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What do by-election victories mean for Labour’s policy agenda?

Some by-elections have lasting repercussions, but will recent victories give the opposition confidence to be more radical?

By Jonny Ball

As expected, Labour has won the Wellingborough and the Kingswood by-elections. As my New Statesman colleague George Eaton reported in the Morning Call, the story is “one of Conservative collapse”. The go-to election guru, John Curtice, pointed out that the rise in Labour’s vote share is around half the level of the fall in the Conservative vote. “In Wellingborough, the party suffered the largest fall in its vote in by-election history (37.6 per cent),” George reports.

Still, it is a highly creditable opposition performance that will calm any nerves that had emerged after a week of very poor headlines. The party has spent a week reviving the anti-Semitism crisis as part of its campaign in Rochdale, and that mess follows the biggest U-turn of Starmer’s leadership so far – the dropping of his £28bn green prosperity plan pledge after much dithering. But as the declarations came in past the early hours of this morning, they signalled that Labour is still on course for a majority in the general election.

So, what lessons can we take from this victory? Some by-elections have long-lasting repercussions. Regular GT readers will recall that the Tories winning in Uxbridge last year provoked a string of anti-net zero announcements and a softening of green measures from both parties. 

This, followed by the party dropping its flagship sustainability pledge, might leave people wondering: what actually distinguishes Labour from the Conservatives on matters of the economy? Even the most detail-obsessed policywatchers would struggle to draw a strong dividing line. They might mutter something vague about industry partnerships or planning reform. But, you’ll remember, the current government also pursued these with some vigour before climbing down in the face of a bit of concerted opposition.

The £28bn figure has been scrubbed from the record, quite literally. If you take a look at the online version of the “Make Britain a clean energy superpower” mission, you’ll notice the title reads: “Clean Power Mission Doc – 8 FEB AMENDS”. A poor Labour staffer has no doubt had to “Ctrl+F” the document and delete any mentions of “£28bn”. However, the mission target of a clean grid by 2030 still stands. The document concedes that: “The significant increase in both clean power generation and clean industry will require four times as much grid infrastructure to be built in the next seven years as has been built in the last 30.” No mean feat.

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How this will be achieved without a vastly expedited planning process, plus large-scale public investment, is unclear. Even before the fiscal pledge disappeared, one X critic, who claims to offer “unbiased” chatter on energy and water, said the goal was “equivalent to saying we will land on Mars by 2030” (less moonshot, more Mars-shot). The GMB Union’s leader also previously said it was “impossible, I don’t even worry about it. It cannot be done.” These were criticisms when the £28bn pledge was in place, but they’re given new weight without the commitment of such capital investment.

Labour hopes the private sector will step in to fill the gaps. Balancing the books by suppressing public investment and pursuing private finance recalls the doomed PFI schemes of the New Labour era. These kept extra borrowing off the Treasury’s balance sheet, but they burdened the public sector with interest payments that far exceeded what would have been paid if projects had simply been delivered with public capital expenditure.

A new Common Wealth report on Labour’s still-existent Great British Energy proposal points out that “a public company would enjoy significantly lower costs”. Even in the era of higher interest rates, governments can borrow far more cheaply than private corporations. Melanie Brusseler, a senior researcher at the think tank, said “relying solely on private investment imposes structural limits to decarbonisation of electricity: fragmentation, the need to maximise profits and vulnerability to market shocks… With lower costs of capital, a public energy company would be able to invest in the transition more rapidly, effectively and at lower cost.”

The public seems to agree, including Conservative voters. A YouGov poll commissioned by Common Wealth found that 61 per cent of 2019 Tory voters supported the creation of a publicly-owned energy company investing in renewable energy, while 68 per cent thought that the current amount of publicly-owned offshore wind – less than 1 per cent of the total – is too little.

But yesterday’s by-elections suggest that despite the chaos surrounding Labour over the past month, its softly-softly approach is working. It has become the default party: not setting the world alight, but certainly better than the other lot. The result recalls James Callaghan’s observation of times, “when there is a sea change in politics. It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of.” Perhaps, given the parlous state of household finances, stagnating living standards, crumbling public services, and, let’s not forget, another recession, it doesn’t matter what Labour is offering – time’s up for the Tories.

This article was originally published as an edition of the Green Transition, New Statesman Spotlight’s weekly newsletter on the economics of net zero. To see more editions and subscribe, click here.

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Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
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