19
January 2021

Written by:

Gareth Morgan

Director

Labour starts to fill in the blanks

When people analyse Labour, they tend to do so through the prism of the internal fight for control. Such is the nature of the party that it is the scene for almost perpetual battles over the apparatus and the past five years have seen a particularly ferocious phase in that fight.

Last week saw a few additional pieces fall into place for Starmer and his ability to control Labour – but also a few hints about what he will use that control for in policy positioning terms.

 

Control

First the control part.

This can seem arcane (think Kremlinology) but control of the different arms of the Labour movement is critical to Starmer’s desire to detoxify the Labour brand following the ECHR investigation into anti-Semitism.

The perception of the Leader is of course critical. The product can be as good as you like, but if the salesman is simply not trusted or deemed incompetent then it doesn’t matter. But there are also broader voices within Labour that can undo the positioning work of the Leader and his team.

Starmer started last week with the Leader’s office, his man as General Secretary of party, the vast majority of MPs on his side and a majority on the National Executive Committee.

Last week he saw a supportive new General Secretary of UNISON take over and Gerard Coyne (a former moderate regional secretary close to Tom Watson) throw his hat into the Unite leadership election where the Left candidates are divided amongst each other. The era of Len McCluskey is almost over and there is a fighting chance that his successor will not be from the Corbynista wing.

But the more surprising development on this front was in Scotland. Richard Leonard MSP, Leader of the Party in Scotland, announced his resignation just four months from the next set of Scottish Parliament elections. A Corbyn ally that was feted by his media outriders as the man to turn around Labour’s issues in Scotland is now set to leave the scene. Will it improve Labour’s chances in these elections? Almost certainly not – Leonard was a poor performer but their issues are structural, decades in the making and hamstrung by the Independence debate. But what it will potentially do is put a moderate in charge North of the border – already we have seen Anas Sarwar MSP (a Brownite – remember them?) indicate that he will stand.

The Left and vocal critics of Starmer will remain but are being squeezed out of controlling positions in the party and the Labour movement. They will continue to be noisy on Twitter but in the real world Starmer’s grip is tightening.

The question now is: What will he use that control for?

 

The Family Speech

We got our short-term answer from last week’s speech on “securing the economy for families during lockdown”.

Some of the themes here attracted a lot of attention on Labour Twitter (“family” is a loaded word for some of the faithful) but it was in many ways an exposition of the themes we expected from Starmer when he pulled his team together – family-oriented with lashings of “progressive patriotism” – with 20 mentions of Britain/British and 18 of family/families.

This speech was the starting gun for the English elections campaign this year (Wales is a governing party with its own agenda and Scotland is… a mess). These may well be pushed back from May but local elections including some of the big regional mayoralties are up for grabs and we know now how those will be fought.

Starmer praised the UK being first with a vaccine – lauding British scientists, British research, British business – and called for a national effort (including 24/7 vaccination programme) to make sure we are the first to be vaccinated. Again, the tone is critically supportive with the “national interest” to the fore.

There will be a relentless focus on framing the Johnson administration as incompetent. The UK having the worst death toll in Europe and the deepest recession. Crippled by indecision with Johnson making calls too slow and too late.

He also tried to tap into the frustration with lockdown support but framed it as letting down families – leaning into the frustration with home schooling the 2nd time around and the income protection inadequacies.

The Government needed to support families by:

  • Introducing a right to furlough for parents struggling to cope with home schooling
  • Stopping the “council tax hike”
  • Halting the Universal Credit cut
  • Revising the intention to freeze the pay of key workers; and
  • Extending the ban on evictions

More broadly on the economy he called for:

  • 400,000 green economy jobs (by increasing capital investment and intensifying investment timeline)
  • Creating a “High Streets Fighting Fund”; and
  • Closing the loophole in income support that has left self-employed people exposed

There is no escaping this is a tactical approach, but this isn’t by accident. The policies are calibrated to the lockdown and for the local tier of elections that are coming.

Frustrations abound within Labour that the broad sweep or vision is missing and that Starmer looks to be too much like an Ed Miliband Mk II. But for LOTO this is still more about the framing or narrative of this Government and, importantly, the perception of credibility, competency and “PM-in-waiting” of their man.

 

Mais Lecture

More interesting in many ways was the outlining of the long-term approach to the economy given by the Shadow Chancellor, Annaliese Dodds MP, when she took star billing at the annual Mais lecture to the Business School at City University London.

Dodds currently has a low profile and the public seldom read economic speeches from the Opposition – so this wasn’t about inspiring them, it was about signalling to the markets and media that Labour under Starmer was a responsible alternative focused on the long-term, scrutinising spending to ensure it is delivering and creating a resilient economy that can withstand shocks.

As ever it was criticised by internal critics for lack of ambition (I think they meant desire to overthrow capitalism) but it is worth remembering that with McDonnell this was a key focus too. His “Fiscal Credibility Rule” was a commitment to running a day-to-day surplus while borrowing for infrastructure investment. It was a conservative framing of Labour’s approach to the economy designed to not spook the horses. So too with Dodds – her approach is holding with the substance of McDonnell’s.

She ranged in her speech across monetary policy, fiscal policy, economic policy and scrutiny of spending that was meant to project steadiness and raise questions about Conservative handling of the economy over the last decade. The ideological approach to deficit reduction had not only missed every target it had set itself but had made an economy that lacked resilience in the face of this current shock. In keeping with Starmer’s positioning she shone a light on the current Government and perceived wasteful use of public money during the pandemic.

Some key points to extract from Labour’s approach are:

  • Monetary Policy – Maintaining BoE independence and lauding its contribution during the pandemic, particular focus was on the use of quantitative easing to spread over time the cost of coronavirus to society.
  • Fiscal Policy – A strategic use of fiscal policy that is consistent with her predecessor’s rule. Labour are targeting a balanced budget over the cycle but still allowing for flexibility in times of crisis and for productivity-enhancing investment. Pragmatic rules covering the debt and deficit, longer-term and more transparent budget planning, government accountability and the commitment to provide value for money – would lay the groundwork for a “sustainable, resilient recovery” from the current crisis.
  • Tax and Spending Projections – The Red Book’s projection of tax take and public spending is currently restricted to the next five years. Where possible this should be extended to include a projection of revenue and spend over a 20-year budgeting horizon. Doing so should enable “more honest” debates over issues like social care and gaps in pension provision.
  • Value for Money – She shone an overtly political light on the Government’s record of waste and the past decade of failed/stalled infrastructure projects. Labour would invite the Comptroller and Auditor General to submit an annual report to Parliament, bringing together the NAO’s findings throughout the year into a single assessment of the effectiveness of public spending and ensuring Government responds to that report. Labour would make sure in the Budget the Government would set out its own assessment of the effectiveness of public spending, open to external challenge and scrutiny – “hardwiring value for money and financial control into the budgetary process”.
  • Economic Policy – The role of Government in economic policymaking is about much more than effectively managing the flow of tax and spending. Government must also have a strategic response to the two overarching challenges to our economic resilience – exogenous threats like climate change, pandemics or trade disruption and improving the UK’s economic competitiveness, through industrial policy, modern competition policy, and improving the returns to innovation.

She set out a “responsible approach” to delivering a resilient, jobs-rich recovery from this crisis and a stronger, better future for the 2020s and beyond and promised to make effective use of all economic policymaking levers at the UK Government’s disposal.

That means an independent Bank of England setting monetary policy; a “responsible government” using fiscal policy to ensure public money is spent effectively and wisely; and action to improve resilience, including in the face of the climate crisis, and to deal with challenges to our economic competitiveness.

 

So, in a single week we saw opportunities for Starmer to consolidate control in the party, the starting gun go off for the elections in 2021 and the building blocks for Labour’s approach to the economy set out.

The General Election is some way out and the challenge facing the Leadership is huge, but the party has been neck and neck with the Government for some months and Starmer enjoys superior ratings to his opposite number.

Labour are starting to put in place the building blocks of credibility and to talk a little more about what they would do. Big gaps remain but we need to start listening a little more.

 

If you need help understanding the political landscape or would like to discuss this topic further, please do not hesitate to get in contact with Gareth Morgan.