real terms, and yet waiting lists are at a record high.

Alongside reform, they point to policies that cost little: relaxing planning to increase house-building; devolving power to the regions; abolishing zero-hour contracts; and negotiating sector-wide pay deals. Money isn’t everything, goes the line – take New Labour’s introduction of the Supreme Court, devolution and the minimum wage.

Yes, radical change does not require high spending – particularly constitutional and social reform. But Reeves might have to spend more once in office, either through higher taxes or borrowing. Economic growth is central to Labour’s project. The gamble is that it will return without further spending. Only with growth will Labour have the money to invest. But what if you need to spend to stimulate growth?

Even if Labour doesn’t face a pandemic, a new war or a global economic recession – the recent triggers for higher spending – it will inherit a nation in crisis. Dismal productivity. The worst living standards squeeze since the Napoleonic era. The highest regional inequality of any major European country. Inheriting such a situation, combined with expectations of change after consecutive Tory governments, might sway the new chancellor more than any desire to reduce debt. You can already picture Reeves standing at the despatch box, brow furrowed, proclaiming that action is required because the situation is worse than she understood.

The government’s fiscal rules are likely to be broken, according to the Office for Budget Responsibility, meaning more money will already have to be found. If Reeves doesn’t want to borrow, then she could raise taxes on the wealthy – as already promised for non-dom residents and private schools. The actions the party takes in office will depend on the economic zeitgeist which is, increasingly, of the left.

Clement Attlee considered a similar problem in a 1946 debate over the National Insurance Bill. “Supposing the answer [to expanded welfare] is ‘no’, what does that mean?” he said. “It really means the sum total of the goods produced and the services rendered by the people of this country is not sufficient to provide for all our people at all times.” No one in the shadow cabinet today would formulate the choice facing the government in such stark terms. But once in office, the momentum for action might prove irresistible.

[See also: Keir Starmer’s reshuffle was politically ruthless]

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This article appears in the 16 Aug 2023 issue of the New Statesman, Russia’s War on the Future