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  1. The Weekend Essay
22 June 2024

The political nightmares haunting Labour

The chaos of the past decade demands a radical new settlement.

By Phil Tinline

What are we to make of this strange election? In an inversion of the usual cliché, the campaign is being conducted in prose, while the result will read like apocalyptic poetry. If the polls are right, 4 July will bring the kind of democratic Armageddon that marks the end of one era and the beginning of the next – even as the parties quibble to the last about whether we might consider updating council tax bands from 1991. To many voters, it feels as though everything is broken, but fixing it is almost impossible.

This cognitive dissonance is all the sharper because we have been waiting for a new normal for so long – ever since the 2008 crash discredited the old post-Thatcherite consensus and the Brexit referendum demonstrated the scale of the dissatisfaction it had bred. That post-Thatcher order was based on a shared taboo: that we must never go back to the chaos of the 1970s. To break through to a new settlement, that nightmare would have to be vanquished by a more pressing one. That’s what happened in 1945, when old fears of state power and inflation were overridden by a determination never to go back to 1930s mass unemployment. That settlement endured until 1979, when the ghosts of the hunger marches were chased away by real and present spectres: strikes and inflation.

Today, once more, there is a fresh nightmare around which a new settlement might be built: the insecurity and chaos of the 2010s. The frozen pay, the soaring house prices, the queues for food banks, the dying high streets, the persecution of sub-postmasters, the burning tower, the endless Brexit frenzy, the queues at Dover, useless PPE, the profiteers, the cake, the “ca-Truss-trophe”, the cancelled trains, the crumbling school ceilings, the shit in the rivers, the broken social care system, the broken criminal justice system, the broken everything. Keir Starmer continually affirms that after “14 years of Conservative chaos” there must be no going back. But there are still rival nightmares holding Labour back from promising to tax or borrow enough to transform public services at speed. The fear, even now, of sounding like the party of “I’m afraid there is no money”; the dread of sounding anything like Truss.

Nevertheless, some of those old tropes are losing force. When Rishi Sunak aired his wild, much-disputed claim that Labour would hike every family’s taxes by £2,094, it provoked more insistence that taxes would somehow have to rise, whoever wins, because public services were so broken. The Institute for Fiscal Studies has argued that Rachel Reeves would need to find £20bn to stave off yet more cuts. Voices such as the former Tony Blair adviser Patrick Diamond, the ex-Conservative cabinet minister Rory Stewart and Duncan Robinson, political editor of the Economist, all argue that tax will have to go up. This has forced the conversation on to the question of where the burden ought to land. Labour is already targeting private equity loopholes, private schools, non-doms and energy companies. The election has prompted much talk of raising capital gains tax, and so finally shifting more of the weight on to those who profit from selling property and shares.

Labour narrates even these modest rises through a language of caution and restraint. But its fiscal straitjacket has forced a shift in focus: from redistributing wealth to redistributing power. This sort of reform doesn’t happen often in Britain, and it’s one of the things that distinguished the governments that took office in 1945 and 1979. To establish a new settlement, they first had to overcome the powers entrenched by the old order, whether insurance companies or trade unions. Here, away from the media’s obsessive focus on tax’n’spend, Labour sounds rather different.

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On our flat-lining economy, it has a story to tell about who has accrued excessive power, and why the ideological narrative underpinning it must be challenged. The manifesto calls for a “final and total rejection of the toxic idea that economic growth is gifted from the few to the many”. It denounces the way that “tax cuts to the richest 1 per cent” crashed the pound, and a “governing party that, time and again, puts its own interests and obsessions above the issues that affect families”. Reeves has also told the Financial Times that her push for growth would mean “upsetting some people” and that “We’re going to have some of those fights.” When Nick Robinson asked Starmer on Panorama if he was “prepared to make enemies to make the economy grow”, he replied “Yes.”

The biggest battle will likely be on housebuilding. The manifesto has promised to stop awarding landowners “inflated prices based on the prospect of planning permission” and to “end the farce of entire developments being sold off to international investors before houses are even built”. There are promises to use existing powers to override objections to the swift building of prisons. Labour certainly wants to co-operate with business, but it also plans to set up GB Energy, bring trains and buses back into public ownership, ban energy drinks for teenagers, and re-empower employees through the New Deal for Working People. As to the threat of being accused of nanny statism over child health, Starmer insists: “We want to have that fight.”

Clearing the way for a new consensus also involves calling out the beneficiaries of old orthodoxies, and there are some indications of this too. Labour’s manifesto condemns not just Partygate but the Johnson government “handing lucrative Covid contracts to friends and donors”, and promises a Covid corruption commissioner to claw back money taken by fraud. Employers who break employment law “will be barred from hiring workers from abroad”. Last month, shadow foreign secretary David Lammy declared that the incorporation agents, bankers, lawyers and accountants who have helped turn London into a dirty money laundromat “must face the full force of the law”. Given Labour’s recent record of retreats, we’ll have to see if all this happens. If Starmer moves on these fronts with the ruthlessness he’s applied to his own party, it would make a striking contrast with all that fiscal caution.

There may be more to come. The Phase 2 report into the deaths in Grenfell Tower is due in September. Then there are the consequences that may follow from the Post Office inquiry, and an emergency nationalisation of the sewage fountains of Thames Water. One test of how far Labour is prepared to go will be who it appoints to regulate the utilities. Another will be whether it can fold all this assorted chicanery into a story about the false ideas that have led us astray. Specifically, that certain people and institutions are such invaluable national assets that they get to do whatever they like.

In 1945, Labour was unafraid to talk in such terms, and succeeded in forging a new settlement off the back of it. The crises we have lived through in the past few years don’t match the Second World War, much as Covid triggered some striking similarities, and Labour’s manifesto is not as sweeping or radical as Clement Attlee’s. Nevertheless, it’s telling that it repeatedly invokes the 1945 government – not only for the creation of the NHS, but for its new towns, and its role in creating Nato. On the day of the launch, Nick Pearce, once Gordon Brown’s policy unit chief, suggested that Labour may face its toughest challenge since 1945 and added that, like Attlee’s manifesto, this election’s offering is much more focused on production than recent ones.

That earlier “change” election offers other precedents that shed light on today. In 1945, Churchill alleged that for Labour’s plans to work, it would require “some form of Gestapo”. This is often remembered as a gaffe, but it was just one contribution to a rolling nightmare sketched by anti-Labour candidates and writers, which warned of rule by decree, the nationalisation of everything, compulsory state allocation of jobs, and “elements” in the civil service being “instantly liquidated”.

This statist dystopia has never entirely vanished from the collective imagination: recall when Angela Rayner was asked if Labour would “nationalise sausages” in 2019. We are seeing similarly desperate attacks today, with bloodcurdling talk splashed across newspaper front pages, bewailing the “horrific” consequences of a Labour “one-party state” seizing power for decades. In the 2010s, as in the 1930s, austerity had seemed unavoidable, so denouncing active state intervention as extremist worked. But today, as in 1945, such rhetoric no longer lands. Real-life nightmares trump fantasies of tyranny. And it now seems both possible and necessary to use the state to tackle them.

Perhaps this is why Sunak’s D-Day blunder was so damaging. In 1945, it seemed only right to ensure that there would be no return to the 1930s for Britain’s working men, because they had just defeated Hitler. Sunak’s abrupt D-Day exit raised the question of just what it would take to compel him to treat ordinary people with respect, if being willing to sacrifice their lives was insufficient. In response, the journalist Lewis Goodall tweeted an interview he’d recorded with Margaret Beckett in 2015, about her visit to the 1994 D-Day commemoration as interim Labour leader. She recounted her surprise at being mobbed by British veterans and their families. Visibly emotional, she recalled thinking, “that was for Attlee’s government”. The men who ran up the beaches were not extras in a movie about Churchill, but voters, with political hopes and expectations.

And that points to a final lesson from 1945. Churchill’s warning about Mr Attlee’s Gestapo expressed a fear that in office, Labour would do too much. But there were also fears that a post-war government would do too little – and these too found expression in nightmares about the far right. There was widespread cynicism about whether the Beveridge Report would ever be enacted. The Labour MP who commissioned it warned that failing to plan post-war reconstruction risked “bitter disillusionment”, and potentially “a new fascism in our own midst”. A 1943 novella about the coming post-war Britain, The 1946 MS, imagined a general and his newly demobbed troops driven to instigate a coup by their contempt for politicians, moneymen and civil servants. In 1944, Mass Observation picked up “a widespread feeling that the necessities of crisis would pave the way for fascism”. In 1945, The People worried about “browned-off-warriors – lauded to the skies in war, unprovided for in peace, disillusioned, cynical, angry – marching again at home this time, say on London?”

Nigel Farage is no fascist. But his return to front-line politics should offer Labour a sharp reminder of the stakes as it enters power, with a wide yet shallow majority, and public trust more corroded than it ever was in 1945. Now as then, moving too slowly, and the disillusionment it risks, is at least as much of a gamble as moving too fast. If, as many fear, the growth strategy does not generate enough tax fast enough, and too many services remain broken as the next election nears, Labour will start to get the blame.

There are signs that its leaders grasp the stakes: that voters’ mix of desperation and despair is politically explosive. If the Conservatives lose the Red Wall, it will be in part because they promised to level up and to control immigration, and they blew it. Starmer lambasts this as showing “contempt for democracy”. Likewise, Reeves has warned that when people lose hope of “a better life” through decent jobs, it “risks fanning the flames of populism”. They know Labour must not blow it too. So they may face a choice: do they fully break from the restraints of post-1979 orthodoxy, tell the wealthy they must contribute more – at least while we wait for growth – and use the money to prove to a cynical public that politics can make life better? Or do they risk letting a future election trigger yet more apocalyptic poetry, as the populist right, its hour come round at last, gets its second coming? Because in that case, the poetry writes itself: a shape with Tory body and head of Farage slouches towards Westminster to be born.

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