Monday, January 29, 2024

UK

Opinion

Thinking small may get Labour into No 10. 
It could also stop it from staying there

John Harris
Sun, 28 January 2024 

Photograph: Stefan Rousseau/PA

In about 10 days’ time, we are told, the deadline will fall on policy submissions for Labour’s draft manifesto. Reports over the weekend have highlighted senior party people insisting that a May election is still a big possibility, and fretting about a contest that could be called as early as 16 March. And besides, Keir Starmer’s accelerated timetable suits his marketing as the kind of leader keen on preparedness, prudence, and technocratic efficiency.

At which point, an inevitable warning: the content of Labour’s plan for government, in all likelihood, is not going to be terribly spectacular. To no one’s surprise, Starmer’s advisers have been briefing journalists that “financial discipline will run through the document”. Proposals that have come out of Labour’s policy forums will seemingly be ruled in or out depending on whether they can stand up to Tory attacks. The only extra taxes in play – on non-doms, private schools and private equity “dealmakers” – will raise less than £10bn a year, which also puts a lid on any big policy ambitions. To cap it all, after months of briefings about its possible demise, the party’s plan to spend £28bn a year on green investment may well be even further diluted and delayed.

The leadership’s deep conviction is that this approach is the only way they can win. As Jeremy Corbyn led his party to 2019’s near-death experience, they point out, far too many people saw Labour as reckless, profligate and in the grip of ideological mania, an impression that lingers. The coalition government of 2010-15 also casts a long shadow: despite the wreckage left by the austerity that is still blitzing local services, a lot of voters need only to hear words such as “borrowing” and “deficit” to think that the sky is about to fall in. Liz Truss’s short time in office completes the picture: voters have a fear of politicians opening the way to national financial ruin, and those anxieties must be respected.


After four consecutive Labour defeats, these issues demand to be treated with a certain nuance, even by Starmer-sceptics: getting the British electorate to return centre-left governments is onerously hard, and all this has a ring of truth. But the result is a politics characterised by chronic smallness. As proof of his supposedly huge sense of purpose, the Labour leader habitually points to his “missions” – among other things, to “get Britain building” and “break down barriers to opportunity” – but what sits under them often looks either equally vague or comparatively tiny. In the past few weeks, shadow ministers have made a lot of noise about such policy minutiae as supervised tooth-brushing for kids, and a new register for children who are absent from school. On a bad day, it looks as if Labour has decided to offer as little as possible in the hope that the Tories find nothing to attack, and even the most timid swing voters then help Starmer to victory.

Such caution has started to lead in a dismaying direction. Once, all the party’s big figures would have self-identified as economic Keynesians, well aware that in difficult times, investment led by the state is the one dependable way of getting things moving. Now, Rachel Reeves, the shadow chancellor, seems to be drifting deep into the most tight-fisted kind of supply-side economics – which means, for example, that the key to solving the housing crisis is a mere relaxation of planning laws. Nothing of any substance can be done, it seems, until the animal spirits of the private economy are revived – and even borrowing to invest has to be subject to specious fiscal rules, which is a strange position for a party of the centre-left to be in. Last week, there were reports that if Jeremy Hunt cuts taxes in the forthcoming budget, the effects on the state’s fabled fiscal headroom will be so dire that the green investment plan will in effect bite the dust. If sinking Tory chancellors end up dictating Labour policy, something will surely have gone very wrong indeed.

Here, then, is the Starmer’s project’s defining tension. As far as he and his people seem to see it, smallness is Labour’s most dependable way not only of winning, but then sustaining the public’s trust: the programme initially followed by Tony Blair and Gordon Brown, which included sticking to Tory spending projections for the first two years, is often cited as the proof. But that comparison does not really work. Will there soon be an equivalent of New Labour’s great rush of initial change: the minimum wage, Scottish and Welsh devolution, Bank of England independence and Sure Start, all either rolled out or launched in the Blair government’s first two years? It does not look like it.

We are, moreover, a long way from the 1990s’ easy optimism and favourable economic conditions. The defining features of British life in 2024 are bound up with an overwhelming sense of shabbiness and decline: cancelled trains, aborted infrastructure projects, bankrupt councils, potholed roads, rivers full of sewage. And however much it tries to dial down public expectations and insist that change will have to wait until a second or third term, a Starmer administration will be judged – probably fairly quickly – on whether it makes any material difference to all that.

Related: The Trump revival will force Starmer to acknowledge the sheer folly of Brexit | Rafael Behr

From day one, an incoming Labour government will also be faced with a barrage of hostile rightwing noise, from a coalition of forces – the Mail and Telegraph, GB News, whichever political organisation Nigel Farage may have decided to lead – that could well have finalised its takeover of the Conservative party. The arrival of every so-called small boat will be held up as evidence not just of failure, but rampant government wokery; every Labour slip-up and mishap will be hailed as a terminal disaster. The new political right, let us not forget, tends to trade not just on prejudice, but the understandable resentments of people and places that fundamentally feel ignored. If you want to draw their sting, the only way to do so is by starting to convincingly mend what has been broken. Put another way, you cannot build any sort of good society – let alone support for it – when you are still surrounded by rubble.

Not that anyone seems to be listening, but there are credible economic voices making the case for large-scale, debt-financed public investment; they point out that it would actually have the opposite effect to the financial ruin Reeves and Starmer now seem to fear, firing exactly the growth – and tax receipts – they want. There are also serious Labour figures advocating the kind of big fiscal changes – such as a wealth tax – that might loosen the party’s self-imposed straitjacket. These things highlight a fear that ought to be nagging at Labour people, whatever the party’s huge poll leads and rising hopes: that even if political smallness initially gets Starmer and his allies over the line, it could sooner or later be their undoing.

John Harris is a Guardian columnist


Labour’s £28bn green investment pledge remains ‘level of ambition’ – Reynolds

Harry Stedman, PA
Sun, 28 January 2024



Labour remains committed to invest £28 billion a year in green projects as its “level of ambition”, the shadow business secretary has said.

Jonathan Reynolds conceded the investment may not be seen until the latter part of the next parliament and that “circumstances do change”.

Under its green prosperity plan announced in 2021, Labour had promised to invest £28 billion a year until 2030 in green projects if it came to power.


However, party leader Sir Keir Starmer previously hinted he could scale down the investment given the financial picture he would inherit if he becomes prime minister while the party was forced to deny allegations it had axed the pledge last week.

Asked whether Labour would spend £28 billion a year or not if in power, Mr Reynolds told Sky News on Sunday: “How much you can spend is determined by the health of the economy, which is clearly in a challenging position, and our own fiscal rules, which want to see debt fall by the end of a parliament.

“So, we’re still committed to that level of ambition but we’re clear it is the fiscal rules that determine whether you can do that, and that is not because we’re limiting our ambition in that space – it’s a recognition if you don’t have that discipline, you end up with the kind of disaster we saw with Liz Truss where you’re spending more money, but it’s only that interest, rather than the investments, that you want to make.”

Mr Reynolds said news earlier this week of up to 2,500 job losses at the Port Talbot steelworks showed the current Government “still spend a lot of money, but they’ll do it to make thousands of people redundant”, and that the next government will have to cope with “the worst inheritance ever”.

He labelled Chancellor Jeremy Hunt’s discussion of further tax cuts in the coming months as “a scorched earth policy”.

Asked on Sunday with Laura Kuenssberg whether Sir Keir was prone to showing uncertainty on his party’s policies, Mr Reynolds said: “I think we’ve got some very clear positions. I think circumstances do change, and particularly the health of the public finances, the cost of borrowing, that did change remarkably in the last few years.

“You’ve got no choice in opposition but to reflect on that and therefore put your programme forward, because, again, people don’t want promises that won’t be delivered.”

Aside from policies, he said voters should consider Sir Keir’s transformation of the Labour Party in recent years as a reason to put their confidence on him as a future prime minister.

He said: “Look at where the Labour Party was in 2019 – I mean, literally, in an absolutely terrible state.

“I don’t think most people believed one party leader in one term of parliament could bring Labour back from that to being competitive at the next election.

“Now he has done that and the courage, the resolve, the resilience, he’s had to show to do that tells you about the kind of prime minister he could be and would be if he’s given that choice.”


Opinion

Voices: Keir Starmer is about to make up his mind about Labour’s £28bn albatross – its green manifesto

John Rentoul
INDEPENDENT UK
Sat, 27 January 2024

Everyone has taken sides now, which makes Starmer’s decision more complicated 
(PA Wire)

Rishi Sunak was sharper at the most recent Prime Minister’s Questions than at the previous two. He fought back against Keir Starmer’s ridicule by mocking the leader of the opposition’s inability to decide whether he was committed to £28bn a year of green investment some day.

The prime minister referred to an anonymous briefing from someone close to Starmer who described the figure as “an albatross” around the party’s neck, and said: “That might have been the shadow chancellor.”

That was an accurate sally because although Rachel Reeves might not have briefed The Sun personally, she would like to get rid of the £28bn figure. There are now almost daily news stories either saying Labour is about to ditch it, or that Labour denies that a decision to ditch it has already been taken.


Patrick Maguire of The Times, who is writing a book about Labour’s not-so-long march to (presumed) election victory, reported that at Tuesday’s shadow cabinet meeting, “there were complaints by Emily Thornberry and Louise Haigh that this background hum of speculation is taking its toll on policy making and planning”.

Everyone has taken sides now, which makes Starmer’s decision more complicated. Ed Miliband, the shadow energy secretary, has fought tenaciously to keep the figure, which would provide him with powerful leverage in government. He is said to have “gone bananas” over the “albatross” briefing.

Another Labour person told me that the £28bn was such an albatross that it had “dragged the party down to a 20-point lead”. I am afraid I corrected them, saying that the average of the latest six polls shows a 21-point Labour lead.

Even Sue Gray, Starmer’s suddenly influential chief of staff, is reported by Maguire to be “resisting any decision that leaves Starmer vulnerable to accusations of folding under Tory pressure”.

Too late for that. If the figure is a bad idea (and it is), it needs to go. It is true that it hasn’t done Labour much harm so far but the reason that Isaac Levido, the Tory election chief, has persuaded Sunak to go for it is that it could be a problem for Labour when it comes under the intense scrutiny of an actual election campaign.

That is why I think Starmer has already decided to ditch it. He is serious about “no complacency”, about fighting for every vote as if the party is five points behind, and about reassurance. And that is why the £28bn figure is already a zombie number, left over from the days of zero real interest rates when government borrowing was an easy option. Since Reeves made the £28bn figure subject to her fiscal rules, specifically the one that has debt falling by the end of a parliament, it was already dead.

Yet it survives as a half-life, somewhere between an aspiration and a weapon to be deployed by Miliband in negotiations with the Treasury. But also as a weapon to be deployed by the Tories against Labour.

So Starmer needs to disown it. As Ed Balls, the former shadow chancellor, put it in his podcast on Thursday: “You need something which looks like a U-turn. And I think that that’s what they’re going to end up doing. They’ve tried partial U-turns. It hasn’t worked. They need a big U-turn.”

We can already predict what form the U-turn will take. Reeves will probably give an interview to the Today programme in advance of a speech to economists and green think tanks in which she will say that Labour needs to focus on what it wants to achieve instead of on an arbitrary number. She may talk about the plan to decarbonise UK electricity generation by 2030, and the drive to save energy by improving the insulation of millions of homes. She may even put a (small) price on the first-year costs of these policies, to be paid for out of the closure of specified tax “loopholes”.

And we can guess when she might do it. Although The Sun speculated that the albatross would be lifted from Labour’s neck after the Budget on 6 March, it would make sense to do it before. Starmer, who as leader of the opposition will respond to Jeremy Hunt’s Budget speech, will not want to go into the Commons chamber with a dead bird still weighing him down.

He has already set an internal deadline of 8 February for shadow ministers to finalise their manifesto plans, so that they are ready to enter confidential discussions with civil servants about them. We can therefore expect Reeves (and Miliband) to set out Labour’s shiny new green objectives, without the £28bn number, in the next 10 days or so.

It will look as if Labour has given in to Tory pressure. On the other hand, it will leave the Tories with even less ammunition for the election battle. Richard Holden, the Tory chair, cut the ground from under his own feet yesterday when he said: “For as long as Labour continue to commit to their £28bn of spending without a plan to pay for it, the British people should expect Labour to raise their taxes.”

In other words, the moment Labour ditches the £28bn figure, the British people should be reassured that a Labour government would not raise their taxes.

That will lead neatly to the argument between the parties about tax cuts in the Budget – and the further tax cuts promised by Holden in a pre-election mini-Budget in the autumn. This is firmer ground for Labour. Starmer, in his reply to the Budget, and Reeves in her reply to the mini-Budget later, will not promise to reverse Tory tax cuts.

This will be awkward because everyone knows that they would rather deploy any spare cash on public services (and on the “green transition”). That is what the voters want too. A YouGov poll this month found that 62 per cent of voters want the government to spend more on public services, “even if it means not cutting taxes”, and only 22 per cent want to cut taxes, “even if it means spending less on public services”. But Starmer and Reeves will recite “highest tax burden for 70 years” and move on.

They can then fight the election on the unspoken but true assumption that a Labour government would prioritise public spending over tax cuts, knowing that it is what the majority of the voters want.




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