Blair has shone a spotlight on Starmer’s growth delusion

Looking to Sir Tony Blair for policy specifics has always been a waste of time — like looking at a painting by Turner and complaining you aren’t being given photorealism. Blair’s genius, back when he was in government and now, has always been his ability to see and articulate the big picture.

When he came into office, and made Alan Milburn a junior minister, he did so with the simple instruction that “we need a health policy”. He didn’t sit and devise the detail of what became New Labour’s health policy, but he grasped the broad outline of what they needed. 

When Blair talks about his party’s present difficulties, a similar dynamic is at work. On the big picture, he is surely correct: Labour are in trouble because they did not think deeply enough in opposition, and in government they have talked a great deal about being pro-business while being precisely the opposite.

This is bad for the country and for their election prospects, not least because if we don’t see significant economic growth pretty soon then the second half of this parliament will be even more painful for Labour than the first.

What is missing from Blair’s criticism of Sir Keir Starmer is any acknowledgment of his own good fortune in becoming prime minister after Margaret Thatcher and John Major, rather than in the wake of the long procession of failed prime ministers Britain has had since David Cameron lost the Brexit referendum. Starmer’s Labour inherited a dishevelled public realm — a problem that it is well within its comfort zone to fix — but also a tax system badly in need of reform and an economy growing sluggishly. Neither issue is Labour’s natural focus.  

As a case in point: a couple of months ago, a Labour minister told me that they thought Canary Wharf in London’s Docklands was “corporate” and “hollow”. This took me somewhat aback, I have to admit, because the context was me saying that I had grown up close to there. (I did not reply by saying I had always thought the part of the country they represent was grasping for subsidies from the capital, but I nearly bit my tongue in half in avoiding doing so.) 

The remark was doubly surprising because I was under the impression that the Labour government’s number one priority was growth. Yet here was someone who had become a minister of state, but whose first thought about a place that is a hub for both financial services and the life sciences — two sectors at the heart of Britain’s comparative advantage economically — is that it is too “corporate”.

I shouldn’t have been shocked, however, because Labour’s commitment to growth comes with a dizzying number of caveats. This is not an exhaustive list, just those I have noticed: Labour’s number one mission comes with the proviso that it be “felt across the nations and regions”; that it be “inclusive”, “green” and “good”; that it not rely on immigration and not be too concentrated in the core cities. I’m sure there are more. 

The Blairite argument was always that the Conservative victories of the 1980s were avoidable with the right choices — that Labour governments could have pursued both the turnaround in public services they presided over from 1997 onwards and the economic transformation wrought by Thatcher and Major. As Blair argued in his final conference speech as prime minister, the old forced choice between efficiency and compassion had been shown to be a false one. 

But the Starmer government has shown that, in practice, it can’t make that call. Even when Labour talks about a “hard choice” on the economy, that choice involves cutting government spending — reducing someone’s benefits, say — rather than changing who it taxes and how. Faced with a country visibly needing both an economic turnaround and an improvement in public services, this government’s instinct is to make the former harder in the service of the latter.

It should have been obvious long before Labour took office that you cannot have a state that meets the desires of the many paid for by increasing taxes on the few. As well as inheriting a state that did not meet the requirements most British people have of it, they inherited a tax base too narrow to fund it. What is more, taxation was already starting to sap the UK’s growth and competitiveness. But although that insight is one you can find within the Labour Party, it is not one that has been a central feature of Starmer’s government. And nor will it be central to the government of whoever replaces him. 

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