The official blog of The Social Democratic Party.

Why Labour has no economic vision

Starmer's vague and uninspired economic platform is due to his party being broken at a fundamental level.

By: Matthew Kirtley

On Thursday, Keir Starmer gave what was supposed to be his most significant speech as Labour leader to date. Labour insiders eagerly claimed that this speech would mark a decisive moment for Starmer and the party – laying out the economic and political dividing lines for the March 3 budget, and the next 10 years of British politics. Labour’s press office went so far as to compare the speech to the 1942 Beveridge Report, which laid the intellectual foundations for the post-war welfare state.

Then, he finally made the speech, and we learned what Starmer’s supposedly bold vision was:

“Standing up against inequality, believing in the role of government, and that if you have government and business working together you can do more than what the Tories propose, which is just business and no government.”

Any anticipation leading up to the speech quickly evaporated. Commentators and the public quickly realised they were not being treat to a bold vision, but a series of platitudes.

The fact was that neither Labour nor the Conservatives had substantively disagreed on any of the above principles for decades. If they were there, Johnson or Sunak would have tripped over themselves to agree with everything that Starmer had put on the table.

Things only got worse as time went on. Starmer put forward what was – supposedly – an equally bold policy platform. He supported extending a furlough scheme, ending a pay freeze on key worker salaries, extending the business rate relief and VAT cut, and stopping cuts to universal credit. Then, to cap off this not-so-revolutionary policy set, Starmer proposed a “British Recovery Bond” that would sink costs incurred by the pandemic for decades. Sadly, this final point wasn’t as novel as he’d hoped – such a bond had been SDP policy since July 2020.

Apparently, this speech had been six months in the making. It was supposed to be Labour’s new call-to-arms. Yet, within hours, commentators from across the political spectrum were trashing the speech as vague and uninspired. It was even accused of verging on outright plagiarism of Conservative policy.

Many people feel confused and angry as to the performance of the Labour party. The Conservatives have been in power for eleven years: they first presided over a decade of austerity, and then over a response to the pandemic that has been roundly criticised from both the left and right. Boris Johnson’s disapproval rating has remained stuck above 50% since June 2020, and virtually the whole nation agrees that something has to change about business as usual.

Yet, the Labour party seems to fail at the fundamental job of being an opposition party: it’s unable to diagnose the failures with the ruling party, and it can’t seem to provide an alternative to the electorate. It has no vision.

Why? It’s tempting to suggest the reason why Labour has no vision is due to incompetent or unimaginative leadership. But there’s an alternative explanation, and one which is more powerful: Labour is structurally incapable of developing any vision.

Last year’s Labour Together report grimly pointed out that with the loss of Scotland, Labour’s survival would depend on a voting coalition between two groups:

  1. A “graduate class” of liberal-leaning voters in large cities
  2. A “traditional” working class of historic Labour voters in Britain’s former industrial heartlands

Labour must bring these two groups together to succeed. However, at the same time, it’s now near-impossible to reconcile their interests.

So far under Starmer, this has already been seen in the form of major internal conflicts erupting over what should be innocuous gestures like the use of the national flag in party media. While amusing, fissures like this are not superficial. They extend far beyond social and cultural matters, and into the domain of economics.

Broadly, outside of Momentum radicals, Labour’s graduate class is content with the Blairite arrangement of economic “centrism” mixed with a performative streak of social justice. By contrast Labour’s traditional working class base is broadly amenable to a robust social democratic state which seeks to safeguard their livelihoods, and better control the flow of labour and goods.

Ultimately these two positions cannot be reconciled in the long-run, which means that Labour’s voting coalition is doomed. Any clear economic vision would likely cause major revolts and split within the Labour party, with such a split damning the party to failure – whether it be through the Conservatives capturing the traditional working class, or through the Liberal Democrats taking the graduate class.

In a perverse way, then, Starmer’s speech succeeded. Because of the disparate coalition that makes up the party, Labour’s leadership must meander along with unambitious and vague platitudes. This is because only unambitious and vague platitudes can delay the destruction of the party.

Unwittingly, Labour has morphed into a large version of the Liberal Democrats – yet another party harbouring mutually incompatible beliefs which is unable to win a General Election.

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All Comments (2)

  • I would highly recommend Paul Embery’s book “Despised. Why the Morden left loathes the working class” to SDP members for an erudite examination of the rupture between the “Graduate class” and “Traditional” that Mathew highlights in his blog. Time to entice Mr Embery away from labour I think , William?

  • Once again with inequality labour always assume it is due to outside forces which can be changed by government ,some inequality is down to personal choices or cultures. Indeed a lot of working class supporters in their heartlands believe this and until Labour start believing in personal/ with freedom comes responsibility ,they wont win them back. And as for business ,if they cared that much about business they would not have campaigned for earlier,harsher lockdowns and would they surely would see that a prolonged furlough scheme will bring economic disaster. Companies have already undergone change (via online sales etc or diversified) in lockdown and some jobs wont be available when the lockdown ends.

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