One paradox of Keir Starmer’s government is that while many of its most important ministers and senior special advisers are either card-carrying Blairites or Blair-era retread appointments (or both), the government as a whole is largely anti-Blairite.
I don’t mean that those currently in power are reflexively hostile to the Blair government. Most aren’t. But for the most part, the best way to predict what Starmer’s government will do is to assume that it will zig where Blair’s government zagged.
Some of that is simply about the different times that the two governments operate in. When it comes to the criminal justice system, Starmer’s government is liberal where Blair’s was authoritarian. Still, that’s not because Shabana Mahmood, the current justice secretary, is an instinctive supporter of ‘soft’ approaches on crime, but because the last Conservative government didn’t build enough prisons, and so the UK no longer has the physical infrastructure to support Blair-era approaches on sentencing. Likewise, Starmer can’t be at the heart of efforts to reform the EU because David Cameron took us out of the EU by accident. And the last Labour government didn’t have to worry about having to go to war to defend Europe.
But some of it is about significant philosophical differences. Both governments are in a sense “centrist” but the accommodation Blairism represented was between rightwing economics and leftwing social policy, while this Labour party is reaching for leftwing economics and a traditionally rightwing approach to social policy.
Blairite centrism involved making the Labour party the natural home for voters who had done well out of Margaret Thatcher’s revolution and John Major’s economic model, but who felt concern about the cost to the social fabric. Starmerite centrism is about making the party the natural home for working age voters who feel economically insecure themselves but are uneasy about what they believe to be overly generous spending on support for the poorest, at home or abroad. They care most about Labour’s election promises to fix the NHS and not to raise income taxes, value added tax and national insurance.
What has happened is, simply, a historical reset for the Labour party. New Labour gave rise to the party’s longest and most electorally successful government by accommodating itself to an economic model that suffered one major blow in the financial crisis and another thanks to Brexit. Since then, the party has reverted back to many of the preferred methods of its pre-Blairite right, increasing trade union power, nationalising parts of the economy, and exerting further control over what businesses can and can’t do to their employees.
Labour’s controversial plan for welfare cuts illustrates the divide between the two. They are in part driven by expediency: the worsening economic backdrop means that in order to stick to Rachel Reeves’ fiscal rules, the government must either reduce spending or raise taxes. (Or, more accurately, do something that convinces the OBR it will reduce spending.)
The minimum wage, introduced by Blair in 1999 at a very low level, was accompanied by a reduction in payroll taxes and a series of direct cash transfers from government to the working poor via tax credits. Starmer’s government prefers to raise the minimum wage to among the highest in the OECD, pair it with an increase in taxes on businesses and a swath of new regulations on how businesses hire and fire. Moves like the renters’ rights bill are putting new, more onerous conditions on landlords.
The argument that many Labour people make in private is that reducing poverty via cash transfers proved to be an achievement that the Conservatives were able to easily undo when they came to power, whereas this is “rewiring” the economy so that it creates better paying jobs. The policy problem, in practice, is that government’s ability to “rewire” an economy tends to be limited in the extreme and they often do a bad job of it.
The political problem is that this ends up irritating absolutely everybody. Businesses are being asked to absorb a huge amount of additional costs while clearing new hurdles — and are chafing under the restriction. Meanwhile, when it comes to social policy, which is visibly the responsibility of the government, Labour seems to be saying “no” to everything, all the time.
Labour may have responded to the destruction of the economic model that underpinned New Labour by returning to its pre-Blair past. But Starmer should remember that the pre-Blair Labour party was usually unsuccessful, both economically and electorally.
stephen.bush@ft.com
