What is Labour for? That was the question that confronted the party following an uneasy start in government. After his first conference as Prime Minister, Keir Starmer can claim to have gone some way to answering it.
As Andrew Marr writes on page 14, the PM’s conference speech was that of a serious leader prepared to level with the country about the choices it faces. “I will always treat you with the respect of candour, not the distraction of bluster,” Mr Starmer declared. As proof of this, he warned that taxes would rise, that new prisons would be built and that local objections to housing and energy projects would be overruled.
These hard-headed policy choices were combined with a striking political argument: that Labour is the party of “taking back control”. Mr Starmer hailed the launch of the publicly owned GB Energy (which will be headquartered in Aberdeen), the radical extension of workers’ rights and the planned renationalisation of the railways. But he also extended this argument to less familiar Labour territory.
It was no surprise that the Conservatives failed to control immigration, he said, because they are “the party of the uncontrolled market”. This is true: mass migration was not a bug but a feature of the Tories’ economic model. For decades, successive governments relied on high immigration to disguise the structural weaknesses of the British economy: a lack of training and public investment. The long-neglected social care system was typical: 143,990 health and care workers’ visas were granted in the year to September 2023 to compensate for labour shortages.
Mr Starmer called time on this approach. He cited the absurdity of the number of people beginning apprenticeships falling at the same time as visa applications for the same skills rise. The immigration debate is not about people, he suggested, but markets.
This was a welcome attempt to detoxify a fraught policy area. While vowing to control immigration, Mr Starmer rightly eviscerated those who demonise immigrants and asylum seekers. “It’s what you cannot stand about our country – our reasonable, tolerant country – but it is absolutely who we are,” he stated.
The Prime Minister’s speech was well received by a party still joyous at having returned to government. Yet it could not help but feel provisional: the true test of Labour will be the Budget on 30 October. Mr Starmer promised that there would be “no return to Tory austerity” and that the cost of deficit reduction would be “shared fairly” – code for tax rises on wealthier voters. Labour is exploring options such as raising capital gains tax, reforming inheritance tax and cutting pension tax relief.
But its narrative of tough-but-fair choices jars with its decision to means-test winter fuel payments. It is not only affluent pensioners who will be hit but those with incomes as low as £11,300 a year. Mr Starmer defended the measure but, as we have previously argued, Labour should use the Budget to offer greater protection to the vulnerable (around 71 per cent of pensioners with a disability and 83 per cent of the over-eighties will lose the benefit).
Higher growth was cited throughout Labour’s conference as the government’s defining mission. Yet since the general election we have heard little about how it will be achieved. The emphasis has instead been on the “£22bn black hole” inherited from the Conservatives. That changed with Rachel Reeves’ conference speech – which may prove to have been the most significant.
The Chancellor used her address to argue that the Treasury must move on “from just counting the costs of investments, to recognising the benefits too”. Her fiscal rules may now be revised to allow for higher capital spending – an essential policy choice. Based on current plans, public investment is projected to fall from 2.4 per cent of GDP in 2024-25 to just 1.7 per cent in 2028-29. As economists such as Dani Rodrik, one of the influences behind Ms Reeves’s “securonomics”, have argued, the UK should aim for a figure closer to 3 per cent.
Labour still needs to do far more to win the confidence of a restive public. The fall in approval of the government – intensified by accusations of cronyism – has been swift and brutal. But Mr Starmer and Ms Reeves have shown a route to both political and economic recovery.
[See also: What’s the story?]
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This article appears in the 25 Sep 2024 issue of the New Statesman, All-out war