Economy

This is Keir Starmer’s moment — but victory is not yet assured

While politicians love to divert attention from their rivals, a “WTF?” message from the IMF was not the way Conservatives wanted to overshadow the Labour party conference. Sir Keir Starmer’s speech in Liverpool was drowned out by the “glug glug glug” sound of a Tory government losing control of the debt markets. But the turmoil has suddenly brought Starmer himself into sharp focus.

Until now, Labour MPs have been downbeat about any immediate prospect of gaining power. The party is still trudging back from the wilderness, under a leader who, it fears, lacks charisma. But this week, everything changed. In this unfolding crisis, which could even topple newly-appointed Liz Truss, the country needs an opposition which is ready to govern. And Labour is beginning to look like one.

Power is draining away from this government. You can see it in the stony faces of bankers, pictured sitting around the table with Kwasi Kwarteng as he tries to convince them he has a workable plan. You can hear it in the fury and despair of Tory MPs, who are incandescent that their leaders have recklessly inflicted economic pain on voters. Some have told me they may not stand for election again; others will be staying away from their own party conference which starts on Sunday.

In demanding that Truss recalls parliament to address the crisis (while she, meanwhile, still denies there is any crisis at all), Starmer has looked like the grown-up. His earnestness feels reassuring. His proposal for a state-owned Great British Energy company, which would co-invest in nuclear and renewable power, feels in tune with the times — unlike the government’s mania for fracking and its belief that energy efficiency measures are a Stalinist plot. Starmer’s timidity on policy had made me wonder if he was capable of big ideas. This one is big.

Watching Labour delegates sing “God save the King” in Liverpool (words provided) was a big change from last year’s heckles after the Hartlepool by-election defeat. Starmer was cheered when he claimed that Labour is “the political wing of the British people”— well-known to be a quote from Tony Blair. He has faced down his lunatic fringe, and been rewarded with the biggest poll lead for 21 years. The public seems to think it’s safe to vote Labour again.

Britain has never liked zealots. It’s an irony for the Tories that they routed Jeremy Corbyn, only to put an extremist of their own into Downing Street. Truss’s unfunded tax cuts may have resonated with the party members who shouted down Rishi Sunak’s warnings about her ideas. But out in the real world, 7 in 10 Conservative voters dislike the “Kami-Kwasi” tax cuts. The majority of the public are in favour of raising tax and spending more on public services, up 36 per cent from a decade ago.

People understand that the pandemic required exceptional levels of borrowing to support households and businesses, and that this will need to be paid for, along with the freeze on energy bills. They feel the effects of inflation every time they shop. They don’t want fantasy economics, especially when it triggers warnings of falling house prices and rising mortgage rates. Seeing Truss struggle with economic management overturns the convention that Labour governments blow up the public finances, and Tories put them back together.

That switch in the voters’ minds still does not make a Labour victory inevitable. It is a sign of how much ground Starmer has had to recover after the craziness of the Corbyn years, that he had to declare solidarity with Ukraine against Russian aggression, and commit to Nato. He has got to first base. But to win a clear majority, he has to do more than sit tight while the Tories stumble. We still don’t know what he would actually do on his first day — or year — in Downing Street.

If Starmer equivocates for too much longer, voters will start to wonder. Is it that he doesn’t know what he thinks, or that he is concealing his more leftwing views? He does still have two years to the next election, unless the Tories implode. And he has been busy with reforms which have reduced the influence of the hard left. Looking at the optimism among Labour moderates today, I wonder if Starmer has already had his Clause IV moment — the equivalent of Tony Blair’s repudiation of nationalisation as a core principle. His refusal to let frontbenchers join picket lines will cost him trade unions’ donations, but it will also make it hard to portray him as being in the unions’ pockets.

Clear policies are still needed, however. Without a well-planned programme, clearly articulated to his own party, he risks being weakened in office by a cabinet that might exploit ambiguity. Starmer needs to be precise about his criteria for nationalising the railways and parts of the energy system, for example and where the limits of this policy lie.

Right now, it feels as though the Labour leader and his shadow chancellor, Rachel Reeves, have a better chance of projecting economic prudence than Liz Truss and Kwasi Kwarteng. In 1997, Labour won public trust by promising to stick to tight Tory spending limits for the first two years of the Blair-Brown government. Starmer cannot repeat that particular trick. But he could for example support the government’s proposals that would force trade unions to ballot their members on pay offers.

“He was the future once,” David Cameron told a packed House of Commons nearly 20 years ago, at his first prime ministers’ questions against Tony Blair. Now, it is Starmer’s turn to look like the future. And he’s almost there.

camilla.cavendish

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