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It’s the second day of Labour conference in Liverpool — the party’s first in power for fourteen years. But the mood, notwithstanding the historic nature of the fête, is some distance short of jubilant.
That’s because the conference comes not only in the wake of a genuinely seismic election triumph, but amid a litany of pervasive petty scandals.
It’s little surprise, then, that Rachel Reeves, the chancellor of the Exchequer, addressed the conference floor today with a plan to revitalise Labour’s messaging.
Touring the makeshift broadcast studios on her pre-speech morning media round, a beaming Reeves insisted she’s “never been so optimistic” about Britain’s future. Labour, finally, is leaning into hope and change after months of manky miserabilism. Read the chancellor’s full comments here.
Optimism was also the primary theme of Reeves’ speech this afternoon. “We must deal with the Tory legacy and that means tough decisions. But we won’t let that dim our ambition for Britain”, she insisted. Reeves’ full remarks can be perused here.
But today: some thoughts on the “credibility trap” that Labour risks springing with its economic agenda, as set out by Reeves this afternoon — and what it could mean for our politics. More below.
Keir Starmer faces ‘credibility trap’
The reins of government sit idly in Labour’s grasp.
Media reports speak perplexedly both of the government’s direction and the individuals supposedly masterminding it. Commentators cry out in chorus: where is Labour heading — and who is really in the saddle?
The fallout of Labour’s decision to cut the winter fuel allowance for more than 9 million pensioners is simultaneously empowering the party’s “freebies” woes and the concurrent charges of hypocrisy. Meanwhile, Downing Street dysfunction — the prevailing narrative runs — suggests any restoration of political order is likely many months (and a few resignations) away.
The worst last year’s Labour conference got for Keir Starmer was a splattering of glitter, hurled by an inaudible activist. Oh, how the PM wishes for some political sparkle today.
It is nonetheless worth injecting some reality into the current media formula: for the angry briefings and petty scandals of recent days will not, in and of themselves, define Keir Starmer’s premiership. The question of what will is of course far more nuanced — and yet tangibly central to the government’s actions and messaging even now.
The quintessential Labour pitch, which Starmer rehearsed relentlessly at the election, is that Britain is broken and requires fundamental change. In the end, this argument rang true for enough voters that they either opted to back Starmer’s party or, crucially, refused to back the Conservatives.
At the same time, Starmer and his trusty Treasury sidekick, Rachel Reeves, argued that Labour would shun frivolousness when it came to government spending. Armed with her fiscal rules, Labour’s “iron chancellor” (a moniker the shadow Treasury team sought to actively inspire) worked ruthlessly to co-opt the Conservatives’ mantle as the party of fiscal responsibility.
At every turn in opposition, therefore, Starmer and Reeves extolled — with ironic immoderation — their enthusiasm for balancing Britain’s books. Accepting the framing that Truss-esque fiscal loosening makes markets quiver, Labour penned itself in, ruthlessly conducting rearguard action to dispel exposed policies (Ed Miliband’s plan to invest £28 billion a year into clean energy stands out in this regard).
Labour, naturally, is exposed to accusations of profligate tax and spend — those twin spectres of left-wing mythology. And so Starmer constructed his castle of fiscal prudence high indeed. It meant no Conservative assault from 2022-2024 (and there were many) successfully breached Labour’s fiscal fortifications. But every battle saw Starmer scale higher still — as Labour spokespeople preached in loftier and loftier language about their party’s unimpeachable economic probity.
In hindsight, this fault line can be regarded as the defining political debate of the last three years. Indeed, if any success can be attributed to Rishi Sunak’s stay in Downing Street, it is that he helped propel Labour into a corner on economic policy. It meant the Conservatives’ election attacks didn’t land (remember £2,000 of Labour tax rises?). But perhaps Sunak was playing the long game — a feat seldom achieved in his otherwise vacillating premiership.
And in government, despite Tory predictions, Starmer has refused to curtail his fidelity to a rigid fiscal regime. In fact, after Reeves’ theatrical revelation of a £22 billion “black hole”, Labour’s purse strings interlace even tighter than anticipated.
And yet, already, we see the political cost of Labour’s economic framing.
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Three months ago, Labour won the general election. The specific reasons voters swung behind Starmer are manifold and complicated — but one of the crucial motivations was that they believed he was serious about delivering “change”. Starmer appeared “serious”, in part, because he neither over-promised, nor pledged to turn on the spending taps once elected. (This was a lesson learned from 2019 — when voters wanted change, but disbelieved Jeremy Corbyn’s promises on economic grounds).
In government, however, Starmer’s winning formula has begun to eat itself. As prime minister, he intends to maintain — even strengthen — his party’s fiscal stance as developed from 2020-2024. But in doing so, he is failing to establish a more meaningful platform than that of economic prudence.
“Stability is change”, was one of Labour’s many slogans in opposition — and one of its most effective. The problem, when it comes to public services, is that simple stability can’t intrinsically deliver the change Britain voted for in July.
And so we arrive at Starmerism’s central challenge: Labour cannot “credibly deliver change without spending money, and they can’t credibly spend money without raising taxes.”
“Raising taxes is unpopular”, Rob Ford, Professor of Political Science at the University of Manchester, adds. “But so is failing to deliver improvements to a collapsing public realm. … Labour have made, and in large part won, the argument that Britain is broken and needs fundamental change. But there is a glaring disconnect between that [argument] and the small potatoes the incoming [government] is currently offering as its [programme] for change.”
It is as neat a summation of Starmer’s dilemma as I have read since the election — and there has been no shortage of Starmer dilemma summaries in recent months. The Economist’s Duncan Robinson was similarly impressed. He refers to Ford’s comments as comprising Labour’s “Credibility trap”. “The more credible [Starmer tries] to appear”, Robinson explains, “the less credible you sound.”
This, effectively, is the circle Starmer must square in government. And at this dilemma’s epicentre lies an additional totemic inquiry. As former Blair adviser John McTernan asks: “What is the project of the Labour government?”.
In the end, this is a question that Labour conference — the party’s first in power for fourteen years — should almost necessarily, even accidentally, answer. But when the Labour machine rolls out of Liverpool on Wednesday, I fear political discourse will remain just as bereft of clues as when the first red balloon was suspended from the ACC conference hall ceiling.
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The question as to who really runs this Labour government is ubiquitous at present. Broadsheet conspiracists say Sue Gray, others opine on Angela Rayner’s influence — and still more submit Reeves’ centrality. But the real answer, which in turn explains the ubiquity of the stated question, is no one.
Authority in this Labour government lies not behind the throne with Gray — but on Rachel Reeves’ Treasury desk. It is the government’s “iron” fiscal rules, not its supposed Svengali, that should really concern Westminster’s scoop-chasers. Labour’s rule on debt, as Robinson implied over the weekend, is today the true agent of government — and therefore chaos.
Now, this amounts to a significant political problem for Labour: Starmer, after all, can sack Sue Gray. But does he possess the political will/strength to take a revising pen to Reeves’ oaths? At this most early juncture in Starmer’s premiership — when a PM should in theory be at the peak of their powers — he does not.
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Lunchtime briefing
Winter fuel payment cut was ‘right decision’ — Rachel Reeves’ speech to Labour conference
Lunchtime soundbite
‘I know that not everyone in this hall or in the country will agree with every decision that I make. I will not duck those decisions for political expediency, not for personal advantage’
— Rachel Reeves doubles down on her decision to cut the winter fuel allowance in her keynote Labour conference speech.
Now try this…
‘Rachel Reeves is running Britain really’
Politico’s Esther Webber writes that, behind the scenes, decisions on Labour’s agenda are being dictated to a great extent by the Treasury. (I almost agree, as per the above).
‘Starmer and Reeves must articulate the government’s purpose’
Former Blair adviser John McTernan writes for the Financial Times. (Paywall)
‘Operation here we go again: How Labour is already preparing for the next election’
PoliticsHome’s Tali Fraser reports.
On this day in 2022:
Labour says equalities minister ‘should not be in job’ after alleged LGBTQ comments
