7 September 2022

What Liz Truss means for Labour

The new prime minister is not the gift to Keir Starmer that many on the left think.

So, and this may not happen often, we can begin with some qualified good news. Liz Truss, a self-proclaimed free-market radical and scourge of Keir Starmer’s Labour Party, is reportedly adopting the policy of an energy price freeze. Similar to when her defeated rival, Rishi Sunak, swiped Labour’s policy for a windfall tax, great creative effort may go into disguising this move to save political face. But if you swipe a bicycle, sticking on a different saddle and spray-painting it baby blue doesn’t make it yours.

Still, this is good news for desperate households and businesses. As Starmer has been saying, a price freeze is urgently needed. This one will be hugely expensive. It will direct help towards some people who don’t need it. Absent of a further Labour-style windfall tax it guarantees big profits for energy companies. Industry executives who were recently told of the plan are said to have been “receptive”. I bet they are. The experts say it may affect supply and make shortages and blackouts more likely. But what else could be done quickly enough? This is an emergency.

After the winter, if the international gas price hasn’t fallen further, questions will be left hanging – particularly why taxpayers should long-term subsidise energy company shareholders. This will strengthen the argument for nationalisation. But if an energy freeze is the chosen policy, everybody in the country will exhale with relief. Going so immediately against her free-market instincts gives Truss a fighting chance of being politically heard as the new prime minister.

But heard for what? Her campaign is promising a major round of big policies and a more aggressive politics – in one of those tiresome military metaphors enjoyed in politics, it is a time of “shock and awe”.

This clearly includes her much prized tax cuts. Whether it’s corporation tax, which would benefit bigger companies, or the reversal of the recent National Insurance rise – which would give top rate taxpayers an extra £1,800 a year, and the lowest paid £7.66 a year – or even VAT cuts, when so many basic foods are already zero rated, these are defiantly regressive. This is going to sharpen the political debate: every time a minister is asked for more public spending and answers that there isn’t money available, many will point to the tax help being given to the better off.

To put it gently, this isn’t going to work. Then there is the mandate problem. Truss won the support of 57 per cent of the small Conservative Party electorate, and was backed – before she became prime minister – by around a third of the parliamentary party. The more she diverges from the political path forged by Boris Johnson – the last time there was a proper mandate was at the 2019 general election, where his promises included workers’ rights, levelling up and climate action – the bigger the legitimacy question looms. As she squares up to foreign leaders in Paris and in Washington DC (not to mention the foreign investors in the gilts market) the Prime Minister may be asked: but who, really, do you speak for? This is a problem for Truss and it’s a problem for the UK generally.

All that being said, the opposition parties must not underestimate this new prime minister. She does have poor communication skills, but she works harder, is more focused on delivery, is thicker-skinned and probably surrounded by a stronger cabinet than Johnson. She will run a tighter and less corrupt No 10 machine. Kwasi Kwarteng, predicted to be the new chancellor at the time of writing, is one of the brightest MPs in his intake. The sharp and pugnacious James Cleverly has what it takes to be a successful foreign secretary. Ben Wallace has been, overall, a success at defence.

There are, however, plenty of weak links in the chain and it was a mistake not to bring in the best MPs from rival leadership camps – the pool of available talent was never a particularly deep one – but there are some formidable players around her.

[See also: Liz Truss and the cost of winning]

If you look at the polls – particularly the ones contrasting Truss and Starmer on a range of leadership qualities – and you consider the leftwards shift in the country, you would think this is an interim final-stage Tory administration before the inevitable Labour victory. Would that it was quite so simple.

Let’s discuss a dirty secret. The centre left wins elections when middle-opinion, just-about-doing-all-right English voters choose Labour. These are in-work and retired people with something to lose. They are nervous of any breakdown in law and order. They are more urgently interested in community and stability than social equality. I am being unfairly reductive but all political parties recognise this vague but influential part of the national community. In the past they have been given patronising nicknames such as Mondeo Man and Worcester Woman. Today they might be called the people of Lidl Britain.

Whatever the tag, their instincts and language are excluded from the widescale rebellion spreading across leftish Britain now – from the campaign groups Don’t Pay UK and Enough is Enough, perhaps supported by many New Statesman readers but not necessarily, even in these scary times, by Lidl Britain.

Labour is (and always has been) divided as well. The far left is inclined to believe that an irresistible uprising is brewing and that the exciting opportunity must not be missed this time. Maximum militancy. Maximum disruption to daily life. Maximum demands. The middle left, by contrast, is poring over election data and seeks a reassuring message, particularly in hard times. The Labour leader of the day is supposed to keep one foot on the over-excited, lathered, galloping horse and the other on the plodding, nervy one, while somehow looking in control.

The very nature of this deep crisis, overseen by a radical right Conservative government, makes politics harder for Starmer. The Labour Party Conference in Liverpool, which begins on 25 September, is going to be dominated by applauded calls for the nationalisation of the utilities and banks, for a real wealth tax, and for full-throated party support for strikers. Part of the Truss political strategy will be to try to convince Lidl Britain that Starmer is coming after their assets and security. It will be hard for him not to lean more to the left given what is happening across the UK.

Tricky. Looking for his own point of gravity, Starmer should take lessons not from the media but from history. Nick Thomas- Symonds, the shadow secretary of state for international trade, has written an excellent new biography of Harold Wilson, which is crammed with messages for the current Labour leader. Wilson was a technically minded and a generally uncharismatic civil servant before entering politics; but he was also a quiet provincial with a strong sense of who he was – unpetulant, wily and strategic.

Wilson had to deal with an impatient left, with rebellious trade unionism and sneering socialist intellectuals convinced they understood Britain better than he did. His career was a balancing act, inching ahead from the 1964 victory to genuinely nation-transforming reforms. It was Wilson, we are reminded, who delivered the European settlement through the policies of 1975, which held for decades.

That was a different, pre-Thatcher world, of course, one where the state exercised more power over day-to-day life, where nationalisation covered great swathes of industry, and when Britain was still seen – though less and less every week – as a major victorious power.

Sadly, however, many of the problems Wilson wrestled with have returned, dressed in 21st-century clothing. The phrase “sterling crisis” is again being dusted down. The notion of “beer and sandwiches” negotiations with trade union leaders to avoid rolling strike action no longer looks ridiculous.

Wilson had principle. He knew why he was in politics and the direction he wanted to take the country – less dominated by class, more scientific and efficient, less reliant on the US. But to do that, he was an unapologetic, grafting compromiser, happy to wear down his opponents. He presented himself as defiantly ordinary, non-metropolitan. Lidl Britain would have recognised him.

There was a lot more to Harold Wilson, of course. He was one of the first prime ministers to actively promote female politicians. Today’s Labour could learn from that. In his book Thomas-Symonds presents him as a man with less political ego than many who enter No 10 – he was impressed by the intellectual ability of his cabinet and, similar to a famous Arsenal player at the time, was willing to dominate the political game from the back of the field, letting others score the goals and take the glory.

Perhaps the most important lesson is the way Wilson disguised his political radicalism under conventional, modest social conservatism. Does Starmer acknowledge the lessons from Labour’s 20th-century serial winner? Well, his endorsement is on the cover.

The transition from Johnson to Truss forced the country to waste a summer on internal Tory bickering when we needed leadership and decisive action; its legacy is an unresolved question about the authority of the new administration. The opposition can take absolutely nothing for granted.

Freezing energy bills is a good start, but we are in a complex economic crisis which runs from food prices and inflation to the weakness of the pound and menace in the bond markets. At worst, we could be seeing the beginning of the fracturing of the West’s unity against Vladimir Putin. It will be a long autumn.