The left should try to shape Starmerism, not bury it

If radicals fail to make clear demands on Starmer, New Labour’s old guard will take advantage.

If the polls are correct, Labour is on course to win the next general election, which is now no more than two years away. The stakes are higher for the party than they have been for some time: not merely the prospect of returning to office, but the prospect, unlike in 1997, of having to do so in the face of deep economic crisis, geopolitical instability and the endless, bitter grind of climate change.

Keir Starmer’s New Year speech, in contrast to Rishi Sunak’s hastily written alternative, identified at least some of these bigger issues. But the tension between rising to the scale of the challenges, and the pull of the status quo, is only likely to become more acute as the UK’s plight worsens. This tension will define the next two years for Labour. If the broader left doesn’t apply its own pressure, the party will default back to a pure status quo politics – perhaps suitable for the late 1990s, but hopeless for the rougher world of today.

Britain is worst placed among the developed economies in the depth of its problems. The stagnation of living standards since 2008, the gross (and worsening) inequality between different regions of the country, the crumbling of infrastructure and the failure to invest: as Adam Tooze and others have argued, the scale of the dysfunction points to deeper, institutional failures than merely a decade of Tory rule.

Indeed, the Conservatives themselves, at various points, have identified systemic failures: Boris Johnson’s “levelling up”, or the ill-fated Truss/Kwarteng dash for growth at least made some attempt to address those maladies before imploding – in the case of Truss, as a direct result of institutional revenge by the Bank of England.

Sunak has nothing that comes close to Truss’s critique. His New Year peroration was a speech in two parts: the first identified a focus group-friendly list of immediate priorities which were handily either vague or easily achieved (“halve inflation”). The second was a cliché-riddled homily to the joys of innovation. Perhaps this Silicon Valley pap would have worked in 2005 but in 2023 it merely jars. The PM could barely explain why innovation matters, possibly because he believes no explanation is required. He hand-waved vaguely about its impact on economic growth – a meaningless metric for voters when set against surging food prices (up 13.3 per cent) or a collapsing NHS.

Starmer’s speech offered something more interesting – an explanation of Britain’s failings based not only on “Tory ideology” but on what he called the entire “Westminster system” that produces short-term, “sticking plaster politics”, by concentrating power in the hands of a small elite.

He also abandoned Labour’s own hand-waving about economic growth – the term barely featured – in favour of “national missions”. These will be released in full later this year, with the first an ambitious target to decarbonise Britain’s energy system by 2030. The idea of “economic missions” is closely associated with influential economist Mariana Mazzucato, who argues that governments must take the lead in setting the direction of national economies, establishing clear social and economic objectives and using their powers to spend and to intervene to support others in achieving them.

Mazzucato’s work enjoys supporters across the political spectrum – she advised the Conservative government when it temporarily favoured industrial strategy, and John McDonnell, serving on the latter’s Council of Economic Advisers during his time as shadow chancellor. The idea of a more active, “entrepreneurial state” (in Mazzucato’s phrase) is part of an emerging consensus in the post-2008, post-pandemic world.

Likewise, Starmer’s plan to set up a national wealth fund and, strikingly, a publicly owned renewable energy generator, GB Energy, reflect a shift in elite attitudes to state ownership. With the Conservatives, despite themselves, forced to nationalise energy suppliers, rail franchises and even a steel manufacturer, the long-standing taboo on public ownership is breaking. There is, as Michael Jacobs, a former adviser to Gordon Brown has suggested, a radical strand to Starmerism behind the determinedly anti-radical presentation.

But the worse the crisis, the more the presentation matters. As interest rates and inflation rise, the relatively benign macroeconomic conditions of the past decade have faded and with them the chance to avoid making enemies. Squaring promises to repair the NHS, or invest in green jobs, with Westminster-friendly rhetoric briefed to the press about Labour not “spending its way” out of the crisis is going to become increasingly difficult. It’s going to become harder to match promises to spend more per year on green investment (£28bn) than Jeremy Corbyn and McDonnell pledged without also embracing higher taxes or higher borrowing.

New Labour’s old guard have already scented weakness. Peter Mandelson has warned Keir Starmer that he must not turn into “another Greta Thunberg”. This seems, on balance, unlikely. However, in common with Ed Balls’s similarly absurd intervention last November, when the former shadow chancellor insisted that a worsening economic crisis meant Labour needed to do less rather than more, both point in the same direction: a defence of the status quo at precisely the moment when change is urgently needed. Unchallenged, they will win.

Yet the left has been strangely hesitant – unwilling to acknowledge its own previous success in forcing open questions on the economy, such as ownership and public spending, that had once appeared sealed shut. It has failed to hammer out policy demands that could turn Starmer’s GB Energy into a bridgehead for expanded public and collective ownership across the economy.

The core fight is over public spending. Starmer, and especially the shadow chancellor Rachel Reeves, have repeatedly voiced their opposition to accepting the Tories’ spending plans (as New Labour did for two years in government). But already the argument is being put, with the new Trades Union Congress general secretary Paul Nowak the latest to urge caution. But this isn’t the 1990s, when such a wheeze might just have worked. Labour’s grand plans for institutional reform and repairing public services will need additional spending from day one. It is down to the left to win the argument for this.

Starmerism isn’t a secret version of Corbynism and Starmer is not a closet left-winger. Starmerism’s default setting is managerial and its default mode of address is to the political centre. The project around his leadership could, at this point, easily snap into pure New Labour cosplay. Without a defence of the more radical elements of his programme, as they come under attack from the remnants of Blairism, a reversion to the Westminster status quo is virtually guaranteed. But more than this, in the face of a worsening crisis with a directionless government, there is an opportunity for the left to shape the programme and purpose of the next Labour administration.