It was Nigel Lawson who stated the ambition most clearly. Nine years ago, a fortnight after the UK voted to leave the EU, the late Conservative chancellor hailed an opportunity to “finish the job that Margaret Thatcher started”. For free marketeers, Brexit was the method, the object was to change the country’s soul.
The description of their vision as “Singapore-on-Thames” has always been erroneous – this imagined libertarian Disneyland has a highly dirigiste state. But the aim was not in doubt: a Britain in which taxes would be cut, spending reduced and regulations eliminated.
Brexit is an increasingly friendless project – Labour MPs note with interest how rarely Reform dares mention it; the last reference on the party’s X account was in March. Only 29 per cent of the country, according to a new More in Common poll, would still vote Leave, while 49 per cent favour a referendum on rejoining the EU within the next five years. Far from regarding Keir Starmer’s Europe deal as a “betrayal”, most believe it is too modest.
Leavers can take solace from the implacability of Labour’s red lines: Starmer has suggested there will be no return to the single market, the customs union and free movement in his lifetime. But those on the right who always viewed Brexit as a means rather than an end lack such consolation.
If there is anything resembling a clear pattern from Labour’s first year in office it might be this: the embrace of a more European-style economy. After Brexit, France and Germany took seriously the threat of acquiring a free-market upstart on their doorstep. In practice, the UK is mirroring them.
Start with taxes and spending. As Rachel Reeves likes to remind left-wing critics, she used her first Budget to impose the largest increase in the former since 1993: £41.5bn, or 1.2 per cent of GDP. By 2027-28, the UK, a country traditionally described as having “US-style taxes”, will have a tax take of 37.7 per cent, putting it within touching distance of the Netherlands and Germany (even before Reeves’ planned sequel).
Public spending will settle at a similarly European level of 43.9 per cent of GDP. A shift that the Conservatives could plead was temporary – owing to the emergencies of the pandemic and the energy crisis – is becoming permanent under Labour. Reeves, fittingly, replaced a portrait of Lawson in her office with one of Ellen Wilkinson, Clement Attlee’s education minister and a founding member of the Communist Party of Great Britain.
Next turn to workers’ rights. Tony Blair once described his government’s role as “to campaign to extend flexible labour markets to the rest of Europe”. Starmer, by contrast, through the Employment Rights Bill, is importing a more continental model: a ban on “exploitative” zero-hours contracts, an end to “fire and rehire” and the extension of full rights to workers from day one. Cabinet ministers proudly point out that, far from being “watered down”, the bill has been strengthened in areas such as non-disclosure agreements.
Then there is ownership. The UK’s aversion to nationalisation under Thatcher and New Labour was yet another dividing line between it and statist Europe. Now Ed Miliband boasts of having established the “first publicly owned energy company in over 70 years” (GB Energy), and rail franchises – some of them previously held by France and the Netherlands – are being reclaimed by the British state.
This European turn could yet extend to welfare. Papers by Labour Together, being studied by No 10 and the Treasury, call for the reassertion of the contributory principle – with a far clearer link between what people pay in and what they get out, as is typical on the continent. This, the think tank suggests, would serve as an antidote to populists exploiting a broken social contract – one adviser references the fury of the Inbetweeners actor James Buckley at having to pay for a garden waste collection even as council tax continually rises.
A new digital contribution card – recalling the National Insurance stamps once received by employees – is proposed alongside a system of unemployment insurance (potentially set as a share of earnings). Back in 2021, in a 12,000-word essay for the Fabian Society, Starmer championed the “contribution society”, one based on “being part of something bigger, playing your part, valuing others”. This notion, cabinet ministers such as Liz Kendall and Shabana Mahmood believe, should be central to Labour’s philosophy.
There are moments when Starmer’s often inchoate approach acquires more definition. During his press conference with Emmanuel Macron last month, he spoke of proving “that social democracy has the answers” in contrast to the “performative populism” of Nigel Farage. Here was a riposte to those who accuse him of engaging in no act more complex than chasing Reform’s tail.
But what direction is Starmer heading in? The UK is charting a different course yet Labour has left voters wondering whether this is the product of accident or design. In his first speech as Prime Minister, Starmer vowed to lead a government “unburdened by doctrine” – an approach that disillusioned MPs contend has left his administration rudderless. “There’s too many concepts floating around at too high a level, which is what happens when intellectual leadership is lacking,” says one.
The task facing Labour this autumn is to provide it. Rather than finishing the job that Thatcher started, Starmer has chosen to begin reversing it. He will soon have to tell voters why.
[See also: The Online Safety Act humiliates us all]
Content from our partners
Related
This article appears in the 07 Aug 2025 issue of the New Statesman, Summer Special 2025
Join the debate
Subscribe here to comment