24 July 2024

Labour’s stormy summer

Britain is poised between hope and fear as Keir Starmer surveys the challenges ahead.

“The best day in opposition is worse than any single day in government,” says a new minister. As the cabinet begins to relax and, in private, to celebrate, the mood remains almost defiantly upbeat. As this odd summer stretches ahead, there are menacing clouds on the horizon; but there are big patches of blue sky over the white cliffs too.

This is the perfect moment to sift better possibilities as well as the obvious, headline-grabbing dangers. It’s a delicate moment, with politics poised between hope and fear, in which we should try not to succumb to the easy journalistic default of premature pessimism, because Britain really needs a new start.

As experienced ministers find the “muscle memory” returning, and old rivalries from the 2010s are put aside, there is a sobriety and seriousness about the way the new team talks in private. There’s not much “wha-hey, we’re in power”. Everybody is proud of the scale of the parliamentary victory. But everybody is also acutely aware of its fragility.

Keir Starmer is determined that the turmoil of decision-taking doesn’t make his government forget the political realities beyond Westminster. Five days a week there will be 9am “no complacency” meetings of ministers and advisers on the underlying politics, held immediately after the Prime Minister’s opening 8.30 meeting. Chaired by Pat McFadden, effectively the cabinet minister for party politics, they include Morgan McSweeney, who ran the campaign and who remains central – not quite as close to Starmer’s sanctum, perhaps, as his chief of staff and gatekeeper, Sue Gray, but just along the corridor.

In politics, proximity matters – and not just geographically. The person with the hardest decisions today is the Chancellor, Rachel Reeves, who like Starmer seems much more relaxed in the job than she was in opposition; “Just made for it,” says one insider. Her new parliamentary private secretary is the new MP for Hamilton and Clyde Valley, Imogen Walker, who is also McSweeney’s wife and said by the Treasury to be the only person in Britain more on-message than Reeves herself.

None of which means the reports, briefed to hostile newspapers, of a bitter rivalry between McSweeney and Gray are true. The two have distinct tasks and respect one another. At the same time, there is a determination not to vanish into Whitehall groupthink and forget about suspicious voters. Not politics first; but politics too.

Among the thunderclouds heading towards Westminster, the most imminent are economic; the pressures of public sector pay and the two-child benefit cap. Pay will be tough because the Treasury needs to find up to £8bn more to pay teachers and nurses. That can be done, particularly if Reeves moves early on capital gains and inheritance taxes. Strikes in the NHS would derail the new government immediately and be a serious risk for the unions. But she and Starmer are going to have to make the argument that settling pay is more important than welfare.

Tougher still: the row over the two-child cap, which is not simply a left-wing revolt. One minister tells me: “We all hate it. Every minister hates it. Everybody from Gordon Brown to the Archbishop of Canterbury hates it. I think Rachel hates it.”

But handling this will be the first test of the Starmer-Reeves “patience, please” strategy. The new inquiry into child poverty, looking at welfare, low pay, housing, education and mental health, has to work fast. On the cap, one minister close to Starmer says: “We will end up getting rid of it at some point… reducing poverty is in all our DNA.” His message is: “Give us time; we will get there.”

“Give us time” is the wider plea across many policy areas, while studies, commissions and enquiries proliferate like rabbits across Labour’s Whitehall. But a frustrated nation will not give Labour patience until the government is able to show early progress in some areas: solving the doctors’ dispute, kickstarting housebuilding and, crucially, winning arguments on tough subjects. Evidence of real change and outspoken political courage are the two essential preconditions of winning voters’ permission for a slower, steady-as-she-goes advance across the board.

This is what Starmer, Keeper of the Ming Vase, signalled in his two speeches immediately after the election victory, when he warned against quick answers and said that difficult decisions would take time. This was, he promised, the end of a “politics of performance” and the start of a “politics of service”.By this he means that life has become serious: we cannot rebuild a genuine sense of hope in Britain on the foundation of short-term boosterism, followed by inevitable disappointment.

But ending the politics of performance means levelling with people more openly about hard choices. Remember Nye Bevan: “The language of priorities is the religion of socialism.” In this case, settling NHS and educational pay disputes to avoid strikes is clearly part of the Reeves growth strategy – it’s at the heart of “first steps”, and the missions. Spending the same money to intervene early on child poverty is less so. Now, that is a horrible thing to say. But, if this is not what the hard choices of “mission government” means, what it does mean? It seems the dire but unavoidable consequence of the tax straitjacket Reeves and Starmer voluntarily belted themselves into during the election campaign.

There are many more examples to come. But the next big political fight will be, I think, over the green industrial strategy. The case being made against it on the right, is that it is over-ambitious, that it’s in “my back yard” and will mean higher energy bills for ordinary families and industry, at a time when the United States and China are both sending up such a quantity of greenhouse gases, and sending us manufactured goods built with cheaper energy, that what piddling Little Britain does is irrelevant.

This position is not exclusive to the right. In a closely argued article in last week’s New Statesman, Helen Thompson wrote that even if Labour can decarbonise electricity by 2030 and thereby reduce bills, “this would still leave around 80 per cent of British energy consumption exposed to another inflationary shock”.

As solar farms, and then networks of new pylons, get the go-ahead, these are the arguments that will be relentlessly weaponised and which the new government simply can’t avoid: again, Starmer, Reeves and Ed Miliband – they are closely aligned on this – have to return to the basics of the existential threat caused by global warming, answer their critics on the practicalities of energy security, and ask: what would you do?

These are the kinds of issues that will surely dominate discussions at the daily political strategy meetings. Next will be arguments about migration, both illegal and legal. As the Home Secretary, Yvette Cooper, struggles to stop migrants crossing the Channel, I predict this will end up with a change in policy and support for ID cards as a precondition for access to work and public services.

Enough of the clouds, already. On the international stage, by common consent, Starmer has already done very well. Although there was scepticism about whether a more genial tone towards the EU could produce a warm response, the first signs are good. Immediately after the European Political Community summit on 18 July, Josep Borrell, the EU lead on foreign affairs, welcomed the reset and spoke of “a deeper and more structured cooperation with the EU in the field of foreign, security and defence policies”.

The new EU relations minister, Nick Thomas-Symonds – who is not in the cabinet, but remains close to Starmer – has called for a “structured dialogue”, including a UK-EU leaders’ summit. Labour, after its election promises, can give little on free movement, but ministers are prepared to talk about an extension of the European Court remit over regulations, building on Sunak’s Windsor framework. Here, as on the prospects for inward investment, the stars are aligning for Labour. Britain and the EU are being driven together by the isolationist politics of Trump and JD Vance – even after Biden’s decision, news of which reached Starmer as he and his wife were gladhanding local party workers in London – the Republican pair remain likely to win. The “Vance effect” (he is a more serious thinker than Trump) will both divide the Tories as they search for an identity and make barrier-reducing EU deals more likely.

In the Foreign Office, however, they are postponing and cancelling foreign holidays because of worries that Netanyahu will turn to attack Hezbollah in Lebanon, and the horrific war will spread. This is another area where the UK and EU are closely aligned.

Always, there’s rough weather ahead. There will be policy mistakes and feuds. An election victory cancels neither the fundamentals of Britain’s position today, nor human nature. But it has given us serious people and a political settlement which is, by global standards, stable. We will need that. And the New Statesman’s fraternal summer advice to them? Take a short rest – and read some proper books.

Both may help them to make political arguments more clearly and strongly than they have so far. Before long, Reeves will have to tell the electorate that she cannot turn on the spending taps and explain, in that context, what are her priorities – and what are not.

[See also: The challenge of biggish government]