A year and a half into this parliament, can Keir Starmer finally nail down a narrative and communicate what it is exactly his government is trying to achieve – and how it plans to get there?
This was ostensibly the question the Prime Minister was answering with his speech today. As the dust settles from what is widely regarded as one of the most shambolic fiscal events in recent history (the mini-Budget of Liz Truss and Kwasi Kwarteng is in its own category), Starmer was out selling a package of measures that will see the tax burden on working people rise (thanks to threshold freezing) to pay for an increased benefits bill, with little to no prospect (according to the OBR, anyway) of obtaining that elusive growth.
That agenda was somewhat overshadowed by a more immediate, more political question. All the journalists present wanted to ask the same thing. Had Reeves stressed an invalid productivity downgrade in order to mislead the public and MPs about the size and gravity of the black hole in public finances?
But the two questions are linked. Both reveal the muddle the government has got itself into with its messaging and its intent.
First, Starmer’s speech. The Prime Minister framed the Budget in the same terms he’s been using since the election campaign. He talked of “a Britain with its confidence and its future back”, of “economic renewal” and of “beating forecasts”. According to the PM: “Because we confronted reality, we took control of our future and Britain is now back on track.” Starmer is also “confident we have now walked through the narrowest part of the tunnel”.
That confidence is not widely shared. A majority of Britons believe the UK is currently in recession (technically it isn’t, but the vibes aren’t good), 57 per cent do not believe the cost of living crisis will ever end (the highest figure since More In Common began its polling) and more than three quarters think the UK economy is in a bad state. Snap polling from YouGov since last Wednesday has that only 11 per cent think Reeves doing a good job as chancellor, a damning three per cent say the economy is in a “quite good” state (with zero percent saying it is in a “very good” state), and 67 per cent think it will get worse over the next 12 months.
Starmer presented three optimistic ways forward: rethinking (cutting unnecessary) regulation, reforming welfare, and building closer ties with the EU to mitigate the damaging impact of Brexit. All of these are things we have heard before. On welfare, the government has already tried and failed once to get measures past Labour MPs. On the EU, this year’s reset made some first steps, but there are limits to what can be achieved while sticking to the “red lines” on the customs union and single market. Starmer also claimed the Budget was good for growth because of its measures on entrepreneurs. Workers – particularly young people walloped with a double stealth tax – may have a different view. The OBR certainly does.
Which brings us to the other question. Was Reeves dishonest in her gloomy pitch-rolling heavily hinting at tax rises, when she seemed to magically find extra cash down the back of the Treasury sofa at the last minute?
Quite whether this is a cheeky fudge or a blatant betrayal will have to be hashed out. (And judging by the media questions, the heat is not letting up anytime soon.) But even if you believe, as Starmer put it, that “there was no misleading”, then the chancellor still chose to increase taxes in order to fund extra headroom and benefits spending. It’s difficult to argue that this has much to do with growth. Most of the new cash Reeves raised won’t be going into investment, but into funding the status quo just a little better. That’s fine for keeping things ticking along. But does it really signal the likelihood of an economic turnaround?
“We’re asking everyone to contribute a little more,” Starmer said towards the end, echoing the nauseating phrase Reeves has used repeatedly in her Budget and surrounding coverage (the government is not “asking” anyone to do anything – it’s requiring). The challenge is that the PM has never been able to quite articulate how that extra contribution will result in the change the public voted him in because they wanted to see. All they see is higher taxes with little hope on the horizon. And today’s Budget defence speech shed little additional light.
[Further reading: Labour’s conformism is crushing Britain]
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