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Former Labour Treasury Minister Says "Power Not Money" Is Needed For Change

Keir Starmer and Angela Rayner (alamy)

5 min read

Former Treasury minister Liam Byrne has said that Labour leader Keir Starmer and Shadow Chancellor Rachel Reeves would have a “challenge” ahead to convince the electorate that life would be different under a Labour government, but that “power” would be more important than simply spending more money. 

Byrne is the Labour MP for Birmingham Hodge Hill and was Chief Secretary to the Treasury under Gordon Brown’s government between 2009 and 2010. 

“Sometimes you can make big change happen with power not money,” he told PoliticsHome. 

The former minister notably wrote a message to his Liberal Democrat successor David Laws after Labour lost the 2010 election, in which jokingly wrote: “I'm afraid there is no money.” The note has since been repeatedly used by the Conservatives to undermine Labour’s economic credibility. 

“If you go back to where we started this year, with the launch of Gordon Brown's commission on devolution, shifting power out of Whitehall to regions will dramatically change the way regions can become masters of their own destiny," he added. 

Byrne ran unsuccessfully to become the Mayor of the West Midlands, which he lost to Conservative candidate Andy Street – he has since been found guilty of misusing public expenses in his campaign. 

David Cameron with Byrne's note
Liam Byrne's infamous note has been used by the Tories to undermine Labour for more than 13 years (Alamy)

However, he has remained committed to the idea that greater devolutionary powers would enable a Labour government to deliver on net zero pledges and deliver change across the UK. 

He said he would like to see Labour mayors and the Labour Welsh government write “half the manifesto” as they have experience governing and implementing projects in their regions.

“Something like going green is really quite complicated, the notion that you can centrally plan that from Whitehall is crazy, you've got to get power out to the regions,” he told PoliticsHome. 

"Go back to Labour’s 1945 manifesto, most of the ideas in that manifesto were pioneered by Herbert Morrison in the London government, so Labour has traditionally always learned a lot from what we do in local government.

“With Labour mayors, you're beginning to see some quite significant political leadership at a local level. Frankly, I would be really happy if the mayors and our colleagues in Welsh Labour wrote half the manifesto because they've been governing for some time, they've been having to make progress in the teeth of Tory opposition to almost everything, but crucially, they've not been empowered with the resources that they could.”

Last week, Labour regional mayor for Liverpool Steve Rotheram announced that buses will be back under public control, following the lead of Greater Manchester mayor Andy Burnham, who pioneered the change in his region that has been implemented this year. 

Byrne argued that such projects showed that the central Labour government could learn lessons from regional governments. 

“We should just be handing money over as block grants, because local politicians have got much better ideas and don’t change every ten minutes like ministers do in Whitehall,” he argued. 

Byrne spoke to PoliticsHome at Labour conference ahead of Reeves’ speech, in which she will promise “once in a generation reform” and to “get Britain building”.

Describing Starmer as someone who has always said “trust the process”, Byrne said that in his view, Starmer and Reeves should run an election campaign based on “security”.

"Now he’s at the pre-election stage and he's got to tell that story about how life is going to be different.

“In 1997, the country was very optimistic, slightly bullish about what could be done. Now, it's really different because everybody is so exhausted after 13 years of austerity, that actually expectations are quite low, so Keir has got this really challenging balance act to pull off, he's got to be able to show direction, he's got to be able to show how that is a return to common sense for our country, he's got to paint a picture of how life will be different.

“But he's got to keep it within the bounds of what people think is possible.”

Byrne said it was more important than ever that Labour shows they have ideas on how to secure growth and also how that growth will create security and “good jobs” for British people. 

“So, just being able to kind of tell those stories about where future growth is going to come from is incredibly important,” he said.

The former minister added that he thought the leadership were making “quite forensic choices on raising taxes”.

“I suspect you'll hear a little bit more about that over the next weeks and year about some of the tax reliefs which have benefited the very wealthy and are just not justified in a world of tough choices,” he said, adding that he thought Labour should learn “Bidenomics” and “crowd in private investment”.

Deputy national campaign coordinator Ellie Reeves told PoliticsHome ahead of conference that Labour’s green agenda would be a clear “dividing line” between Labour and the Tories, as some have criticised Labour for not setting out enough distinctive policies from the government. 

However, Byrne felt “dividing lines” was not the the right way to frame this strategy, as he believed the Tories would try to create “fear, anger, outrage and scapegoating” ahead of the next general election – a trap which in his view, Labour should not fall into.

“I've always been a politician who's a little bit wary of ‘dividing lines’, because right now what our country feels like it needs is to come together,” he said.

“And so dividing one group of voters from another, I don't think necessarily gets you where you need to, but you have got to frame choices.

“If you've got the Conservatives now determined to play the politics of loss aversion, and literally making up costs, they are really scraping the barrel. What comes through to voters is these guys have just got no plan for the future.

“Ultimately, there is a choice of two paths ahead of us. And they just just gotta kind of frame the path that we're proposing as a return to common sense, after years of madness from the Conservatives.”

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