Labour plays government-in-waiting
On the day Labour surged to its largest poll lead in over two decades, a jubilant Keir Starmer took to the stage at his party’s annual conference in Liverpool, with a major policy announcement up his sleeve.
During his hour long speech, Starmer promised to launch a publicly-owned renewable energy company, “to cut energy bills and deliver energy independence for our country.” Named Great British Energy, it would be modelled on France’s EDF, and this massive expansion in clean energy would help deliver British jobs and achieve Labour’s aim of making the UK a carbon-free power by 2030, he claimed. The Prime Minister’s favourite think tank, the IEA, has denounced the proposal as big statism. Starmer calculates it’s back in fashion.
The Labour leader was keen to prove he is equally as committed as Truss to making Britain a “growth superpower”, but green policies would play a key role in doing just this, he said.
The backdrop was financial markets turmoil, following Friday’s mini-budget. This enabled Starmer to pitch Labour, audaciously, as the party of “sound money”.
The leader of the opposition accused Truss and her Chancellor of “crashing the pound” to make “tax cuts for the richest 1% in our society.”
“Don’t forget. Don’t forgive,” he added.
According to the new YouGov poll which gave Labour a giant 17-point lead – the biggest since YouGov began polling in 2001- voters are turning against Kwasi’s mini-budget. Some 72 per cent of those polled, including 69 per cent of those who backed the Conservatives in 2019, opposed the decision to scrap the 45 per cent rate of tax for those earning more than £150,000. And 71 per cent of voters, including 67 per cent of 2019 Conservative voters, opposed the lifting of the bankers bonus cap. Overall, 60 per cent said Kwarteng’s £45 billion tax giveaway was unaffordable for the country and only 25 per cent believed the government had a clear plan to manage the economy.
While the pound has recovered ground since yesterday – with Sterling trading at around $1.08 this morning – it is still 5% lower than before Chancellor’s statement. As much as 500 billion dollars have been knocked off the value of UK bonds since Truss took up residence in Number 10, and over the past 24 hours several major mortgage lenders, including Halifax and Virgin Money, have withdrawn fixed-rate deals amid concern over the state of the mortgage market.
All this provided fertile terrain for Starmer to present Labour as a government-in-waiting.
“As in 1945, 1964, 1997, this is a Labour moment,” he declared this afternoon.
Echoing a phrase used by Tony Blair in the 1990s, he insisted his party is once again “the political wing of the British people.” The Hound has deconstructed this sinister phrase.
That said, Sir Keir isn’t the only one making comparisons with the Blair era today. Lord Mandelson has commented that Labour’s current poll lead shows a level of support not seen since Tony Blair – adding that the next election could be comparable to Labour’s 1997 landslide victory.
Of course, Truss and her cabinet are still hoping the economic turmoil will prove to be short-term and they can come out stronger on the other side.
As for Sunak’s followers who warned about the perils of immediate unfunded tax cuts, they will likely feel a mixture of emotions: vindicated, perhaps, on the one hand, and yet hoping, for the sake of their own party’s future, that team Truss still proves them wrong.
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