It was supposed to be Keir Starmer’s big gambit: an opportunity to make the political weather, put forward an election-winning economic policy, and slap down “big beast” internal critics. Instead, his long-awaited plan for dealing with the cost-of-living crisis is unlikely to survive the month.
Starmer’s grand idea is to freeze the energy price cap at its current rate of £1,971, preventing further rises to an estimated £3,500 in October and over £4,200 in January. This will, he says, save households around £1,000. Now, when calculated on the back of a cigarette packet, this all seems to add up. The only problem is that households which use the most energy will be the biggest winners — and these tend to be richer households, with larger homes to heat.
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The proposal, then, is classic Starmer: another sweeping gesture in a policy area that should be Labour’s for the taking. Consider the political context. The economy is flailing, the Conservative Party has moved on from an unedifying defenestration to an even more unedifying leadership election, and Corbyn and his outriders have largely been silenced. And yet, Labour’s lead in the polls has fallen from 11% in the week after Johnson’s resignation to around 5% since the start of August. On current boundaries, it leaves Labour 18 seats short of a majority.
The blame for this can be laid squarely at the feet of Keir Starmer and his economic timidity. As has been frequently noted, the British public sits largely to the Left on economic affairs and to the Right on social affairs (or on the authoritarian side of the authoritarian-libertarian divide). Research by Paula Surridge suggests the average position of 2019 Conservative, Labour, Liberal Democrat and Brexit Party voters can all be found in a Left-authoritarian quadrant. Even more encouraging for proponents of Left-wing economics is YouGov’s finding that, among people who consider themselves Right-wing, 57% say the government should have a significant or dominant role in managing the economy, while 48% think the minimum wage is too low. Starmer should be pushing against an open door.
The Conservatives are clearly aware of this. It was, after all, George Osborne who introduced the “national living wage”, Theresa May who introduced the energy cap, and Boris Johnson who centred his premiership on levelling up. But we have seen no similar recognition from Starmer. Rather, despite standing on a largely continuity-Corbyn platform (in policy terms, at least) in the 2020 Labour leadership contest, he has tried to shift to the Right economically. “The role of government is to be a partner to private enterprise, not stifle it,” he wrote last year in a 14,000-word pamphlet which sounded more like a TaxPayers’ Alliance press release than Marx.
It also demonstrated that Starmer has learned the wrong lesson from Labour’s 2019 general election defeat. Corbyn’s personal unpopularity was an obvious cause of Labour’s drubbing, but his economic policies were popular — until people realised they were linked to him, or the Labour Party. (The same happened with Conservative policies under William Hague.) For all his flaws, Tony Blair was right to warn that progressivism was an electoral vote-loser; it’s that part of the Corbynite agenda Starmer needs to ditch, not the economics.
In this, Starmer shares the root of his faults with Rishi Sunak: both had been MPs for less than five years when they were put forward as party leaders; their promotions were rapid. And both are now floundering because they have no instinct for where their respective party bases sit.
But Starmer suffers, even more than Sunak, from a lack of political imagination. When the energy price cap was increased to £1,971, Starmer described the new level as “a very, very big problem”. And yet his new position is to keep the cap at this very level — by spending more than £30 billion. This is a politician who reacts to events, rather than shaping them; a politician who has no sense of what a better tomorrow looks like. By this point in the cycle, voters should be sick of hearing Labour’s next election slogan. Instead, Starmer’s only discernible pitch seems to be: “At least we’re not the Conservatives.”
Perhaps that will be enough to win in 2024. But perhaps it won’t. Liz Truss, the clear frontrunner in the Conservative leadership contest, has a three-point lead over Starmer — and that’s amid a toxic internal battle with Sunak. Placing Starmer against a Conservative leader without the personal baggage of Johnson and with a clear vision of what she believes in will only make his own ideological vacuity more apparent. Yes, Twitter might titter at Truss. But when voters see on the news that Starmer can’t even decide whether to let his frontbench attend a picket line, that hardly seems important.
So what should Starmer do? Well, the most obvious step would be to recognise that things in the UK are just a bit shit at the moment, and a lot of this is down to short-termism. Starmer’s original leadership campaign slogan, “Another future is possible”, is probably the right one. But coupled with this optimism is the need to be as ruthless as the Conservatives, who are happy to reward their voters (the wealthy, the elderly, homeowners) at the expense of other groups who are less likely to vote for them (students and welfare recipients).
Starmer should also follow the “housing theory of everything”, which argues that a lot of problems in the UK are at least partially driven by a lack of homes being built in areas where people want to live. In the UK, that’s often due to the greenbelt, especially around London. Happily for Labour, a lot of those areas are Conservative or Conservative-Liberal Democrat seats. The party should explain how they will fast-track more houses in these places (a good starting place would be within 800m of all commuter stations). These people were never going to return a Labour MP anyway, but the policy could be deployed to show Labour can take tough decisions. Similarly, rich pensioners (who will not vote Labour) get a lot of money from the state which they don’t need and which would be better spent elsewhere, either on poorer pensioners (who will vote Labour) on the NHS or on social care.
As for the cost-of-living crisis, if Starmer really wants to make energy more affordable, he needs to recognise that a price-cap freeze won’t help those who can’t afford to heat their homes now. Instead, he should take the £30 billion-odd this policy would cost and pump it into Universal Credit and council tax rebates for the working poor. For a long-term policy, Starmer should back large-scale, state-owned nuclear power and massive investment in battery technology, both tied to new apprenticeships and a green jobs revolution.
Finally, he shouldn’t be shy about what Labour councils are doing right. Under Corbyn, you couldn’t move without hearing about the Preston model, but since 2019 and the Conservative focus on levelling up, Labour seems to have completely vacated the pitch on local urban renewal. If Labour can’t do anything in opposition, it could at least tell people what they’re doing in local government.
Ultimately, however, a bold, economically Left-wing but socially-centrist policy platform is unlikely to emerge at the next election. As the saying goes, when someone shows you who they really are, believe them. And in the more than two years since he was elected leader, Starmer has shown very little sign of doing anything bold — let alone returning Labour to power.
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