Keir Starmer’s Labour Party has hit the ground running. Since entering Downing Street, the new prime minister has been keen to give the impression that a new era has begun. There have been surprise ministerial appointments from outside of parliament, and a flurry of policy announcements, belying the accusation that the party is devoid of ideas. The question is whether these ideas will work: are they enough to deliver the “decade of renewal” and rebuild a dilapidated public realm in an era of fiscal constraints and high interest rates?
Perhaps the party’s intellectual hinterland is the same as its electoral support: broad but thinly spread, wide but shallow. Much of the likely legislative agenda will take the form of structural, legalistic and regulatory tweaks, with only small pots of cash dedicated to extra investment, and, so far, no word on how the baked-in cuts to non-protected departmental budgets will be remedied.
Wednesday’s King’s Speech will contain up to thirty bills covering green energy, crime, housebuilding, transport, workers’ rights and devolution. Much of this, including the New Deal for Working People proposals, were promised in the first hundred days. If implemented in full, they would represent the biggest extension of employment protections in a generation, committing to the end of zero-hour contracts and the establishment of sectoral collective bargaining agreements. Pointedly, the Unite union refused to endorse the plans as they thought they didn’t go far enough.
Railway nationalisation is also likely to be included as both houses of parliament are addressed by the monarch in the Lords. But it will be a gradual process, as operator contracts, many of them already under the control of (foreign) governments, join the physical network and come slowly back into the state sector.
Planning reform has already been trailed as a panacea to solve the related conundrums of low growth, costly infrastructure projects and stunted housing supply: remove the bureaucratic bottlenecks, replace the Nimby charter of the current system, and the cranes, shovels and hard hats will begin to pop up. The government has its fingers and toes crossed for a dash for growth that obviates difficult spending decisions, and this is the centrepiece.
But these best laid plans could go awry for three reasons. First, when a radical set of planning reforms to reduce the discretionary nature of our system were last put before parliament under Boris Johnson, they were defeated by a Nimby MP rebellion. Labour’s line at the time was that the measures represented a “developers’ charter” that would “deprive communities of power”, which suggests that the party’s more recent conversion to Yimbyism is only skin deep. Second, the government’s majority now runs through a host of relatively genteel, rural and peri-urban constituencies: Nimbyland. One of the party’s new MPs, Chris Hinchcliff for North Hertfordshire, even cut his teeth as an organiser for the Campaign to Protect Rural England, the Nimby institution par excellence.
Thirdly, planning laws aren’t the only thing holding back the UK’s bold engineering and entrepreneurial spirits. A lack of skilled construction workers will hamper efforts and tempt ministers to lower thresholds for migrants working in the sector – another potential political headache. Developers are also known to sit on developable land for long periods as its value rises, and local authorities, which have been chronically starved of cash for the last fourteen years, lack the personnel and capacity, having only emaciated and over-worked planning departments to sift through complex sets of applications.
But the Chancellor Rachel Reeves will be hoping that the build, build, build laws will be enough to end a period of secular stagnation that has taken hold since 2008. The UK’s productivity and real incomes have barely shifted since Lehman Brothers went into administration.
Along with planning, other measures intended to turbocharge investment are the National Wealth Fund, Great British Energy, and the Industrial Strategy Council – all expected to be included in Wednesday’s Speech. The Take Back Control Bill will devolve more powers to local authorities and metro mayors. When it comes to areas like skills and training, devolving policy levers and ending a top-down, Whitehall-knows-best approach could transform local labour markets. If more regions are given the powers (and funding) to adopt TfL-style franchising models for local transport, that could also act as a boost to regional and local economies by improving connectivity and agglomeration.
What ties this whole agenda together is what the US Treasury Secretary Janet Yellen has described as a “modern supply-side” approach to political economy, which “prioritises labour supply, human capital, public infrastructure, R&D, and investments in a sustainable environment”. While the right has previously been more associated with supply-side economics, this new model reverses the small-state, pro-market paradigm to advocate for a more muscular, strategic state, and active partnership between business and government. This new dirigisme has been called productivism (for its focus on regional manufacturing jobs), and Bidenomics (after its practical application through the US Inflation Reduction Act). For Reeves, it’s “securonomics”, a paradigm that has been set out most forcefully in her Mais lecture. In it, she proclaimed an end to a highly globalised, low-friction, free-market era in which governments paid little heed to where things were produced, or how markets allocated capital.
But building a supposedly post-neoliberal economy on a shoestring budget won’t be easy, and a period of much higher growth is needed if the Treasury is to avoid either a further round of austerity, or a dramatic breach of its own fiscal rules. Public services, and particularly fixed public assets, not least the prison estate, are desperate for increases in capital investment that have remained elusive under successive Conservative governments. As a response to the lack of financial leeway, the government will be tempted to seek absolution from the private sector. But measures such as the National Wealth Fund must ensure that the public purse gets returns on often risky investments, and that the benefits of “de-risking” aren’t squirrelled away by private sector partners in a re-run of the Blair-era private finance initiative. Similarly, the ultimate form for Great British Energy remains unclear: will this look like a publicly owned generation company, or a vehicle for privatising profits in the sector while the state absorbs losses and takes on risks?
Make no mistake, delivering on the promises contained in the manifesto and fleshed out in the King’s Speech – restoring public services, recalibrating the relationships between state and market, as well as between labour and capital, will require Keir Starmer to make some enemies. The prime minister has already indicated he is prepared to do so to drive growth. This will be his ultimate political test.
[See also: England defeated: another glorious failure]
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