Keir Starmer has always planned to conduct his leadership of the Labour party in stages. The first stage was focused on getting the party in order internally and then responding to the government’s handling of the Covid crisis with “constructive opposition”. From April to December, he put his allies in key positions, most notably with the quick installation of a new general secretary, while slowly ramping up Labour’s criticism of the government. Starmer’s speech on the economy signalled that the second stage of his leadership is now under way: presenting a vision for the future.
I know from conversations with his team that this shift was mapped out from the beginning, which means the speech delivered, virtually, from Labour headquarters was not a reaction to recent commentariat criticisms. And yet concerns that the opposition leader may be stalling made this intervention all the more important. Westminster will be asking whether the second phase of his leadership can stop focus groups from describing Starmer as “absent” and get opinion polls moving once again in Labour’s favour.
Starmer does an excellent job of scrutinising the government and deconstructing Boris Johnson’s decisions at prime minister’s questions every week. But the problem with focusing on competence is that it falls flat as soon as the government enacts a successful policy, as the Labour leadership is finding out. Everyone in the country, including Starmer, willed the vaccine rollout to be a success, and our wish has been granted – but this good news required a gear change. The speech on Thursday recognised that the opposition cannot simply highlight the flaws of those currently in charge.
For the first time, Starmer as leader detailed his view of the economy, from how it has been failed by the Conservatives to how it would be run under Labour. Tory ideology made the UK particularly vulnerable to the pandemic, and now offers only a “roadmap to yesterday”, he argued, whereas Labour would “protect families”. He drew dividing lines ahead of the budget, saying he would keep the universal credit uplift, end the pay freeze for key workers, prevent council tax rises, extend business rates relief and the VAT cut for hospitality and leisure, and renew the furlough scheme. It tied together the themes we’ve seen in Labour’s interventions over the past year: family, dignity, security, fiscal responsibility and long-term thinking.
Reports that this so-called “fightback” would represent a “policy blitz” were exaggerated. There were two new announcements today: a British recovery bond, which aims to support savers and raise billions for the National Infrastructure Bank; and funding for startup loans that would directly help to create 100,000 new businesses over five years. The former is based on the idea that Covid savings do not necessarily translate into a spending spree, as predicted by Sunak, and so the bonds could be used to fund the post-Covid recovery. They could ensure that not only key workers but also those who saved during the pandemic have a reason to back Labour, as they see returns on their investments. The second policy relies on the hope that small business could be “the engine of economic recovery”, while signalling to voters that Labour is now “unashamedly pro-business”, as Starmer’s head of policy recently put it.
Momentum, the leftwing activist group, heavily criticised the speech. The organisation said it “showed no ambition and little substance” and won’t be effective because Labour “can’t win in 2024 by promising to be better managers of the same system”. Some Starmer allies say there’s no pleasing this wing of the party, and he shouldn’t try. This ignores the fact that his leadership campaign succeeded precisely because he did win the support of these party members. But there was something for the left to like: running through the speech was a strong case for an active state, which is a positive way of getting across the anti-austerity argument that Labour has been pushing for years.
The address was welcomed by McDonnellites, and in fact Starmer’s rejection of the “build back better” slogan (he said the Tories “want to build back, but I don’t want to go back, we can’t return to business as usual“) was very similar to a speech delivered by the former shadow chancellor in July, when he said people want to “build better but not back”.
Labour MPs have been largely positive about the speech, with one telling me the recovery bond is “exactly the sort of thing we should be announcing”, and another saying the intervention was “great” though Starmer needed to “go further”. Some wanted more policy and bolder proposals: Jon Trickett tweeted the pillars of an “alternative economic speech”, including the need for a wealth tax.
Starmer faces competing demands from two audiences. There are the Westminster watchers, bored by politics after the tumultuous Brexit years, and weary with Labour’s careful tone after becoming accustomed to the bolder policies and messaging under Jeremy Corbyn. Then there is the wider public who keep up with only the big stories of the day. They may have found some comfort in Starmer’s support for extending the furlough scheme and universal credit, and Starmer’s description of inequality as both “morally bankrupt” and “economic stupidity” was refreshingly straightforward, but references to the Beveridge report are likely to have meant very little to most.
Starmer’s team is pleased with reactions to the speech. “Ultimately, this is Keir’s vision and argument. You can agree or disagree with it, but it’s authentic and it’s coherent,” one aide said. This may be, but simply telling the public that the next election should be a 1945 moment won’t make it so. Instead, the argument that the Tories left the UK exposed to the worst of Covid must be repeated ad nauseam, and Labour must find new ways of differentiating itself from the Conservatives. But, by starting to set out a vision for the country, Starmer offered a sound basis for phase two of his leadership plan.
• Sienna Rodgers is the editor of LabourList