Keir Starmer, Labour Party Leadership Hustings 2020. Source: Wikipedia Commons

What the hell is Labour doing?

With Labour far ahead in the polls, Jonny Jones discusses Keir Starmer’s failure to present a meaningful alternative to the Tories and inability to imagine anything beyond economic growth.

Keir Starmer’s Labour Party has held a consistent polling lead over the Tories since December 2021. How, then, do we explain the party’s timidity when it comes to pressing for social change and delivering respite to millions of people at the sharp end of a cost-of-living crisis?

After all, Starmer was elected Labour leader three-and-a-half years ago on the back of a set of pledges that echoed much of the redistributive agenda of Jeremy Corbyn. These pledges have, of course, been abandoned at every turn in the intervening years, and the contortions of Labour frontbenchers have been grotesque to observe. Lisa Nandy told last year’s Labour conference that she wanted to give local authorities the power to introduce rent controls, saying ‘Doing nothing is not an option’. Nine months later, she decided that in fact doing nothing was an option, and it was the one she’d be taking. Similar collapses have occurred around ending the two-child benefit cap, abolishing tuition fees and introducing free school meals, among many others.

Starmer argues that it’s not possible to make big promises on spending because ‘we will inherit a broken economy, broken public services and we have to have clear rules of what we can’t afford’. As with most of his statements, a grain of truth is buried under a pile of rubbish. The British economy is in a sorry state after years of underinvestment, with productivity stagnant. The mini-budget fiasco presided over by Liz Truss last September has contributed to skyrocketing government borrowing costs, as well as feeding into the ongoing crisis around inflation.

The end of cheap government debt, which was also a central plank of Corbyn’s reform program, leaves Starmer with a choice between backing redistribution of wealth or pegging all spending pledges to an increase in growth. Starmer has backtracked from progressive tax rises, saying the tax burden is too high. Shadow chancellor Rachel Reeves has ruled out a mansion tax, increasing income tax for the highest paid or equalising capital gains tax – currently just 28 percent on money taken from residential property and 20 percent from other assets, significantly less than the 45 percent top rate of income tax.

This leaves everything riding on growth. And yet growth is not some neutral indicator of economic activity in which a rising tide lifts all boats – the proceeds of economic growth are not evenly shared, and so redistributive taxation would be required even if growth were surging.

As the economist James Meadway has argued, tying spending increases to growth is a ‘social and political calamity waiting to happen’. And as climate catastrophe sharpens, and we are faced with extreme weather events leading to droughts, crop failures and supply chain shocks, how is it sensible to look to growth as a solution to the deepening social crisis?

Reeves has rhetorically hitched Labour’s approach to ‘Bidenomics’, the economic policies pursued by US president Joe Biden. A proposed £28 billion a year green investment programme is Labour’s version of Biden’s Inflation Reduction Act, which in part sought to spur private investment in clean energy through a system of tax breaks and subsidies. Reeves is seeking to imitate this from a much weaker economic position, amounting to providing asset fund managers with incentives to invest in green infrastructure. However, Reeves’ commitment to shrinking the state’s debt-to-GDP ratio has led to even this programme being diminished in the name of fiscal responsibility.

Yet Starmer’s policy backtracking goes beyond big ticket spending pledges. On Thursday 17 April, the Financial Times ran a story headlined ‘Labour rows back on workers’ rights to blunt Tory ‘anti-business’ claims’. The piece went on to detail how Labour’s promise to create a single status of ‘worker’ to guarantee workplace rights and protections for everyone but the genuinely self-employed was being watered down, with Labour now merely committing to ‘consulting’ on the changes if it enters government. Why the policy change? According to the FT, Starmer’s aim is to ‘to woo corporate leaders and discredit Tory claims that his party is ‘anti-business’ ahead of the next general election.’

The following day, Angela Rayner, deputy leader and shadow minister with responsibility for the work brief, announced that far from watering down its pledges, Labour’s new plans would be ‘the biggest levelling-up of workers’ rights in decades – providing security, treating workers fairly, and paying a decent wage.’ But the fact that the FT had been briefed in advance of the announcement that pledges were being diluted and the visible fight the leadership put up over the issue with unions at the National Policy Forum makes it clear that the leadership wanted to temper any enthusiasm around workers’ rights.

Unite’s general secretary, Sharon Graham, slammed the changes, saying ‘Labour needs to make the right choices for workers now, not water them down to curry favour with big business. They need to stop wavering and make a clear signal that they are truly the voice for working people.’ Starmer’s ‘voice of the people’ schtick doesn’t go much further than laughably holding himself up as a model of social mobility – a poor lad done good, rhetoric that rings hollow as he backtracks on any policy that could address poverty.

Despite a commanding lead in the polls, Starmer is still running scared from the Tories. Labour’s defeat in the Uxbridge by-election has been put down to London mayor Sadiq Khan’s extension of the ultra low emissions zone (ULEZ), that costs drivers of older, more polluting vehicles, into outer London. In reality, this was just one factor amongst many. But it’s hardly a wonder that this ULEZ was an effective attack line from the Tories when Labour’s candidate bent over backwards to say he doesn’t support the policy.

There are plenty of criticisms to be made of ULEZ – that it disproportionately affects poorer drivers of older vehicles, and that it needs to be mitigated by a proportionate scrappage fee and a massive extension of public transport. Instead, Starmer reacted to the narrow ‘loss’ (in which a once safe Tory seat was only narrowly held) by calling on Khan to rethink the policy – a move that even the bankers’ free sheet City AM described as ‘amateurish’: ‘When challenged on major policies, the party’s front bench vacillates.’

Again and again, whether on migrant rights or support for trans people and gender recognition reform, Starmer’s Labour shambles from one position to another in an effort to defang the Tories’ attacks, yet every time giving more space to hard right positions. These concessions are giving strength to racists and bigots, storing up trouble for the future.

Fundamentally, Starmer has had two interconnected missions since becoming leader. First, destroy the left of the Labour Party so that there could never be a repeat of Corbynism or anything like it. On that front, Starmer has been merciless and successful. The Labour left is a husk, cowed in parliament and aimless beyond it. Second, Starmer has wanted to re-establish Labour as a safe pair of hands for British capitalism, the second team who can pick up the ball where a tired, clapped out Tory party has left off. Starmer has done well on this front, too, and this year’s Labour conference is oversubscribed, with businesses and exhibitors clamouring to get a seat at the table.

But Labour’s policy platform for government is anaemic. Indeed, Starmer’s commitment to crushing the left and returning politics to ‘business as usual’ undermines any potential that might exist to corral fractions of British capital behind an agenda to seriously transform the economy. Some Labour insiders recognise this. One told the Guardian that ‘The caution at the top of the party is so extreme that we’re even watering down or rejecting the policies we’ve already announced…if we don’t invest and offer some real solutions, we’re just creating a rod for our own back.’

Even John McTernan, Tony Blair’s former political secretary, has suggested that Starmer should be more confident in proposing climate friendly policies to present a positive vision of change. McTernan is rightly confident that the Labour left is so badly smashed that the right can adopt aspects of its policy programme. But Starmer is so afraid of absurd Tory suggestions that he is supportive of Just Stop Oil that he denounces the campaign group’s wholly sensible aim of ending new oil and gas licences as ‘contemptible’.

The result of this cowardice and commitment to business as usual is that we approach a general election with a typically meagre choice. Any notion that Labour in office is going to throw caution to the wind and enact a transformative agenda is delusional. The Tories may have no plan for rehabilitating the ailing British economy, but Starmer’s approach has little more to offer. And since this will be the metric by which a Labour government will be judged by capital, and growth has been set up as the prerequisite for increased social spending, we can expect Starmer to have a bumpy landing should he win at the next general election.

If Labour do win, there will be little popular enthusiasm for anything they offer beyond not being the Tories. Starmer has offered little to the trade union leaders, and so far Unison and GMB have backed down over his watering down of workers’ rights. But it remains to be seen how long Labour will be able to keep union discontent under wraps in office if it commits to maintaining wage restraint. The upsurge in strikes and organising we’ve seen over the last two years has had mixed results but one effect it has had is to bring a new layer of rank-and-file activists into action. Between Labour’s arrogant dismissal of the unions and the ongoing development of this grassroots activism, the strike wave may be the prelude to bigger struggles to come.