- Thu May 23, 2024 10:29 am
#68105
From today's New European . :
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What if Starmer is actually quite good?
There are good reasons to believe that Labour in power will be better and go further than you think
JAMES BALL
Photo: TNE/Getty
There is a longstanding tradition that whenever the Labour Party makes it into government, large swathes of its traditional base of support bitterly accuse it of betraying everything that the movement is supposed to stand for.
It is perhaps a sign of the times – whether through a lack of respect for tradition or just millennial impatience – that this time around, no one is bothering to wait for Labour to make it into government before throwing around these accusations.
Keir Starmer stands accused of being a red Tory, Labour in name only, or even being – to quote one irate Labour member – “the only man in the country who seems to think Rishi Sunak is doing a good job”. And as opinion polls show, it’s not just Labour voters who disagree with his softly-softly approach to closer ties with the EU.
There are good reasons for people to feel anxious about what seems like Labour’s limited ambitions. Public services are on their knees despite taxes being at an all-time high. Economic growth is stagnant, while across much of the country, housing is prohibitively expensive.
After 14 years of Conservatives in government, the appetite for real change goes far beyond the “hard left”, or the one-time Corbynite flank of Labour. Many people who might still plan to put a cross in the box for a Labour government are looking at Starmer and his team and wondering why they aren’t promising more.
The reality is that there are good reasons to believe Labour is having to keep its mouth shut on any ambitious plans in the hope of making them a reality – key figures in Labour, behind closed doors, credibly argue that the best chance of actually making change happen relies on not saying too much right now. The reason for this lies in the farcical way in which British politics plans its spending.
It is a reality of modern politics, given the UK’s high public sector debt and the broader political mood, that if a party is offering up a new policy it must suggest how it will be “paid for”. Governments don’t have to pay for things in the same way we do in our everyday lives – in theory, at least, they can borrow pretty much indefinitely, or even print new money.
Liz Truss showed that even for a large economy like Britain, that has limits. If you spend too much without a clear plan to cover the cost, borrowing rapidly gets much more expensive and the economy tanks.
In reality, even under Jeremy Corbyn, Labour did not try to dispute the modern political reality that policies must be costed – even if the costings of its manifestos were contested, to say the least.
That need for costings forces oppositions to play a game that is absolutely rigged against them: if you want to announce a policy that costs £10bn a year, you have to announce tax rises or spending cuts of a similar magnitude to balance it out.
On the face of it, that might seem fair enough – it’s more or less what the chancellor has to do at most budgets. Unless economic growth has been much better than expected (chance would be a fine thing), budgets are generally balanced so that the giveaways are matched with cuts or spending hikes elsewhere.
There is an inbuilt advantage to the government in all of this, though – which is that they’re in power now and can do things now, whereas the opposition is forced to wait and hope for the chance to make its plans real.
That means if the opposition wants to announce an ambitious policy, it not only has to work out how to pay for it, but it must also make that plan public. This leaves it with the option of identifying a popular way to raise tax or cut spending (and these are few and far between) or an unpopular one, such as raising VAT, income tax, or national insurance.
If it does the latter, the government will make sure that the public knows Labour wants to raise your taxes, in the hope that, at a time of a cost of living crisis, it will put off at least some potential Labour voters. But if Labour identifies a clever way to raise some revenue while it’s in opposition, the government can do something cleverer still – it can steal it and use the money itself.
Labour is left, then, trying to find ways it can credibly say it would raise some revenue that the government won’t attack or steal. The party thought it had found that in recent years when it pledged to essentially scrap non-dom status – raising several billion pounds a year, which had been put towards several of the relatively modest policies the party has set out to date.
The party had calculated that the Conservatives would not want to annoy their own donors or the political instincts of many of its MPs by endorsing this particular measure on tax – not least because of Rishi Sunak’s wife personally benefiting from non-dom status.
Jeremy Hunt, however, wrongfooted Labour by… largely stealing the policy, and using it to fund a cut in national insurance. In one move, he not only “spends” the money that Labour had been eyeing up, but also renders much of their policy offer “unfunded”. This is a trick that can be repeated by government indefinitely – for so long as they are in power, they can “spend” any money that the opposition tries to earmark, not that it has done them the slightest bit of good in the polls so far.
This is not a new problem in politics. It is notable that every opposition party that won an election in the last several decades has done so by refusing to play the game of announcing tax-and-spend policies while it is in opposition.
Under Tony Blair, New Labour pledged to stick to Tory spending plans for at least two years after winning an election – which came with the extra advantage of giving the new cabinet two years to get to grips with their briefs and work out exactly where to focus spending when the taps were opened in 1999. Blair’s Labour went on to generously fund most public services – giving the NHS the largest real-terms spending hikes in its history.
David Cameron and George Osborne repeated this trick in 2010 – at least until the global financial crisis hit, when their calculus changed, especially as they tried to blame Gordon Brown for a calamity largely outside his control. For most of their time in opposition, Cameron and Osborne pledged to match Labour spending plans for their first two years – though this was not what eventually transpired.
Any time you want an explanation as to why Labour won’t announce more funding for X or Y, this should be the first thing that jumps to mind: Labour knows that once it is in government, it can spend any money that it finds on whatever it wants. While it is in opposition, the government can strike first.
In other words, the best chance of actual and substantive change later comes from keeping quiet now. The difficulty for Labour is that after 14 years of the Conservatives being in power – especially after four years of Jeremy Corbyn – there is a chunk of the left that has all but lost belief that anything can change for the better. Some of Labour’s supporters care more about hearing the right things than daring to hope that silence might make those things a reality.
There are, of course, other reasons to be wary about the idea that Labour would be truly radical in government. The party is still proposing an overhaul and strengthening of workers’ rights, spearheaded by Angela Rayner, but those policies are now more modest than when they were first set out in 2021.
Critics notice that what was then a ban on zero-hours contracts is now a right to negotiate minimum hours based on the previous 12 weeks of work. Plans to create a single status of worker – abolishing the distinction between employees and self-employment – have been heavily rowed back.
But where some see a lack of ambition, others see realism: while some zero-hour contracts are exploitative, others think they can genuinely work well for all concerned (as shows up in surveys or focus group evidence with such workers).
Creating a single worker status would not necessarily be remotely welcomed by a fair chunk of those it would affect. Labour can argue that rather than watering its plans down reflexively, it has simply consulted more widely and developed the policy to see what can realistically be implemented. Such is the nature of government.
The right way to look at whatever makes the Labour manifesto, once it is more comprehensive than a six-point pledge card, is that it will represent the minimum of what the party feels able to promise, rather than the high water mark. The bizarre nature of UK politics means that the more Labour promises now, the more that helps the Conservatives.
Labour has announced some solid policies beyond the pledge card that are still official policy – even if they are generally not big-ticket spending items. Labour’s workers’ rights package is still a big expansion of employment protections, while the party is also offering planning reform to boost housing and growth.
Other policies include free breakfast clubs for primary schools, a nationally owned energy company, nationalising the rail operating companies and more – Labour is operating under heavy restrictions, but offering what it can in that framework. Politically, it’s working, judging by the polls – but it doesn’t mean it’s the limit of the party’s ambitions for government.
As for Europe, Starmer is promising closer cooperation on defence and security, but nobody seriously believes he will stop there. Not as the negative effects of Brexit become clearer and even its key proponents concede it has not delivered what they had hoped. Rejoining is off the table though (and whether on or off the record, Labour is clear that this is not about to change any tine soon).
Some who attack Starmer over all this should know better: they have either not bothered to learn about the trap facing every opposition party, or they are wilfully ignoring it to suit their invective. Most, though, have just never heard about it – because Labour can hardly point it out, either, without opening a flank to Conservative attacks about “Labour’s secret spending plans”.
Should Keir Starmer become prime minister, he will inevitably disappoint on some fronts: money is tight and there is little prospect of fixing every priority all at once. But it is much more effective to lobby a party once it is in government than beforehand – we do, perhaps, need to relearn the virtue of patience.
22 MAY 2024 12:00 AM
"The opportunity to serve our country: that is all we ask.” John Smith, May 11, 1994.
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