Why Labour will pay high price for pursuing Tory policies that broke Britain

Yet the party can perhaps take some comfort, in these dark days, from the mounting evidence that they are not alone in the centre-left doldrums; and that for all Labour's talk of “change”, during the general election campaign – and for all Sir Keir Starmer’s obvious sincerity in wanting to rebuild a better and fairer Britain, after 14 Tory years – they already seem almost as confused about how to achieve their policy goals as the SNP do, after 17 tough years in government.

One one hand, the Prime Minister’s Downing Street Rose Garden speech on Tuesday was replete with symbolism – the garden once used by corrupt Tory elites for illegal lockdown parties now “back in your service” – and with rhetoric about the need for radical change. Sir Keir declared that “we can’t go on like this any more”, that “things will have to be done differently”, and that he would “fix the foundations” of the UK, even if it took him a decade.

Yet behind the rhetoric – as many were quick to recognise – there appeared to be little apart from dire warnings of further years of austerity to come as Sir Keir and his Chancellor Rachel Reeves “put the public finances in order” according to old neoliberal rules, which – quite wrongly – see most public spending as a dead loss to the economy, to be minimised wherever possible.

Obscene wealth

The absence of a clear plan for reaching better times, and a road map of how and when improvements might begin to emerge, was notable and slightly heartbreaking, in a speech that lasted almost 20 minutes; and as striking was the speed and articulacy of the damning response from many Labour-sympathising commentators and economists who do not see public spending in the same negative light, and broadly accept the argument – made so powerfully and successfully by John Maynard Keynes, three generations ago – that where government spending and investment is clearly in the interests of a healthier society and economy, it is reasonable for a sovereign government to print or borrow the money to make that investment, in the confident hope of a rapid and substantial return.

Hence the disappointment and despair, this week, of many left-leaning economists and commentators including Professor Danny Blanchflower, who immediately raised some telling questions about what expert opinion the Starmer government consulted, or what cost-benefit analyses they carried out, before deciding to apply this latest round of austerity.

Indeed, it is now difficult to dispute Blanchflower’s view, and that of others like him, that the austerity of the past 14 years has solved none of the UK’s problems, but has instead racked up ever-increasing, long-term costs in the burdens of poverty, inequality and chronic ill-health the nation now carries, while inflicting unconscionable pain and stress on some of the poorest and most vulnerable, and leaving the wealth of the wealthiest to rise to ever more obscene levels.

Thatcherite mantras

Yet Sir Keir’s proposal in this crisis, some aspects of which he so clearly sees and describes, is to begin the process of “national rebuilding” by raising his baseball bat and continuing to smash away at the same joints and muscles of social provision and solidarity that Tory policies have so damaged, over the decades. The confusion within his government is so great that he even has his Chancellor Rachel Reeves calling the Scottish Government as “as guilty” as the Tories, for making public sector pay settlements similar or identical to those her own government has made over the last two weeks.

And many supporters are simply baffled by the sight of Labour leaders who seemed, just a few short weeks ago, to understand the force of Keynesian arguments about the need for public investment, now repeating those same old discredited Thatcherite mantras about household budgets, and about balancing the books through cuts, as if Keynes had never lived.

Fresh hope for SNP

There are, in other words, plenty of open goals and yawning gaps in Labour’s thinking of which the SNP may be able to take advantage, if they play their political cards well over the next 18 months. The truth about Labour is that in pursuit of whatever modest social democracy the financial rules still allow, they now hope to do many things that the Scottish Government has already done, under similar constraints; the risk they run in Scotland is therefore that in damning the SNP, they will end up damning their own policies.

And the risk they run across the whole UK is that in embracing the language of neoliberal orthodoxy, they are missing their biggest, most exciting chance – in these early months of government – to truly begin that change of which they spoke; to reinvest in our bruised and battered communities, to challenge conventional measures of growth in favour of more sustainable and humane goals, and to set out our path towards new economic systems and structures that might actually give us a future.

On July 5, they had the room for manoeuvre, and the political capital, to begin that vital process. Yet already, their own economic language and decisions have narrowed their options, sown seeds of conflict in their movement, and dimmed the hope of better times, in ways that may already be producing at least some ‘buyers’ regret’ in those who voted for them; not only here in Scotland, where we still see two centre-left parties locked in the tightest of electoral races, but across the UK as a whole.