The Guardian view on Labour and the economy: the legacy was grim but voters need hope, not excuses
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Version 1 of 2. The prime minister and the chancellor are running out of time to convince their own MPs that they have a plan to turn things around At the start of this month, Sir Keir Starmer initiated “phase two” of his government, with a view to turning its fortunes around. Then the deputy prime minister resigned over unpaid taxes. On the eve of a state visit by the US president, the ambassador to Washington was sacked over his friendship with a convicted paedophile, and this week a senior adviser to the prime minister resigned over offensive text messages. Those are just the personnel problems. The new phase is supposed to focus on policy delivery, but that is hard to achieve with a sluggish economy, sticky inflation and shrinking fiscal headroom. This week it was reported that the Office for Budget Responsibility expects to downgrade its estimates of UK productivity in advance of the budget in December. The knock-on effect would be to narrow the chancellor’s capacity for funding public services. The shortfall could be up to £30bn. Much of that will have to come from tax rises. Rachel Reeves’s last attempt to plug a fiscal hole with spending cuts led to a raid on benefits that had to be largely aborted to quell a mass rebellion of Labour MPs. The government still intends to find savings in that area. It is the unenviable job of Pat McFadden, the new work and pensions secretary, to find a way that doesn’t reignite backbench fury. Even if Ms Reeves succeeds in bringing restive Labour colleagues on board with her budget, she will face a ferocious onslaught from opposition parties and rightwing media for raising taxes. She will be accused of reneging on promises not to burden “working people” with higher levies, even if she adheres to the letter of the manifesto commitment not to hike income tax, national insurance, VAT and corporation tax. The government will blame its economic predicament on the Tories. It is true that Sir Keir inherited a public realm in disrepair, and wafer-thin margins for fiscal manoeuvre are partly a legacy of Liz Truss incinerating British financial credibility. But they are also a function of choices made by Ms Reeves in opposition. Now, 14 months after the general election, the public wants more evidence of improvement, and fewer excuses. Most people accept that it takes time to fix something that was very broken, but they need confidence that there is a plan; that leaders have a national destination in mind and a route map to get there. Failure to articulate such a thing has badly damaged Sir Keir. It doesn’t account for the full collapse in his poll rating since the general election last year, but the absence of an optimistic message has been an aggravating factor whenever there have been other setbacks. It has accelerated the decline in mood among Labour MPs from anxiety to panic. There are mutterings about replacing the prime minister if things continue on the current trajectory. It is not too late to stabilise the situation. A sustained absence of unforced errors and scandal would be a start. It would buy space in which to set out a credible offer of economic renewal, narrated with conviction as part of a wider story of national purpose. The ability to make such a case is a core competence in any prime minister. If Sir Keir cannot demonstrate it soon, he should expect his party to advance from doubting his leadership to seeking an alternative. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. |