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Will Labour No Longer Be The Party Of Big Spending?

Ben Riley-Smith, Camilla Turner, Daniel Martin

March 2023

In a speech, the Labour leader has argued that his party is ready to govern again, criticising the “sticking plaster politics” of recent years and promising a plan for “a decade of national renewal”.

Sir Keir’s message is designed as a break from the Jeremy Corbyn era but may also be seen as marking a different approach to Gordon Brown, whose Treasury minister joked in a note when leaving office in 2010 that “there is no money left”.

His speech came the day after Rishi Sunak gave the most detailed vision for his premiership to date, gambling re-election on the delivery of what he called five “promises”. The PM vowed to halve inflation this year, get the economy growing again, reduce NHS waiting lists, pass a law to reduce migrant Channel crossings and bring down government debt.

The two speeches, on the site of the London 2012 Olympic Games and coming less than 24 hours apart, set out the contours for the race to the next general election, expected to take place in 2024. Sir Keir – who has reached for the centre ground since becoming Labour leader in April 2020 – will issue a clear rejection of the party’s old vision of big-state socialism.

He said: “Let me be clear – none of this should be taken as code for Labour getting its big government chequebook out again. Of course investment is required – I can see the damage the Tories have done to our public services as plainly as anyone. But we won’t be able to spend our way out of their mess. It’s not as easy as that.

“There is no substitute for a robust private sector, creating wealth in every community. A new approach to the power of government. More strategic. More relaxed about bringing in the expertise of public and private, business and union, town and city. Using that partnership to drive our country forward.”

The Labour leader said his party “will announce these missions in the coming weeks” and that they “will be the driving force of the next Labour government”.

The message is designed as a repudiation of the economic approach taken by Jeremy Corbyn, but has wider echoes. New Labour promised to match Conservative spending plans for two years as part of their successful attempt to win power in 1997. Mr Brown increased spending after he took over from Tony Blair, and when Labour was voted out after a financial crash, Liam Byrne, then the chief secretary to the Treasury, wrote a letter to his successor saying “I’m afraid there is no money left” – a joke the Tories leapt on.

Ed Miliband’s defeat to David Cameron in the 2015 election came after he refused to say that too much had been spent during the New Labour years.

Elsewhere in his speech, Sir Keir said NHS crises have been like “an iceberg on the horizon … time and again it’s the same pattern. I call it ‘sticking plaster politics’.” He promised that “a fairer, greener, more dynamic country is coming and a transformed state and politics will take us there”.

Mr Sunak used his 3,000-word speech to detail his immediate priorities as well as his wider principles and hopes for reform. At its heart were his five ‘promises’, and he said: “No tricks, no ambiguity. We’re either delivering for you or we’re not. We will rebuild trust in politics through action, or not at all. So I ask you to judge us on the effort we put in and the results we achieve. These five promises are the people’s priorities. So they’re my immediate priorities, too.”

The pledges had varying degrees of specificity. The target to halve inflation is for the end of the year, and Mr Sunak said he wanted the return to economic growth to be achieved this year. Reducing debt is a medium-term promise, meaning it is hoped to be achieved over five years. Getting NHS waiting lists down has no timeframe, while the migrant boats pledge is only on passing a new law. The ambitions are broadly in line with current forecasts, but the decision is still a significant political gamble because of the uncertainty of external factors such as the Ukraine war.

Mr Sunak’s speech went far beyond the promises, however, outlining his big-picture thinking on areas such as the NHS, crime, the welfare system, social cohesion and immigration. The Prime Minister talked up the importance of protecting family life in all its forms, vowed reforms to get people off benefits and into work and again said he wanted to cut taxes when he could. On the immediate challenges facing Britain, he told under-pressure hospitals not to go back to the days of Covid lockdowns by cancelling operations.

He also called for “honest and open” dialogue with striking trade unions, saying he wanted discussions about the next financial year’s pay settlements. Mr Sunak also responded to The Telegraph’s revelation that he has shelved Liz Truss’s childcare plans, declining to say they would stay but arguing that the issue remains important to him.

Yet the challenge he faces to unite Tory MPs behind his plan was underlined when Nadine Dorries, a close ally of Boris Johnson, publicly criticised his approach.

Ms Dorries, the former culture secretary, tweeted: “Three years of a progressive Tory government being washed down the drain. Levelling up, dumped. Social care reform, dumped. Keeping young and vulnerable people safe online, watered down. A bonfire of EU legislation, not happening. Sale of C4, giving back £2 billion, reversed. Replaced with what?”

© Ben Riley-Smith, Camilla Turner, Daniel Martin / The Telegraph

Image - Sky News

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