Starmer is right. Labour can’t spend its way to victory

 Despite the wails of the left, fiscal responsibility matters

Source - Daily Telegraph 24/08/23

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It's all Margaret Thatcher’s fault. Before her decade in power, British politics was less about accountancy than about ideas. Sure, Jim Callaghan and Denis Healey struggled with the nation’s finances, and were regularly traduced by Mrs T for spending more than what she thought the country could afford. But elections in those days tended to focus on the virtue, rather than the cost, of policy. 

It was only in the 1980s that Labour finally started to get the message that uncosted manifesto pledges were a gift to their opponents. And we were well into the 1990s before a Labour leader emerged who genuinely understood that the party’s eagerness to say “yes” to every supplicant was undermining the chances of ever delivering on those commitments.

There could be no better illustration of Mrs Thatcher’s political legacy than Pat McFadden’s warning to his front bench colleagues to rein in their plans to “spend, spend, spend”. The shadow chief secretary insists that there has been no pushback against his strictures on departmental budgets, due to their acceptance of the economic challenges Keir Starmer’s party is likely to inherit after the next general election.

By now this has become a familiar refrain from a party for which caution has become its defining principle. Whether deliberate or not, this phase of Labour’s transformation from a four-times election loser to a potential party of government is the natural next step in the process over which Starmer has presided. 

Given that hundreds of thousands of party members who remain in the party voted for Jeremy Corbyn in 2015 and 2016, the first phase was a traumatic one: turning its back on everything Corbyn believed in. The current, second phase – hammering home the need to shake off Labour’s traditional desire to spend other people’s money – is a bigger challenge. After all, what is the point of a Labour government if it spends no more money than the Conservatives would have?

Even to ask the question is to acknowledge the profound dearth of ideas at the heart of the Labour project. For many on the Left, the only point of politics is to win support for policies that cost a lot of money. And because they have devoted almost all their efforts over decades to that cause, they have expended almost no effort in coming up with policies that cost little in terms of GDP but which can have an enormous impact on the quality of the lives of our citizens.

The introduction of civil partnerships by the last Labour government, for example, entailed little or no cost and made Britain a better place to live. While the media love to dwell on big ticket items and large infrastructure programs, small executive decisions taken every day can have a big impact on our standard of living.

Shadow ministers need to use the next year to be imaginative, to come up with low- or no-cost ideas that will nonetheless help those they represent. From planning reform to civil service reform, from empowering the private sector to deliver positive outcomes to exploiting and sharing the increased value of land caused by publicly-funded capital projects – there are opportunities out there waiting to be grasped by politicians whose imaginations extend far beyond winning spending arguments with the Treasury. The public will not give blank cheques to those who reveal themselves unable to govern wisely and effectively in straitened times as well as in days of plenty.