In his letter to cabinet ministers at the start of this year, Keir Starmer wrote: “Increasingly, politics is no longer built around a traditional left-right axis. It is instead being reimagined around a disruptor – disrupted axis.”
That claim was viewed by some in Labour with scepticism but Nigel Farage appears determined to prove it. In the Reform leader’s ideological universe there is now room for Arthur Scargill and public ownership as well as Margaret Thatcher and the City of London. Incoherent? Perhaps, but similar contradictions didn’t stop Donald Trump from winning two elections.
Labour strategists question whether Reform will be able to maintain its populist turn. “At the end of these local elections thecaty’ll have picked up a lot of former Tory councils,” one told me. “Will they adopt more left-wing policies in power?” Farage will soon face a version of the same challenge that bedevilled Boris Johnson – how do you reconcile an overwhelmingly Thatcherite base with a more left-leaning “Red Wall” electorate?
But Reform’s rise – the party now averages 25 per cent in the polls – has sharpened Labour’s own dilemmas. This year has seen Starmer challenge his party’s liberal left on multiple fronts: backing a third runway at Heathrow, cutting foreign aid to raise defence spending and reducing health and disability benefits.
One group imploring him to go further is Blue Labour. Its programme, published 22 April and informed by recent meetings with senior Starmer aides at No 10, calls for the government to “drastically reduce immigration”, to “prioritis[e] domestic democratic politics over the rule of international lawyers” and to “legislate to root out DEI [diversity, equity and inclusion] in hiring practices, sentencing decisions, and wherever else we find it in our public bodies”.
Such stances are anathema to those progressives who have long been suspicious of or actively hostile to Blue Labour. The group, they often complain, has much to say about moving right on culture and little or nothing to say about moving left on the economy. That claim has always been unwarranted. Back in 2009, when Blue Labour was launched, its founder Maurice Glasman rhapsodised for German industrial democracy and assailed New Labour’s deference to the City of London.
The new programme duly foregrounds economics. It calls for the government to back the public ownership of water and steel, raise taxes on assets such as land and property and “scrap the fiscal rules, in which economic sense and democratic politics are subordinate to faulty OBR forecasts, and invest in infrastructure and the public realm”.
Here is an undisguised challenge to the woman who has made so much of her “non-negotiable” fiscal rules in recent weeks – Rachel Reeves. When I interviewed Glasman back in February, it was his attack on the Attorney General, Richard Hermer (“the absolute archetype of an arrogant, progressive fool”), that made headlines. But his criticism of Reeves was just as telling. “She seems to have forgotten entirely our last conversation about ‘securonomics’ and the ‘everyday economy’,” Glasman told me then. “Now she’s just a drone for the Treasury. There’s no vision of economic renewal and no idea about how to renew the faraway towns.”
Events since have done nothing to dissuade Glasman. “Speaking for myself, I believe the abolition of the Treasury is necessary for our economic renewal,” he tells me now. “It is an outdated institution at odds with contemporary reality. We have reached the end of the road in terms of monetary and fiscal policy and must embrace a different logic of reindustrialisation. The Treasury is ideologically neo-classical in its economic method and hostile to the interests of the country.”
In an echo of Harold Wilson’s creation of the Department for Economic Affairs, he calls for “a new economics ministry instead of the Treasury and Business in which priority is given to industry” and declares that “the Chancellor should be moved out of Downing Street, which should become the political hub of the Prime Minister’s Office.”
Glasman has never been afraid of being a lone voice in Labour. But when it comes to criticism of Reeves, that is far from the case. In recent months, the Chancellor has found herself challenged over spending cuts by cabinet ministers including Angela Rayner, Yvette Cooper, Ed Miliband, Shabana Mahmood and Lucy Powell. Ahead of this June’s Spending Review, those tensions will only intensify (unprotected departments have been instructed by the Treasury to model real-term cuts of between 6 and 11 per cent). Soft left MPs – not always inclined to support Blue Labour – are privately cheering its intervention.
A recurring criticism inside government is that Reeves, who championed heterodox “securonomics” in opposition, has been “captured” by the Treasury. Her aides reject this accusation, pointing to her rewriting of the fiscal rules last autumn and her promotion of growth over mere accountancy. Reeves’s ambition was to reform the Treasury from within and this, they say, is what she was doing. But others agree with the verdict of Harold Macmillan: “To reform the Treasury is like trying to reform the Kremlin or the Vatican. These institutions are apt to have the last laugh.”
In a world in which, as Starmer puts it, “everything has changed”, the complaint is that Reeves has not changed enough. But those who seek to find daylight between No 10 and No 11 have so far laboured in vain. When Starmer appeared to leave open the possibility of revising the fiscal rules earlier this month, No 10 swiftly declared that this was not the case.
Some inside government hope that the forthcoming appointment of a Downing Street economic adviser will force Starmer to adopt a more critical perspective. But others believe a far more radical counterweight is needed to the institutional power of the Treasury – hence Glasman’s call for the establishment of a Prime Minister’s Office.
Would Starmer, who has grown ever more impatient with an outmoded state, dare contemplate such a move? That is uncertain, but what is certain is that the coming months will test the Starmer-Reeves relationship as never before.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: The age of five-party politics]
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