Labour back in business

Something remarkable happened this week. Labour’s Sir Keir Starmer, the leader of the opposition, made several decent jokes in the House of Commons. Up against a beleaguered Boris Johnson, Starmer looked for the first time in these encounters as though he was enjoying himself. At one point he said with a smile that at least the Number 10 team knows how to pack a suitcase, a reference to the potential departure of the Prime Minister and the “wine suitcase” Downing Street staffers wheeled to the supermarket and filled with booze for their illicit parties.

Starmer is newly confident. Until recently the former Director of Public Prosecutions looked perpetually startled when interviewed on television, like a man who thinks he is about to be arrested.

Suddenly, Labour at Westminster is perkier. Members of the shadow cabinet sense that authority is draining away from the Prime Minister. A Labour frontbencher, sounding almost awestruck by the rapidity of the process, told me this week it was in public opinion terms like a settling of accounts: “In politics your flaws catch up with you in the end.”

Labour frontbenchers such as Wes Streeting, the shadow secretary of state for health and social care, are impressing. Rachel Reeves, the shadow Chancellor, is fired up and clearly having fun now that the Tories are in such a mess. She delivered a bold pro-business speech this week designed to signal that the party has changed.

Intriguingly, Reeves’ speech looked as though it had been coordinated with Tony Blair. The former Prime Minister made a speech of his own on the same day and referred approvingly to the remarks made by Reeves.

In parts of the Labour party, on the far left, Blair is still a swear word. From a different perspective, I still regard his premiership as the most expensive work experience programme in history. By the end, after ten years, he had got the hang of it. Alas, before that he moment of revelation he mangled the British constitution, succumbed to hubris and made numerous serious mistakes.

Nonetheless, that speech he gave this week is a cracker and really worth reading (we ran the whole thing for you here on Reaction). Blair’s argument is as good a dissection of Britain’s problems as anything offered by any politician since Brexit. Several Tories messaged me about it, saying it should have been a Conservative giving that speech.

Britain is living through three revolutionary changes simultaneously, he said. They are Brexit, the technology revolution and the climate ambition which forces a scarily rapid transition to the country being carbon neutral.

“Above all, we need to make our economy highly competitive, attract world-class talent, and make our independence from the EU a platform for economic growth. But it needs a plan, into which hard work and thought has gone. Policy detail. Strategic analysis. At present, there isn’t one.”

As well as there being no plan, we’re headed for the highest tax burden and spending by the state since the Second World War.

“Our productivity levels – the real test of an economy’s strength and the key to real wage rises – are stagnating,” he said. “We retain significant strengths. Our universities. Our leading-edge technology – particularly in areas like the life sciences which, post-Covid, are a huge asset. And now in climate technologies like renewables. The City of London as a global financial centre; creative industries; our language; our culture; historic and present connectivity to so much of the world. There is no cause for pessimism. But there is an urgent need for realism.”

The NHS has to be remodelled using technology and AI, to improve treatments and make money go further, Blair said. Government needs fundamentally reorganising. Starmer could do worse than take the Blair text as a template for his party’s next general election manifesto.

Labour’s advance so far under Starmer shouldn’t be overstated. After all, this is mid-term territory and for many of us Starmer himself will always be the man who tried to make Jeremy Corbyn Prime Minister.

Some of the populist policies Labour proposes are also potentially disastrous. Think the Tories under their current leader are too fond of rocketing spending and high taxes? Labour in power could surely outdo even Boris “Big Government” Johnson. 

Labour’s proposal for a windfall tax on energy producers would have dire consequences if implemented. The effect would be to discourage investors who are needed to invest in the North Sea, where Britain urgently must produce more from new fields to guarantee security of supply.

Still, detailed policies can always be reviewed and change later ahead of an election or once the party is in office. What Labour now has now is a bit of belief back and the beginnings of credibility. The wheel turns again. Neither of the two main parties in English politics is ever really finished, no matter how weird they go. They both can be reconstructed. 

Waiting for war

The story that matters most right now is Russia and the impending conflict. But I’ll be brief, as there are only so many ways to say the West is collapsing and we don’t know what Putin is going to do in the next few weeks. Does he even know?

The situation is deteriorating fast. American policy is highly confused, with President Biden this week appearing to suggest a “minor incursion” in Ukraine by Russia would not warrant a response. His team tried to correct the disastrous impression created. Meanwhile, Europe’s largest and wealthiest state, a great country, continues its descent into de facto appeasement under its hopeless new government. German policy on Russia started out weak and gets worse by the hour.

The Wall Street Journal revealed on Friday evening that Germany has blocked Estonia, a NATO ally no less, from giving military support to Ukraine. The German government is refusing to issue permits for German-made weapons that Estonia brought from Germany and now wants to send on to Ukraine, to help. No, says the German government.

Belatedly, the Dutch government has broken with German ministers and suggested Ukraine should be offered more military aid. This is welcome, but late.

Britain is all the while flying in aid, after months of cooperation and support of Ukraine. The irony is that the UK’s harshest critics condemn silly old Britain for supposedly being isolationist and pursuing parochial policy, in contrast to supposedly sophisticated, proper Germany. And here we are.

Is a Sunak, Hunt, Javid Tory leadership pact in play?

At Westminster it was one of those weeks when everyone says, over and over, faster and faster, that the situation is “febrile”. What’s it like there? Febrile. What’s the mood? Febrile? What’s the mood about the mood? Febrile. That f-word is code for the occupants of Westminster, or Portcullis House where hacks like me hang out, running around in ever decreasing circles trying to find out what is going on, and sometimes finding out.

The single most intriguing suggestion I heard on the merry-go-round came via several Tory MPs. There are whispers of three of the potential challengers for the Conservative leadership forming a pact if – or more likely when – there is a full leadership contest to replace Johnson. 

The pact would mean Rishi Sunak becoming Prime Minister, Jeremy Hunt getting the Treasury and Sajid Javid being Foreign Secretary. That’s a pretty punchy line-up, though some alternative candidates who fancy it themselves will scoff at the idea.

The pact would be presented as a post-Boris “unity” ticket, although in truth it would be as much about “stopping Liz Truss”, the Foreign Secretary. Free market champion Truss may have ideas of her own about stopping the boys and becoming the boss herself.

In this way, the run-up to a Tory leadership fight is reminiscent of a mobilisation by rival states and allies before a war. Once the parliamentary equivalent of troop trains get rolling, the assorted armed camps cannot risk being late to organise. Contests acquire a momentum of their own.

A small and shrinking band of desperate men and woman spent the week trying to save the Prime Minister’s skin. His closest supporters believe that if he can survive the imminent publication of the Sue Gray report then he will win comfortably in any confidence vote among Tory MPs, or in any vote brought by Labour in the chamber.

The problem with that is the scale of what’s coming in the next couple of months, with incomes squeezed, inflation and higher energy bills. Britons will feel a lot poorer and the sight of Boris trying to explain all this and apologise for it will, I predict, be particularly enraging. Gold wallpaper man has never had any experience or interest, really none at all, in economics. His ignorance of financial realities will show, and that will be infuriating to a lot of already disgruntled voters. 

In that economic context, I’ve also heard the putative leadership pact mentioned in a different order of line-up. A veteran Tory MP told me that Sunak will get as much blame as the Prime Minister for the cost of living hit that’s happening now and the tax cuts kicking in soon. He thought the pact would be Hunt for Prime Minister, Javid for Chancellor and Sunak to Foreign Secretary.

We’ll see soon enough.

What I’m reading

Share Power: How ordinary people can change the way that capitalism works – and make money too, is the fabulous new short, crisp, erudite book by Merryn Somerset Webb, published this week. Politics seems to be moving to the left, but for anyone (raises hand) who believes properly functioning markets and economic liberty are the route to prosperity this is a refreshing and encouraging read.

I’m discussing Share Power with Merryn next week and our conversation will be on YouTube, on the Reaction channel, soon. I’ll post a link and email it out to members of Reaction. 

Have a good weekend.