THE Tony Blair leadership idolised by Labour’s current masters was often accused of spin over substance. The problem with the economic vision sketched out by shadow chancellor Rachel Reeves yesterday is that for all her high-flown rhetoric, they leave the main planks of Conservative policy intact.
Reeves pays lip service to the death of globalisation. But she does not propose any change in policy to address it.
The scale of the problems stemming from 13 years of Conservative “austerity” are set out in the Labour’s In-Tray report by John McDonnell and former Corbyn aide Andrew Fisher: undoing the immense damage inflicted by the Tories, repairing the school estate, plugging the staff shortages at the NHS and restoring workers’ wages to 2010 levels would mean around £70 billion in additional spending.
As they state, “without further redistribution of wealth, the argument that growth will be capable of paying for the significant investment needed in our public services appears just unrealistic.”
Reeves’s “fiscal discipline” will stop Labour from committing to the investment needed because she refuses to tax the rich. The class politics sorely lacking from Labour’s front bench was put by Unite’s Sharon Graham in her call for nationalisation of energy: the profiteers have been “filling their boots by picking the pockets of workers.”
Without control of our energy sector, a British government cannot seriously reduce energy bills, let alone plan the transition to renewables made essential by global warming, another game-changer cited by Reeves without the follow-up policy changes it should dictate.
Indeed, Reeves cannot even commit to ensuring the completion of the HS2 rail project dramatically ditched by Rishi Sunak last week, another key demand of the motion put forward by Aslef and Unite. All Labour will give us on that score is yet another inquiry into previous failures.
McDonnell and Fisher are correct that relying on economic growth to provide the revenues to raise wages and fund services won’t work. But the problem goes much deeper than that.
We are not living through the rosier economic outlook of the 1990s, where funding for public services could be increased without significant wealth redistribution.
Labour talks of encouraging business investment, but British companies have lagged other G7 countries on investing in the productive economy for decades: this is not simply a matter of Tory mismanagement.
It has more to do with the warped character of the British economy following relatively greater deindustrialisation than in any other rich country.
The biggest companies on the London stock exchange are, as Marxist author Jonathan White has explained, “overwhelmingly owned by investment banks and asset management funds who turn their portfolios over weekly rather than annually.”
The pressure for maximum extraction of dividends in the shortest possible timeframe has crippled huge companies and institutions of national importance, like Royal Mail. It renders businesses short-termist, uninterested in investment or the wages of their staff.
There is no way to fix this basic flaw in our economic structure without confronting the power of the City of London and the domination of our economy by firms with no interest in its long-term sustainability.
Reeves still worships at the altar of the banks: claiming “independence” (meaning lack of democratic accountability) for the Bank of England has delivered “long-term economic success,” when the period since can be divided into a credit-driven boom whose fragility was exposed by the crash of 2007-8, and a prolonged period of stagnation and falling pay.
We have learned from previous conferences that Keir Starmer will not be bound by decisions made by delegates. Unions’ interventions for different choices — beginning with the public control required to reshape the economy — are crucial, but as many have already recognised, these campaigns need to be taken to the streets of towns and cities across the land if Westminster is to be forced to start listening.
