It was supposed to be Labour’s big moment. Flush with by-election success and following on from a lacklustre Conservative Party conference, this was Labour’s chance to set their stall out and inspire the nation ahead of the next general election. Labour is making so few policy commitments ahead of their anticipated General Election victory next year. So, when PM-in-waiting and his Chancellor say they have a plan we should pay attention.
Despite sections of the party demanding massive investment in the public sector, particularly the NHS, that money has to come from somewhere. Whilst some sections of the left still think you can just print it, without any adverse consequences, Starmer and Reeves seem unlikely to adopt such a plan.
Even Keynesianism seems a little too close to socialism for the neo-liberals now enthusing the British public by arguing for more efficiency on everything from fraud to immigration. As if a global economic crisis can be managed out of existence by technocrats lacking in either imagination or charisma.
In his glittering conference speech Starmer set out why we should vote Labour. In brief it came down to this “Because we have a plan.” But is it a good plan?
Interviewed by Victoria Derbyshire on the BBC, Starmer made much of how he would spend the £1.5 billion non-dom tax money on the NHS. His ‘plan’ was to pay staff for working additional shifts at the weekend to bring down waiting lists. He said that he was talking to NHS staff and they supported the plan (“My wife works for the NHS. I get daily updates.”). But Royal College of Nursing Chief Nurse, Professor Nicola Ranger, said:
“Too often the NHS runs on the goodwill of its staff. Nursing staff work so much overtime that is never paid…. As part of their shift patterns, weekend work is routine for many.” So, who are Labour talking to exactly? Not the staff, obviously. Perhaps the businesses who are just waiting for more opportunities to ‘invest’ in the NHS. Yvette Cooper, Wes Streeting, Keir Starmer and Rachel Reeves are on a list of Labour MPs who have received up to £300,000 from private healthcare providers.
Labour’s plan for the economy, such as it is, relies on growth. Questioned by Victoria Derbyshire on whether no growth meant no investment in public services, Starmer waffled about a plan to improve skills and emphasised, “This will not be state controlled”. It relies on growth he cannot guarantee and a compliant private sector prepared to invest in public infrastructure. It certainly does not include using public sector investment to spur on an economy in tatters after the speculators have ensured that their profits rise in inverse proportion to investment into our services. To appreciative applause from the audience, Starmer reiterated that the connection between Labour and social democracy was now well and truly severed. “Private enterprise is the only way this country pays its way in the world,” he said.
So, what is this plan? Mostly it seems to be saying ‘growth’ and ‘skills’ repeatedly. On Labour’s website it says: “Secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country making everyone, not just a few, better off.” But how? Rather less detail there, but interesting interviews with “business leaders” who appear to be the key demographic this plan is supposed to impress. Whether making a promise to increase growth is a plan is doubtful without some detail to tell us how this aspiration is to be reached.
Shadow Chancellor Rachel Reeves, in her final keynote speech prior to the General Election, would surely have the answer. Reeves ‘big’ idea was: “If we want to spur investment, restore economic security, and revive growth, then we must get Britain building again.” We are all going to be given a Lego kit the day after the election, perhaps? No, the plan was even less ambitious than that. “A once in a generation set of reforms to accelerate the building of critical infrastructure for energy, transport, and technology.” Starmer added to this with his promise to build 150,000 new homes. Labour’s £7 million of donations from businesses will welcome this commitment to transfer public sector finance into private hands. And, construction companies, who have traditionally been Conservative donors, will breathe a sigh of relief that the second eleven are planning a dividend for them after recent fallow periods.
So, now we know the plan. To get the economy working properly we need to get nurses and other health workers working even longer hours, and to reform building legislation so that, as they crawl home after those long shifts, they can see more houses they cannot afford being built.
Is a reliance on growth realistic or optimistic? This, from investment managers PIMCO might help to assess that question: “We believe that neutral long-run real policy rates in advanced economies will remain anchored over the secular horizon in the New Neutral range of 0% to 1% by powerful long-term forces of aging demographics and sluggish productivity growth.” Translation? The economy is not improving dramatically any time soon. To believe that it is possible to pull the British economy in a different direction to the rest of the G7, whilst maintaining the current fiscal constraints is either political charlatanism or political naivety. You decide.
CORRECTION: In an earlier version of this article we described Sir Keir Starmer as having the charisma of a slug. Following representations from the National Union of Molluscs, we wish to apologise for any offence caused to slugs.