Labour and ‘Negative Cohesion’: Who’s Afraid of Starmageddon?

Nothing has demeaned this wretched Conservative Party than the manner of its departure.

Rishi Sunak has campaigned for the last six weeks in the same the way that his party has governed for the last 14 years: with an unedifying mixture of lies, insults, and outrageous distortions that have further undermined standards in public life.

His claim that Russian President Vladimir Putin is hoping for a Labour victory was a new low, even by his own debased standards. No  wonder that, the more the public have seen of Sunak, the less they like him.

At the start of the election campaign, pollsters were warning that Labour would need a record swing of 12% simply to achieve a majority of one. Now, every pollster has Labour on course for a majority of at least 200 seats based on a swing of 20%.

The poll released on 2 July puts Labour on course for a majority of 318, with the Conservatives winning only 63 seats, just three ahead of the Liberal Democrats. 

The Conservatives only have themselves to blame. No party can expect to inflict five prime ministers, seven chancellors, and 10 business secretaries on the public and expect to get away with it.

It is hard to think of a single positive achievement over those past 14 years.

Through a mixture of political cynicism, strategic naivety, and a childish attachment to cod-Thatcherism, they wrecked the economy.

They got Brexit done, but the country can now see this for what it was: a reckless act of national self-harm driven by ideologues who had no idea what they were doing.

Unable to acknowledge reality, the Conservatives instead declared war on officials, institutions, allies, the rule of law, and anyone else who dared confront them with inconvenient truths. They had become a danger to anything that a Conservative Party might be expected to conserve.

Sunak had one chance to emerge from the past two years, if not with electoral success, then at least with his dignity in tact.

Conservative support may have collapsed in the wake of the Boris Johnson scandals and Liz Truss debacle, falling below 30% for the first time in the party’s history, but Sunak still had a poll lead over Starmer for economic competence right up until his party conference last October.

That was when he chose to junk his reputation as a technocrat and instead embrace Truss-style populism, scrapping the HS2 high speed trainline, junking net zero policies, and banging on about patently unaffordable tax cuts.

In attempting to neutralise the radical-right, he inevitably emboldened it – while further alienating liberal voters. 

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Unchecked Power?

Labour thus finds itself the beneficiary of what political scientists call ‘negative cohesion’. It will owe its victory to an overwhelming desire to kick the Conservatives out, rather than enthusiasm for its own agenda.

But that does not diminish the remarkable achievement of Keir Starmer in making his party electable again, less than five years after it was decisively rejected by voters who considered it unfit to govern.

He has worked assiduously to reassure voters that Labour can be trusted on national security and the economy. He has cloaked himself in the mantle of patriotism, rarely photographed without a Union Jack nearby, while issuing stern warnings about the need for fiscal responsibility.

His reward is that Labour is now more trusted on these issues – and indeed every other voter concern – than the Conservatives.

Faced with electoral oblivion, the Conservatives, having begun the campaign insisting that Starmer had no plan, have resorted to claiming that a Labour “supermajority” would hand Starmer “unchecked power” to unleash all the terrors of the world.

But, under Britain’s system of ‘elective dictatorship’, the House of Commons is only ever a weak constraint on the executive, regardless of the size of a government’s majority.

The real constraints are the rule of law, independent institutions, constitutional conventions, media scrutiny, and the House of Lords – everyone of which the Conservatives have done their best to undermine.

One reason to welcome the imminent arrival of a Labour government is that, under Starmer, a former Director of Public Prosecutions of obvious probity and integrity, one can expect a return to the honesty, integrity, and professionalism that Sunak promised but proved incapable of delivering. 

Another reason to welcome a Labour government is that it alone has the semblance of a plan to address the most pressing challenge facing the country: reviving economic growth.

No one seriously disputes that the biggest obstacle to growth in Britain is a planning system that, by handing local communities a virtual veto over development, has stood in the way of the construction of the housing and infrastructure that Britain desperately needs.

The flawed planning system is one reason why Britain has one of the lowest rates of investment and weakest productivity growth of any major economy.

The Conservatives understood this but were politically incapable of delivering reform and were forced to abandon it. One reason that a large Labour majority is in the national interest is that it is perhaps the only way that reform will happen. 

The good news is that Labour’s plans could unlock faster growth quite quickly. Much of the focus on planning reform has been on housing, where Labour has sensible policies to encourage house-building including the reintroduction of top-down targets and the reclassification of some marginal grey belt land.

But just as important is infrastructure. The previous Labour Government introduced rules that allowed the fast-tracking of planning applications for nationally significant infrastructure to enable them to be approved in as little as a year. Yet, the Conservatives shamefully failed to update the national policy statements upon which the system relies for a decade, causing the system to atrophy.

Labour has promised to update all national policy statements within 100 days. Better still, it will extend the definition of significant infrastructure to include laboratories, data centres, and digital networks.

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Fiscal Holes

Nonetheless, growth still might not come quickly enough to avoid tough fiscal decisions.

Even with speedier approvals, there will be a lag before the start of construction. And that is assuming that the construction sector can recruit the necessary workers, which has been a problem for the industry, particularly since Brexit.

In some sectors, big infrastructure projects will also depend on the willingness of regulators to allow rises in customer bills.

Meanwhile, it should be noted that, even under Labour’s plans, overall public investment will be cut in real terms relative to GDP, while some of its policies may hurt growth, including plans for new windfall taxes on North Sea oil and the scrapping of new licences, plus new taxes on non-doms and private equity that could further damage the competitiveness of the City. 

The big unanswered question is what Labour will do if it fails in its ‘mission’ to deliver the fastest growth in the G7. After all, it is promising to cut near-record NHS waiting lists, reduce court backlogs, hire more doctors, dentists, teachers and mental health experts, and end child poverty all while sticking with the current Government’s fiscal rules and without raising rates of income tax, national insurance, VAT and corporation tax. That is a tall order.

The Office for Budget Responsibility is already forecasting average growth of around 1.8% a year for the next five years, well above the UK average rate of growth between 2010 and 2019 of 1.3%. Yet, the Conservatives still had to pencil in deep real-terms cuts to spending on unprotected budgets such as the courts, prisons, further education, and local government.

Perhaps sooner rather than later, Starmer is likely to have to face some unpalatable choices: whether to stick with the Conservative spending cuts, change the fiscal rules to allow more borrowing or raise taxes, or perhaps a combination of all three. How he chooses to respond to this challenge will define what sort of Labour government he will lead.

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Building Jerusalem

The Conservatives have been predicting that Starmer will lurch to the left and return to ‘soak-the-rich’ tax rises. That may be what many in his party, in the trade unions, and among Labour’s traditional supporters would like. Many will be wanting Starmer to seize a historic opportunity to build Jerusalem, emulating the Attlee Government which used its unexpected landslide victory in 1945 to establish the NHS and nationalised swathes of the economy.

Others point out that Starmer is one of the most instinctively left-wing leaders Labour has had in years, having served in Jeremy Corbyn’s Shadow Cabinet, won his job by committing to preserve the core of Corbyn’s economic agenda, and even edited a Trotskyite magazine in the 1980s.

Yet, a lurch to the left seems unlikely, not least because unlike Attlee, Starmer has set out no plans in his manifesto for anything remotely socialist unless one counts two modest new funds to co-invest in green energy and infrastructure.

Nor, unlike in 1945 when the country was still operating a war economy, is there any evidence of any national mood in favour of nationalisation, protectionism, and subsidies.

Besides, Starmer has just gone to great lengths to purge the party of left-wingers, including expelling Corbyn. Instead, in Rachel Reeves, he has entrusted oversight of economic policy to a Shadow Chancellor steeped in orthodoxy. She understands very well that Labour’s growth plans hinge on mobilising private capital. 

A more intriguing possibility is that, rather than moving to the left, Starmer plants Labour firmly in the political space vacated by the eclipse of centrist Conservatives. That would emulate the path taken by its sister party in New Zealand, which took office in 1984 amid a severe fiscal crisis and proceeded to deliver radical free market reforms.

One of those reforms was the adoption of accrual accounting and targeting net worth, which I have long advocated as a way to improve management of the public sector balance sheet and which Reeves discussed in her recent Mais Lecture.

An innovative net worth approach, for example, would be to create a genuine national wealth fund containing large pools of existing public assets to be managed on a commercial and transparent basis to maximise income. It could also include creating a new fund to meet long-term public sector pension liabilities which could also invest in UK assets. Sadly, this seems unlikely too.

More likely is that Starmer will operate in government as he has in opposition: cautiously and pragmatically, free from any ideological lodestar.

That need not be a bad thing. The Liberal Government of 1906 won a 250-seat majority on the back of a ‘Get the Conservatives’ out campaign in the aftermath of the Boer War, but had no clear agenda beyond a commitment to free trade. Yet, it is remembered today as one of the great reforming governments in British history, taking the first steps towards the creation of a welfare state and curtailing the power of the unelected House of Lords.

Similarly, much of what we think of today as Thatcherism – privatisation, the ‘Big Bang’, the abolition of exchange controls – was simply a pragmatic set of responses to the challenges of the day. If Labour was to find a way to harness the emerging technologies, such as AI, to deliver large public sector productivity gains, for example, it could be a transformative government. 

On the other hand, a reactive approach can leave a government vulnerable to external pressures – a risk that is heightened by Brexit, which has put all sorts of powers to cause mischief back in areas such as subsidies, trade and regulator in the hands of Westminster politicians who have been historically particularly vulnerable to vested interests. That was what blighted the British economy in the 1970s.

Meanwhile, an electoral coalition held together by ‘negative cohesion’ will be hard to sustain when tough choices are required. The Liberal Government of 1906 lost its majority in 1910, the Atlee Government in 1951. Everyone thought Boris Johnson’s majority of 80 in 2019 guaranteed him a decade in Downing Street.

Political volatility is a mark of a system struggling to respond to the great issues of the day. Starmageddon may be the best hope for Britain right now – but it is no guarantee of stability. 

Simon Nixon is a former chief leader writer for The Times, and a former chief European commentator for The Wall Street Journal