Labour needs to find its purpose

For all the talk of missions, we don’t yet know what this government is really about.

The party conference after a landslide general election victory should be a joyous affair. Not that I ever had that experience myself, but in 2010 my party was back in government after 13 years, albeit in coalition. The election result had fallen short of expectations but that was behind us. There was a sense that ours was the conference that mattered, where proper announcements would be made of policies that would be actually implemented. The activists could celebrate victory, the ministers could celebrate power.

In contrast, Labour’s conference in Liverpool after a resounding general election victory is less of a celebration than it might be. Most governing parties get a honeymoon period in which their poll rating, and that of their leader, goes up. Voters want to associate themselves with the winners and grant them the benefit of the doubt. This has not happened for Labour and Keir Starmer.

Matters have not been helped by internal rows and a readiness by some to brief the press about them. Nor has the handling of gifts been politically sure-footed, especially given the public’s revulsion over Boris Johnson’s Downing Street and Starmer’s success in exploiting that. But to some extent, this was always going to be a difficult time.

The electorate wanted the Tories to lose much more than they wanted Labour to win. Labour’s share of the vote was, to put it mildly, underwhelming at 34 per cent. One could argue that this was suppressed by Labour supporters voting tactically for the Liberal Democrats where necessary or staying at home or supporting fringe parties (given Labour’s commanding poll lead). But, if that were the case, one would have expected a post-election poll bounce which evidently has not happened. For a government with a crushing majority, it turned out to enjoy remarkably little political goodwill.

Labour’s next challenge is that it genuinely did inherit a mess. One can be sceptical about the “£22bn black hole” in this year’s finances but the government was never going to be able to stick to Jeremy Hunt’s spending plans for next year and beyond. Public services are going to require higher spending but Labour boxed itself in on taxes. The left argues that there is an easy answer of introducing a wealth tax, but that is illusory. If Labour wants to raise serious sums of money, a broad-based tax on income or expenditure is likely. Somehow, Rachel Reeves is going to have to make the sums add up in a Budget on 30 October that is unlikely to be a crowd-pleaser. A big increase in employers’ National Insurance Contributions looks to be her least-worst option.

An austerity Budget is all the more difficult for Labour given that it has spent the last 14 years criticising the 2010 fiscal strategy of George Osborne. Some of us are quite content with a Labour government implicitly acknowledging the case for fiscal caution, but it clearly rankles with many in the party.

The current government also lacks a clear and coherent narrative as to why the country is in a mess and how to get us out of it. Osborne argued that Labour had spent more than we could afford, that the state had to be made smaller to be sustainable, and that a smaller state would be more enterprising and dynamic. Labour, in contrast, appears to be saying that the Tories spent too little for sustainable public services and too much for sustainable public finances while also arguing that the state needs to be both more powerful and cut. They may have a point, but it is not clear how this hangs together.

For all the talk of missions, there is not yet a sense of what this government is really about. It is not the Conservative Party and Starmer is a serious figure, unlike Boris Johnson or Liz Truss. He has not looked out of place on the international stage but his domestic agenda still feels unformed.

There was a reticence to go too far in developing policy when in opposition. Anyone who has experienced government (as Starmer has done as director of public prosecutions) will understand this. Making policy in opposition is a haphazard task in which one has a fraction of the resources available to an incumbent government. Now that Labour is in office, it needs to start setting out the details in a way which is coherent.

In 2029, Labour will be judged by the progress it has made on improving public services. This will require a strong economy to fund them and reform to improve productivity. In that sense, Starmer is right to argue that he needs to make unpopular decisions but needs to be more explicit about why these are necessary and, in particular, how they will lead to a transformation. As much as possible, public spending needs to be focused on reducing demand on public services (the preventative state) or improving their productivity, such as investing in technology. But to do this, less will have to be spent to support short-term consumption. In this context, cutting winter fuel payments is justified.

Admittedly, this is not a strategy for immediate popularity. But a sense of direction and a convincing articulation of how short-term sacrifice will bring its rewards is necessary. If Starmer can succeed in doing that in his conference speech, his party will leave Liverpool not necessarily joyous but at least with a sense of purpose.