Whisper it, but Labour is now saying that Thatcher and Truss were right

 Shadow chancellor Rachel Reeves speech tonight will acknowledge that her party can’t carry on within its comfort zone

Source - Daily Telegraph 19/03/23

Rachel Reeves is quite possibly the bravest woman in politics.

How many of her colleagues – or even her forebears – would so fearlessly invite a comparison between today’s Labour Party and Margaret Thatcher’s Conservative Party of 1979? Extraordinary though that sounds, it’s exactly what the shadow chancellor will do in her speech to the City of London tonight.

Her pre-briefed comments include this passage: “As we did at the end of the 1970s, we stand at an inflection point, and as in earlier decades, the solution lies in wide-ranging supply-side reform to drive investment, remove the blockages constraining our productive capacity, and fashion a new economic settlement, drawing on evolutions in economic thought.”

Well, yes, quite.

What’s particularly eye-catching about this rhetoric is that Reeves has deliberately chosen to draw a comparison between Britain at the end of the Winter of Discontent – under a Labour government – and the mess we’re currently in under Rishi Sunak. 

She could have chosen a different parallel. She could have suggested that she and her leader, Keir Starmer, were a new generation of reformers in the mould of Clem Attlee and the post-war Labour government, a group of people still regarded as secular saints by most Labour activists.

Or she might have invited comparison with Harold Wilson’s 1960s-era crusade to mastermind a second industrial revolution. She might even – and this would indeed have been risky – made a direct comparison between Starmer and Tony Blair, or herself and Gordon Brown, at the beginning of her party’s 13 years in power in 1997.

But to deliberately evoke, and in positive terms, the point at which failed Labour corporatism was overtaken by Thatcher’s brand of monetarism and “sound finance” seems almost reckless, at least in Labour terms. No one is hated more by the party than Thatcher (though Tony Blair comes a close second), even if the reasons she is hated quite so intensely are now lost in the mists of time.

Since few Labour activists were actually around at the time, most can’t recall the fact that Jim Callaghan and Denis Healey, his chancellor, had effectively already accepted the monetarist arguments being pedalled by the Right as Labour’s period in government drew to a close. 

The de-industrialisation that characterised Thatcher’s first term, as historian Dominic Sandbrook convincingly argued in his latest volume of modern British history, Who Dares Wins, would almost certainly have happened anyway, even without Thatcher in Downing Street. 

But just as Labour chooses to ignore the fact that in the last months of the Brown government, his chancellor, Alistair Darling, warned that colossal spending cuts – or “austerity”, if you like – were coming down the line even if Labour were re-elected, the party prefers the comfort of its revised history record, where Labour governments never have to make difficult decisions or impose unpopular policies.

Intriguingly, not only is Reeves inviting speculation that she will be Thatcherite in her economic outlook, but she also seems not to care that a more recent Conservative hate figure (why do Labour have so many “hate” figures, by the way, when their political opponents prefer to settle for people with whom they disagree?) might now be invoked.

It was Liz Truss, prime minister number four in a series of five since 2016, who stole a march on Reeves by demanding that all of the government’s efforts be focused on generating economic growth. 

Her ignominious removal from office after only 49 days might give the mistaken impression that her core message, rather than her preferred policy choices, were rejected by the establishment. In fact, no serious politician from either side of the spectrum disagrees with the uncomfortable truth that without private sector growth and profits, public services are doomed.

If the only way of paying for the NHS is to borrow more and more without generating our own economic growth, then at some point the money must stop flowing and services must suffer. 

Until Thatcher came to power, this was a truth that dared not speak its name. In the Labour Party, it took another decade or so before senior figures acknowledged this inescapable truth. 

Older readers might even recall Neil Kinnock’s attempts to convince us in the early 1990s that a future Labour government under his leadership would invest using “the proceeds of growth”, as if the idea was a new one. In fact it was, to the Labour Party at least.

That all ends with Reeves. Bolstered with a comfortable – some might say impregnable – opinion poll lead, she sees no need to pussyfoot any longer around her activists’ hurty feelings about the evils of capitalist greed and profit. 

Since, barring the arrival of a meteor hitting the earth or a similar extinction-level event, she is going to be chancellor in a few months’ time, she might as well make it clear what the facts of life are now, before the hard work really starts.