In his first piece of 2024, Patrick Diamond looks ahead to the next general election and, reflecting on two new important books on Labour's history, asks what the party is for and whether has the will and policies to bring about ‘a new age of hope'.
The 2024 general election is already being written off by the mainstream commentariat as historically insignificant. Indeed, to many the pre-election debate feels sterile, as if the main party leaders are in denial of the big choices head. The opposition Labour party is accused of being policy-lite. Unwilling to cede hostages to fortune, the leadership is said to be pursuing a callow ‘safety first’ strategy.
Without doubt, the economic context gives the political parties relatively little room for manoeuvre. With taxes at their highest level since the late 1940s and a ballooning debt/GDP ratio, no party can credibly promise to increase public spending, let alone deliver a drastic reorientation of fiscal policy. Whatever commitments are made to improve the growth performance of the British economy, the UK is constrained by powerful external headwinds alongside the legacy of past shocks, not least the 2007-8 crash from which labour productivity and private sector capital investment have barely recovered. The economists Anna Valero and John Van Reenen note that the UK economy is around a quarter smaller than it would have been had output per hour grown at the same rate after the crisis than it was in the decades before. In the meantime, the Conservative leadership has been compelled to mobilise ‘culture war’ issues while doubling-down on immigration policy to entrench a dividing line with the opposition. The strategy responds to the threat posed by a resurgent Reform UK party, yet runs the risk of alienating moderate centre-right voters.
Pessimists within Labour, of whom there are a striking number given the party’s sustained poll lead and imminent prospect of ending fourteen wilderness years in opposition, fear that as a consequence of its cautious electoral strategy, Labour will lack the mandate to enact radical policies. Unfavourable comparisons are made with the government of 1945, depicted by the historian Richard Toye in his new book, Age of Hope, as ‘the golden period’ of the Labour party in power. Critics lament that the party has no comparable agenda for the economic and social reconstruction of Britain. In his forthcoming book entitled A Century of Labour - which is being launched at the Mile End Institute next week - Jon Cruddas MP claims Labour, ‘still has no settled understanding of what it is for’.
Yet optimists in the party contend that in time, 2024 could well be viewed as a turning-point - a moment of fundamental change which heralds the election of a government that radically alters the long-term trajectory of the UK. They argue that an election in which Labour wins a sizeable parliamentary majority would lead to a seismic recasting of the political landscape comparable with 1945 or 1979.
The optimists aver, first of all, that an election would be likely to inaugurate a new economic settlement in Britain in which the state plays a far bigger role. There is an acknowledgement that the UK requires a coherent economic strategy focused on active industrial policy, turning investment in science, innovation and technology into a compelling national mission. The political class cannot accept ‘managed stagnation’. Britain will require an estimated £65 billion of additional investment by 2030, much of which will have to come from the private sector. Moreover, national security requires an assertive stance in overseeing supply-chains and procurement, an approach that has earned the clunky title ‘securonomics’ mirrored in the Biden administration’s Inflation Reduction Act. Greater state activism, a rejection of free market laissez-faire, ostensibly fits the ideological temper of the times.
Secondly, the election result is likely to affirm the imperative of bold policies to tackle the impending climate emergency. The effort in the wake of last year’s Uxbridge by-election to politicise the green agenda over the imposition of an ‘Ultra-Low Emission Zone’ (ULEZ) in outer London may be deemed a political failure. A future government would have a once in a lifetime opportunity to transform Britain into a ‘clean energy superpower’ with the prospect of £28 billion in green investment in the technologies and industries of the future. In achieving the net zero targets, economic growth would rapidly become green growth.
The third point is that an incoming government is set to accelerate rather than reverse the recent wave of political reform in Great Britain. UK politics could be transformed by the ‘devolution revolution’ underway in major English cities, accompanied by the entrenchment of the devolution settlement in Scotland, Wales and Northern Ireland. While the radicalism of English devolution has thus far been stymied by an absence of fiscal freedoms for city-regions and local authorities, greater control over taxing and spending would herald a new era of bottom-up experimentation. Strategies that tackle entrenched regional economic inequalities would be tailored more effectively to local circumstances. The political geography of Great Britain would be recast.
Finally, optimists believe the forthcoming election will mark the beginning of a new relationship between Britain and the European Union (EU) characterized by tactical co-operation rather than performative conflict, not least because it is widely recognised that the Ukraine crisis can only be resolved within a European framework. The deterioration of relations between London and Brussels that marked the protracted and painful negotiation of the EU Withdrawal Agreement under Prime Ministers May and Johnson would feel like a very different era.
Moreover, optimists contend that the radicalism of a new government is likely to be enhanced as it establishes itself in office, particularly if the performance of the UK economy improves, however modestly. Recent tax rises mean that an additional 0.5 per cent in the trend rate of economic growth over the course of the next Parliament would yield billions in additional revenues for investment in cash-starved public services. That would pave the way for a second term agenda focused on a renaissance of the public realm, especially the National Health Service, one hundred years old in 2048. Like Attlee and Thatcher, the incoming government would have capacity to ratchet up the radicalism of its programme.
There is little doubt that if the Labour party were to be in a position to enact such reforms, Britain would quickly feel like a markedly different country. The party has reinvented itself since the historic defeat of 2019, its most grave since 1935. While questions remain as to the precise purpose of Labour in power and whether it has a governing strategy comparable to that prosecuted by Attlee’s administrations, optimists in the party cling to the belief that in Toye’s words, ‘a new age of hope is just around the corner’.
Professor Patrick Diamond is the Executive Director of the Mile End Institute and former Head of the Number 10 Policy Unit. His latest book is Labour's Civil Wars, which was co-authored with the late Giles Radice.