Showing Ambition

Keir Starmer’s political stances have been significantly shaped by the context of his political career so far. As the Labour spokesperson during Brexit, Starmer adapted to a rapidly changing – and polarising – context, ultimately emerging as a voice for Remain. During the leadership contest following Jeremy Corbyn’s exit, Starmer embraced the Labour politics of the moment: keeping it ‘radical’ but adopting a different political style. Since then, the context for the leader of the opposition has shifted continuously. A global pandemic meant a different leadership model for Starmer. A ‘1945 moment’ was posited, briefly, by Starmer, but ‘rebuilding’ after Covid has since faded. Boris Johnson’s populism saw the Labour leader stress his reputation for being more statesperson-like. ‘Seriousness’ became the new ‘radical’. Where are we now? In the face of the Tory tumult of recent months, Starmer has been clearer. His Labour party conference speech showed a broadly social democratic reaction to Liz Truss’s short-lived political programme, and the Conservative tax cut for the highest earners, since abandoned, reintroduced more radical rhetoric: these were “tax cuts for the richest 1 per cent in our society. Don’t forget. Don’t forgive”.

Yet the other line Starmer introduced, and has repeated since, is that economic chaos ‘means not being able to do things – good Labour things – as quickly as we might like’. This incrementalism has some negatives. While decrying the Truss plan, Labour backed one of the larger tax cuts (to national insurance contributions) and the smaller cut to the basic rate (which was abandoned). Was Labour unable to do ‘good Labour things’ because, while it didn’t approve of tax cuts for the richest, it did approve of cutting tax more generally?

Now Truss is no longer prime minister, and Rishi Sunak is – at least for the time being. Starmer will react to Sunak too, calibrating a Labour message at a time of ‘difficult decisions’, and public services, across the board, feeling squeezed and underfunded. Alongside ‘seriousness’ – which both leaders will seek to own – there are big political choices and arguments to be made: choices about tax, about public spending, and about Britain’s economic and social future. Politics is always ideological, and in this period profoundly so. What should Labour’s offer be?

I am not fond of the rhetorical device that Labour won’t be able to do ‘good Labour things’ within a timescale it thought previously reasonable. I understand the politics, of course – it is a signal to counter perceptions that Labour spends too much money, and suggests that it is therefore willing to sacrifice some of its ambition. Yet, to reflect on the relationship between socialism and priorities – inspired by Nye Bevan’s famous rhetoric – prioritisation shouldn’t mean ditching your priorities, nor doing middling or average Labour things. It means making political decisions on the basis of your priorities. That requires comprehension of the wider political and ideological context.

The Conservative party is on the back foot, down in the polls and seeking the benefit of the doubt from the public. Ideologically, they are deeply divided. Not since the early 2000s – when Labour consistently attacked them for wanting to cut services – has the Conservative party been so uncertain about what it is for. This is an opportunity for Labour to really affect the political agenda again; to push for a more social democratic direction at a time of Conservative defensiveness and uncertainty. To do this means being very clear what the big ideological choices are, and to offer policy positions which embody the right choices. To pick some of the most important ones: if we want better public services, they need to be better funded through fairer taxation; to curb emissions and switch to renewable energy means big public investment; to grow the economy means an economic environment conducive to what the British economy does well, while planning for the longer term. Laying the ground for ‘good Labour things’ has the short-term benefit of affecting the agenda before the general election. It also has a longer-term benefit, where a Labour party – sure of what it wants, and why – can boost its chances of delivering change and seeing more than one term in office.

Tax and public services

From around 2008 to 2016, ‘austerity’ appeared to be the most powerful idea in British politics – not universally popular, of course, but a powerful political argument. As the academic Liam Stanley has pointed out, the Conservative party argued for austerity with a ‘moral’ element: that debt was wrong, and the political priority of the moment was to pay it back. In Sunak’s first speech as prime minister, in Downing Street, similar language was employed. “The government I lead will not leave the next generation, your children and grandchildren,” Sunak said, “with a debt to settle that we were too weak to pay ourselves.” Since the implosion of the Truss government, ‘austerity’ has returned as a topic of discussion. A gloomy economic outlook will mean everyone ‘tightening their belts’; other similar stock phrases will no doubt reappear. Labour’s response to this will, understandably, be informed by experience as well as (hopefully) current evidence, such as public attitudes to government spending – which, according to the British Social Attitudes survey, show majority support for higher taxes and more spending. The Conservatives attempting a return to a ‘proven’ script before the next election (after which spending reductions are planned), which seemed to be so effective in the last decade, will naturally lead to some concerns for Labour – but more importantly, there is a danger the Labour party places ideological constraints on itself, without pushing back on the different political choices that can be made.

Foremost among those choices is taxation. Mervyn King, former governor of the Bank of England, is one figure among many arguing that it is not sustainable to want European levels of spending and services with US levels of taxation. And the current state of public services – including the impact of the pandemic – adds a short-term, urgent dimension to that longer term argument. At the time of writing, the British Medical Association’s analysis of the NHS backlog is sobering. There are more than 7 million people on the waiting list. The number of people with A&E waits of over 12 hours is at a high. The targets for treating cancer, including GP referrals and treatment, are being missed. Prior to this year’s autumn statement, headteachers were talking about nightmarish squeezed budgets at a time when they want to do much more for children suffering both from the cost-of-living crisis and the aftereffects of the pandemic on their education. As well as the ‘reform’ politicians – rightly – want to discuss, public services need sustainable funding to improve and strengthen what they offer to people.

So where is that money to come from? It feels, politically, like a long time ago now, but as recently as April 2021 the International Monetary Fund was calling for increased taxation on wealth to help fund the recovery from the pandemic. The rhetoric of ‘building back better’ has gone, in part because of Russia’s horrific invasion of Ukraine and the disruption caused to global energy markets, necessarily switching immediate political attention to other problems. Inequality – so starkly revealed during the pandemic – remains. As do the challenges of returning to the levels of public service people should be receiving, and working on ambitions for a healthier, more equal society. Reform of the tax system is essential policy for Labour, and I think there is an argument for a two-step process. The first is a one-off wealth tax to provide an immediate funding boost to the NHS and schools. Labour successfully made the case for a windfall tax on oil and gas producers to help fund a short-term energy support package. A similar case can be made for a one-off wealth tax, the design of which could take a number of forms.

This short-term, immediate measure should be followed by permanent reform of the tax system on the basis of consultation and evidence-gathering in office that would help fund the government’s day-to-day spending and reduce economic inequality. The shadow chancellor, Rachel Reeves, argued in her 2021 Labour conference speech that, when it comes to public services, “how we pay for them is a test of our values”. She talked about the tax paid on a public sector salary compared to the lower tax rate paid by ‘someone making many times more from buying and selling stocks and shares’ – in other words, the significance of taxing wealth. Reeves made a commitment to a fairer tax system, and an examination of every ‘tax break’. This was an important declaration in 2021, but it is even more important now. Labour has joined, once again, a debate about levels of public spending and how to pay for the things we all value.

The Conservatives, it seems, may seek to frame the choice as one of ‘strength’ and ‘weakness’, with the politics of refusing to cut public spending (alongside some tax increases) linked with the latter. There is no need for Labour to accept this framing. If the choice is between cutting public spending and bolder tax reform – with more tax coming from those who can afford it – then Labour’s choice should be the latter. The party is already moving in this direction, with changes to ‘non-dom’ rules and private school charitable status being used to bring more funding into the NHS and state schools respectively. After what people have experienced over recent years, and the challenges that are ahead, the choice is about right and wrong, both ethically, and for the economic and social strength of the country. It is not only about changing policy, but shifting the argument, potentially for a long period of time.

The climate emergency and Britain’s economic future

On green investment and Britain’s response to the climate emergency, Labour has made the bold and right choice. Its green new deal of £28bn a year in investment is the source of a number of innovative policies and ambitious targets, including 100 per cent clean energy by 2030. The plan is also connected to increasing private investment, creating jobs, and providing increased energy security. The climate emergency is so pressing that no political movement can really be too ambitious – Labour’s plan could, still, be bigger and better. But it shows the right priorities, has an effective spokesperson in Ed Miliband, and emphasises a significant policy difference with the Conservatives (at the time of writing, the prime minister had just u-turned over attending Cop27, the climate conference taking place in Egypt).

In addition to this essential change to Britain’s economy and infrastructure, Labour needs to be ready to create conditions that help, rather than hinder, the prospects for Britain’s economy. In its report for the 2022 Autumn Statement, the Office for Budget Responsibility reaffirmed its assessment of Brexit, with an assumption of ‘trade intensity being 15 per cent lower in the long run’ than if the UK had remained a member state, and adding that the evidence up to this point indicates that leaving the EU ‘has had a significant adverse impact on UK trade’. Brexit is, obviously, not the source of all of Britain’s economic problems. Yet nor, so far, is it in any sense a solution to them – indeed, it is a negative. Rachel Reeves has suggested that Labour can “fix the holes in the government’s patchwork Brexit deal”, offering examples like easier travel for those working in creative industries.

Starmer, reacting to Truss’s apparent abandonment of ‘levelling up’ rhetoric, suggested that ‘the Tories are changing the meaning of Brexit before your eyes’. It’s certainly true that alongside big tax cuts, Liz Truss and her supporters viewed changes to some EU-derived regulations as a thoroughly positive Brexit bonus, even though such changes seemed some distance from people’s everyday lives. Yet, it is increasingly clear that the ‘meaning’ of Brexit is broadly one that makes Britain’s economic reality tougher to manage, and not easier. That was predicted, and so it has come about. Labour cannot embrace its own version of the belief – a potent one within the Conservative Party – that Brexit cannot be flawed because of its symbolic role within contemporary party politics. A start would be to move further on ‘fixing the holes’, working from the day-to-day issues the British economy and British businesses are facing. But the illustrative examples that Labour can offer for changing the Brexit deal – e.g. the visa mentioned above – will only go so far as an election nears, particularly as the two parties compete on the terrain of growth. Bigger change requires manifesto detail and the mandate of a general election victory – and much bigger change is required.

An ambitious offer

There is a tempting political argument, in the current context, that says Labour needs to be very cautious. That Liz Truss tried bold, and her administration collapsed, with much former Tory support heading Labour’s way. The strategy, according to this approach, is clear: say you will be ambitious, but also say you won’t be able to do everything you want, keep the detail vague and focus on tactical victories. This is a recipe for 18 months of being critical of the Conservatives, while talking of ‘tough decisions’ and caution. This idea might be attractive, but I think it’s wrong for two reasons.

The first is that the Conservatives have not been in a weaker ideological position since the early 2000s. Since 2008, the Conservative party has set much of the agenda, even if – at times – it has been a chaotic one. That is not the case now. So now is the moment to make the argument for responsibly funding public services, challenging the inequalities of our society and focusing on the medium and long-term challenges for Britain’s economy and security. As economist Thomas Piketty argued, inequality always needs to be explained, because it is a political choice. Over a decade ago, the Conservatives justified austerity (and continued inequality) in part through blaming Labour’s record in office. This time, they can’t do that. What is their argument for – broadly – maintaining the UK’s current economic and social trajectory?

The second reason is the importance of using office to deliver quickly and maintain control of the agenda. If Labour wins the next general election, the only clear part of its economic programme is the green new deal investment. To have a mandate to transform the country and consolidate the party’s agenda requires more ambition in opposition, and a little less ambiguity on the big ideological decisions. Such a stance would set a path not just for the first couple of years, but for more than one term of a Labour government: one that knows what it wants to do and why it wants to do it. Clarity of thinking now will help a future Labour government maintain its focus during the inevitable trials of office by providing an overall project: fairer taxes to fund stronger public services and achieve a more equal society; green investment to create jobs and tackle the climate emergency; Brexit honesty to begin fixing the obvious flaws. All ‘good Labour things’.

Image credit: UK Parliament via Flickr