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What does Labour’s win mean for the green transition?

The party has achieved a seismic victory – but delivering on the climate agenda won't be easy.

By Jonny Ball

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

Labour has won a historic majority. However tepidly the party’s manifesto was received in some quarters, we’re undoubtedly in a new era now. For those sceptical about the Starmerite offering and whether this will make any difference to the way the UK does public policy, it’s worth remembering that it’s not very often we get a sea change in political philosophy like this. Fundamentally, we will have people in charge who didn’t go into politics with dreams of shrinking the state, cutting taxes and singing the praises of free markets and limited government. Labour’s members, MPs and cabinet see government as a solution, not a problem. They believe in notions of social justice and equality (as vague and varied as these can be), and they have a rough critique of some of the worst consequences of untrammelled markets.

For those who long for a more radical approach to deal with the UK’s mounting social crises, Labour’s caution has been frustrating. But the Ming vase strategy has worked for now, even if the strength of the Reform vote and pro-Palestine independents in many Labour seats was one of the stand-out stories of last night. Labour’s historic coalition has been based on an alliance between Hartlepool and Hampstead, Stoke and Stoke Newington: the working-class, post-industrial towns and smaller cities joining forces with more metropolitan strongholds. That coalition waned for years before its final breach in 2019. It has now been restored, however shakily and with maximum vote-to-seat efficiency, on the basis of gigantic anti-Tory feeling and the split of the right-wing vote.

So what does it all mean? What’s in store for us over the next half decade?

Part of Labour’s plan is to get the energy grid to net zero by 2030. But life comes at you fast, as they say on the internet, and in government, the best-laid plans can go awry in the face of global headwinds and seismic shocks that are beyond the control of Downing Street. The party inherits a grim economic outlook, tight fiscal constraints, and a bizarrely divided electorate.

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But, once again, we’re at the beginning of a new and refreshing political era. The noises that the cabinet will make are going to sound more like the “productivist” stance of the Turkish economist Dani Rodrik, which “prioritises the dissemination of productive economic opportunities throughout all regions of the economy and segments of the labour force”, or the mission-oriented policy advocated by the Italian economist Mariana Mazzucato, rather than the small-state, austerity logic we’ve grown used to.

Pursuing net zero quickly through green industrial policy will not alienate large swathes of government benches in the same way it did under the Conservatives. If there’s fiscal headroom as a result of over-shot growth forecasts or interest rates falling and allowing for more favourable conditions for long-term borrowing, then it will be investment in public services and infrastructure that will be prioritised over tax cuts.

We have a strange set of results, in which Labour has more or less stood still on 2019’s disaster in terms of raw vote share, but doubled its seat tally, delivering the supermajority forewarned by Rishi Sunak in the final days of the campaign (first past the post is one helluva system, right?). That means they have the numbers in the Commons to make good on their promises.

But fascinating political battles are about to begin. A huge part of Labour’s offer centres around delivering planning reform. Making it easier and quicker to build is key to the party’s promises on green energy. That will alienate some people. Starmer will have to make enemies. Many new Labour MPs represent peri-urban areas that are averse to new pylons, as well as new housing. The new Prime Minister promises to get tough on Nimbys, but often those Nimbys are Labour councillors, Labour MPs and Labour voters. If Labour bulldozes through local interests to prioritise the race to net zero via grid upgrades, then that will have political consequences.

For now, it’s time to enjoy the turning of the page. Labour is fully committed to green politics and green industrial strategy in a way that sometimes felt forced from the Tories, particularly more recently when they went very cold on climate under Sunak. If we are to take the party at its word, Labour says new oil and gas licences won’t be issued, and billions will be allocated to de-risking private investment in renewables. The form this investment takes, and whether it becomes a round of private finance initiatives 2.0, remains to be seen. Bloomberg and the Sunday Times have reported that the now-ruling party plans to keep within its fiscal rules by offloading borrowing to the private sector in the same way Tony Blair and Gordon Brown did in the 1990s and 2000s.

If this endeavour fails, then last night’s results revealed that the emphatic victory for Labour is based on a broad but shallow support. The success of the Greens in Bristol, as well as independents and Reform, shows that if Labour cannot deliver, voters have several other directions in which to travel in this chaotic, schismatic political era.

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