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Starmer might see himself as Blair 2.0 but don’t expect a radical Labour government

Tony Blair and Keir Starmer (PA Images / Alamy Stock Photo)

Aaron Bastani

4 min read

Over recent decades it has become commonplace for politicians to underscore their radical credentials.

In 2009 David Cameron declared he wanted “nothing less than radical decentralisation”. Addressing his party’s spring conference two years later, Nick Clegg proclaimed it was in fact Liberals who were “the true radicals of British politics”. Meanwhile, in 2019, Jeremy Corbyn claimed Labour’s manifesto was the “most radical and ambitious” in decades.

With Keir Starmer, the argument goes, this tendency has been inverted. But while appeals to radicalism are absent, underneath the Gordon Brittas exterior is someone offering a break with the status quo. Starmer may not be deploying radical rhetoric, but it is precisely that which gives him permission to deliver change. It’s an appealing premise, particularly for those who recognise the demands of electoral expediency, but who also grasp the scale of what is required to address challenges such as inequality and climate change.  

So how radical would a Labour government actually be? The most substantial indicator is the party’s approach to fiscal rules. For all the bashing of Jeremy Hunt by Rachel Reeves, little divides the two. Labour would borrow to invest on capital expenditure – unlike the Tories – but they are also committed to reducing the national debt as a percentage of GDP over a parliamentary term.  

The primary difference, therefore, is how to spend the proceeds of growth. In the past, when economic expansion was the default, that was reasonable. But given the United Kingdom has struggled to generate per capita growth since 2008, it means the primary issue – the country’s economic model – remains neglected. So for Labour to be ambitious with funding public services, the productivity puzzle has to be solved. And yet it is barely mentioned. 

Take the green prosperity fund. The initial ambition was to spend £28bn a year, every year, as part of state-led decarbonisation efforts. Now, the aim is to gradually increase investment, reaching £28bn a year after 2027. And the source of that funding? New tax revenues from growth. The same applies for other potential commitments, such as scrapping the two-child benefit cap. If there is enough growth, and sufficient tax receipts, a Labour government would be bold. But that’s a big “if”.  

Between Labour’s fiscal rules, and an increasingly volatile global system, hopes for a bold agenda seem misplaced

Where will this growth come from? New foreign investment responding to a credible government is one reply. Another is planning reform. But who seriously believes Barratt estates on the green belt – however desirable – will generate tens of billions in additional taxes? Or that a well-coiffed PM guarantees multi-million pound investments from overseas? In its own way, such a proposition is as outlandish as anything uttered by Liz Truss. 

Compare this to the Biden administration. It views state-led industrial policy as critical for economic renewal, with the Chips Act directing $52bn (£42bn) of subsidies towards semiconductors, and the Inflation Reduction Act costing $550bn (£451bn). Joe Biden is no green revolutionary, but he has displayed far more ambition than anything from Europe’s social democrats – including Starmer. 

Labour’s presumption that growth will magically return also implies the crises of recent years will abate. But why? Just as likely as a return to low energy prices is a confrontation with China – and more inflation as a consequence. Under conditions of low growth and relatively high inflation, distributional conflicts will persist. That is true whoever occupies Downing Street. 

So between Labour’s fiscal rules, and an increasingly volatile global system, hopes for a bold agenda seem misplaced. Tony Blair 2.0 might be the aim, but the fundamentals of the economy are poles apart from the mid-1990s.  

Expect radical impulses to shift elsewhere – perhaps towards a constitutional overhaul, including Lords reform. While those closest to Starmer remain ambivalent on the matter, it may be the only significant legacy he can aspire to. Either that or he gets serious about the roots of Britain’s malaise: no industrial policy, inadequate infrastructure, and a political class indifferent to wealth creation beyond the M25. But that means making some powerful enemies.

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