Achi news desk-
Britain’s general election is expected to take place this year, and given his desperate vote, there is speculation that Prime Minister Rishi Sunak could be rolled by his party before he even pulls the trigger on the campaign.
Labor is sitting pretty, with leader Keir Starmer almost certain to inherit the keys to 10 Downing Street. So what can we expect from the Starmer government in office?
After party members initially promised he would uphold much of previous leader Jeremy Corbyn’s anti-austerity manifesto, Starmer led the way to win the leadership, ruthlessly eradicating the influence of the left, asserting his faction’s dominance and walking crabs away from various progressive commitments.
Some on the left are desperate. Guardian Columnist Owen Jones, for example, publicly tore up his Labor membership last week after 21 years of pleading loyalty. His decision, he wrote, was reached after “a gradual, painful process of realizing that the party will not even do the bare minimum to improve people’s lives, or to tackle the crises that have led Britain to disaster; and that he will, in fact, make war on anyone who wants to do either”.
At the same time, many pounced on reports that shadow chancellor Rachel Reeves was to compare herself to Margaret Thatcher in a lecture to business executives. But the speech itself is hardly a tribute to the Iron Lady, or even her Labor offspring Tony Blair.
Indeed, Reeves rejected Britain’s neoliberal experiments, under the Conservatives and Labour. But he did not express a post-war rediscovery of social democracy, nor Corbyn’s left-wing populism. Her vision, instead, borrows elements from her Anglo-sphere counterparts in Jim Chalmers and Janet Yellen, with a drop of pessimism in common sense.
It is as informative a blueprint of how Starmer’s cabinet will govern as we are likely to see before election day.
Neoliberalism goes…
In some ways, Reeves’ speech seemed aimed more at supporters of Labor unions than the business community. Despite the unreconstructed Blairite Lord Peter Mandelson urging her to weaken Labour’s commitment to industrial relations reform, Reeves stood firm on her New Deal for Working People. It includes abolishing zero-hours contracts and guaranteeing full rights to all workers from day one, including protection against unfair dismissal, sick pay and parental leave.
He also expressed a more active role for government in the economy, including through industry policy and (limited) public ownership. Labour’s plans include a National Wealth Fund, publicly owned Great British Energy, and the renationalisation of the railways as private contracts expire.
The only similarity with Thatcher was a desire to overhaul uneven economic stasis into something more ferocious. In substance, it sounded more like Bidenomics.
…But austerity remains?
But here’s the catch — Reeves also committed to strict fiscal rules set by the current Chancellor, Jeremy Hunt, who are trying to balance the Treasury’s checkbooks. Since the New Statesman Freddie Hayward wrote, “The decision puts pressure on Labor to deliver immediate economic growth. This is because [absent such growth] the spending cuts the government’s fiscal rules suggest are brutal.”
The Guardian’s Will Hutton noted that Reeves was not technically committed to all the government’s rules – she would only be trying to balance spending and revenue “on a day-to-day basis”, reducing certain public investments.
However, agreeing to cut the national debt within five years already appears to limit Labour’s spending commitments. Reeves recently dropped the party’s flagship £28bn green energy plan, promising to unlock billions of private investment instead.
James Meadway, economist and former adviser to Corbyn’s shadow chancellor, John McDonnell, so drawing Reeve’s vision as abandoning neoliberalism but retaining austerity. The government would impose costs on companies (higher wages) and encourage them to invest in desirable areas such as renewable energy, but it would not spend too much itself.
More pessimistic, writer Keir Milburn he wrote that “the emerging Reeves agenda looks like social democracy for capital (industrial policy) and austerity for the rest of us”. Others called it “Bidenomics without the money”.
More Scottish than Thatcher
All this will sound familiar to Australians. Anthony Albanese’s government has also prosecuted industrial relations reforms and tried to steer private investment into green technologies. He has even modestly expanded some social programs such as childcare, while Reeves and Starmer have promised only the most urgent repairs to unwieldy institutions such as the National Health Service.
But amid higher inflation and a pending lack of revenue, both Lab(u)r parties are counting their pennies sparingly. Since Biden is freer from debt financing, neither party has the guts to begin tax reform to fund much-needed social spending… yet.
But for parties whose raison d’etre is expanding social welfare, not controlling decline, reckoning is close. As our societies age and the climate warms, spending pressures will only rise. If Chalmers leads, Reeves may follow. Just as Australian Labor inspired British Labor’s small turn to government, it should lead the way out.
