January 5, 2023 - 11:56am

Despite the audio issues, Keir Starmer delivered his best and most ambitious speech this morning. He promised an end to ‘sticking plaster politics’ by moving power and control out of Westminster in a new ‘Take Back Control’ Bill. In the year ahead, Labour will set out a new plan for growth, giving local communities the trust, power and control they need to help rebuild the country.  

Starmer, a man of caution, is promising a radical break with the old order. Westminster, he says, is part of the problem. As a system it doesn’t work. He’s right: new ideas are sucked into a bureaucratic morass. New initiatives are absorbed and rendered supine.

Not surprising, then, that after a tumultuous decade our political parties have struggled to break out of the interregnum which has immobilised the country. Conservative political realignment in 2019 broke free only to collapse in farce and ignominy, giving rise to a Labour revival. 

But Labour still has to win over the country. Starmer’s answer to this problem is that Labour will hand over power in a new devolution settlement to give control to local communities. The only way around the Westminster model is to develop external centres of power around the country to bring pressure onto it and so radically shift regional inequalities. 

Labour knows that to win an election it must have internal discipline and look a credible manager of the economy. During his leadership Starmer has wavered between risk and safety. He has made a few rhetorical forays into a more ambitious politics of national renewal and a promise to make Brexit work, but he has then retreated into the safety of fiscal conservatism and managerial competence. His current anodyne ‘A Greener Fairer Future’ says nothing very much about Labour’s purpose.

Above all else, Labour needs a new approach to political economy because the political priorities of the future will not be free markets, nor globalisation, nor the four abstract freedoms of goods, capital, services and people. It will not be a model of national economic development centred on the cities and the higher-educated. And as Wolfgang Munchau has pointed out, if Labour wants to make Brexit work it will require a new economic model. 

What matters now for Labour is not its rhetoric, but whether or not it does the heavy lifting of collective intellectual and political thinking, and policy development, necessary for breaking out of this interregnum.

Last July, Starmer made a start. He spoke about the national economy. He spoke about the central importance of the everyday economy and its workers in sustaining the daily life of the country. Shadow Chancellor Rachel Reeves reinforced his point. And along with Shadow Secretary of State for Business, Energy and Industrial Strategy, Jonathan Reynolds, they describe Labour as a “pro-business, pro-worker political party”. 

Labour has tentatively been signalling a new corporatism focusing on growth and productivity. In a step toward its post war economic nationalism, the party promises to ‘buy and sell more in Britain’. Angela Rayner and Rachel Reeves have announced that the statutory minimum wage will be pegged to the cost of living. Reynolds wants an industrial strategy council to embed a partnership between the market and the state. 

Alongside these proposals Lisa Nandy, Shadow Secretary of State for Levelling Up, Housing and Communities, has been shaping a Labour narrative of national renewal. While its principal focus has been on local community wealth-building, devolution of power and local democracy, she has begun setting out a broader argument around political economy, calling for a great rebalancing of power between capital and labour to spread wealth, security and opportunity across the whole country. 

Labour is shaping a new approach to the economy. It’s been slow, but today’s speech consolidates development so far. There is now no going back, no retreat into managerialism. Labour must now show it has the ideas, dynamism and energy to see this through. The electorate will need convincing.

Jonathan Rutherford is a writer and one of the co-founders of Blue Labour