Alex Snowdon on Tory cuts dressed as Labour remedy

It is a remarkable fact that, less than two months after forming a new government, Labour’s honeymoon appears to be over already. Polls indicate a sharp decline in approval ratings for Keir Starmer personally and for his government. A number of contentious flashpoints have emerged very quickly, generating a backlash. This is against the backdrop of an election victory where a landslide majority masked a relatively poor popular vote.

It struck me as ironic that the Daily Mail tried to whip up controversy over Starmer removing Margaret Thatcher’s portrait from 10 Downing Street. This is at a time when Starmer is proving controversial precisely because of his reluctance to break from Thatcher’s legacy. Thatcher once remarked that Tony Blair’s premiership was her greatest achievement. She meant that New Labour confirmed the long-term political shift rightwards that Thatcher, the great ruling class warrior, had pioneered.

This never meant that the governments of Blair and Brown were identical to the Tories. There were some small concessions and reforms that would have been far less likely under the Tories, but the general trend was one of embedding the neoliberalism associated with Thatcher and her Tory successor John Major.

Privatisations were not reversed, while outsourcing and private finance initiatives became widespread. Levels of inequality barely shifted, the stigmatising of ‘welfare’ became normalised, and the Tory attacks on workers’ rights and trade unions were left intact. Foreign policy was dictated by total subservience to Washington.  

The long-term decline in Labour’s vote only makes sense in this context. 13.5 million votes in 1997 represented a real popular base of support for Labour. The 9.7 million votes in July – following 14 years of Tory disasters – represents a serious decline. It is partly the legacy of New Labour’s limitations during 13 years in office. It is also because Starmer’s version of Labour fails to enthuse people who want something very different from Tory austerity.

Labour offered relatively little in its election campaign, keeping expectations low. Yet it has still managed to disappoint many of its supporters over the summer. Its few modest changes – a pay rise for many public sector workers, for example, or dumping the anti-union Minimum Service Levels – have been heavily outweighed by moves in the opposite direction.

There are a couple of notable patterns here. One is a growing commitment to austerity. An early sign of trouble ahead was the King’s Speech debate where an amendment proposing to lift the two-child benefit cap was defeated. When that happened, the dominant argument (off the record) was that it was merely a matter of when, not if: the cap would be lifted, but just not yet. This is looking increasingly dubious, as the rhetoric about cuts is ramped up in advance of the autumn budget statement, by chancellor Rachel Reeves, in late October.

The cancellation of winter fuel payments for millions of pensioners was another key indicator. The really amazing thing, though, was the announcement days later that energy prices would be rising. The combination of these two announcements in such quick succession – removing financial support towards fuel bills, while those very bills go up – suggested either a staggering lack of political nous at the top of government or that they simply don’t care.

It is also politically dangerous for Starmer because rising energy costs was precisely one of the things that cost the Tories heavily. Halting that rise was meant to be one of the features of a Labour administration.

Telling tales to justify cuts

Key narratives have also been developed to justify this new austerity. One is the ‘black hole’ story – the Tories supposedly left the public finances in an even worse mess than realised. There is little credible evidence, though, that things are any worse than senior Labour figures knew about already.

On Tuesday, Starmer claimed that the government has ‘no other choice’ but to make cuts – an echo of Thatcher’s mantra ‘There is no alternative’. Yet there are always choices and there are always alternatives. A major part of the government’s mission is to exclude any consideration of tax rises on the wealthy – corporation tax, capital gains tax, the top rate of income tax, one-off wealth taxes – from public debate.

These ‘black holes’ and ‘no choices’ stories are supplemented by an old favourite – the idea that the national economy is basically identical to a household economy. We can only spend what we already have. This doesn’t entirely make sense on its own terms because households do borrow (that’s what a mortgage is), but it definitely makes no sense at the government level, as numerous mainstream economists are currently pointing out.

There is also the ‘things will get worse before they get better’ narrative. But if you genuinely want long-term improvement, it makes far more sense to at least begin heading in the right direction by making some small improvements now. The mounting talk of ‘billions of pounds of cuts in public services’ – rumoured to even include health and education – in October’s budget statement do not bode well. This coincides with an ongoing unwavering commitment to spend more on the military, the one area that seems to be protected from speculation about cuts.

Another striking pattern is the total lack of ambition from Labour’s front bench. One consequence of the election result is a real sense that a new kind of political space is opening up. With the Tories finally booted out, there is at least the possibility of government taking big initiatives that change particular areas of economic or social life. From trade unions to think tanks to pressure groups, calls are being made for fresh and ambitious approaches. Yet there’s little sense that the government is listening.

Sorting out the crisis of our waterways is one example. There will be a major demonstration in Parliament Square next month because campaigners don’t have confidence in the new government to end the pumping of sewage into rivers, lakes and the sea by privatised water companies. Public support for nationalising the industry is at a high level. Another example is housing, where Labour’s plans are utterly inadequate to the challenges we face. Labour has a deep aversion to the levels of investment – whether in housing, public transport, the green economy or any area of infrastructure – that we actually need.

Labour is trapped in a very narrow, technocratic way of doing politics. Anything genuinely ambitious is excluded from its options. A revealing example before Labour even took office was when (in February) it dumped plans for £28 billion of green investment. In an era of climate catastrophe, capitalist crisis, pandemics and war, more than just tinkering with surface details is needed. At the moment it isn’t even clear that there is much tinkering.

For the left, the trade unions and anti-austerity campaigners, the most immediate priority is ensuring that Reeves’ expected cuts on 30 October are heavily contested. That starts with mobilising for the People’s Assembly demonstration at Labour Conference on 22 September. This must go together with popularising the arguments against a new round of austerity and articulating alternatives. Starmer and Reeves are determined to convince everyone that there is no alternative. We shouldn’t let them get away with it.