Rarely has bad news been broadcast so enthusiastically. Keir Starmer has told us that the country is in a mess, both economically and socially. The difficulties will get worse before they get better and there is little hint of sunlit uplands: not that Starmer is a sunlit character. Moreover, switching to the gloom which comes easily to him, everything that has gone wrong is all the Tories’ fault.
This is a carefully calibrated political strategy. Even so, it has problems: psychological, political and economic.
First, psychology. On the whole, Prime Ministers want to make people feel good about themselves. But contrast Keir Starmer and Kamala Harris. The Vice President has written all her previous opinions out of the script, concentrating on motherhood, apple pie and Donald Trump’s scumbaggery (perhaps going easy on motherhood, in deference to the abortion lobby). This ought to be potent, in a country whose Bill of Rights includes one crucial unwritten item: that this year shall be better than last year, and next year shall be better than this year.
The Harris campaign could be less effective than the liberal press – on both sides of the Atlantic – would have us believe. But one of the reasons why Jimmy Carter lost to Ronald Reagan is that President Peanuts seemed to enjoy making Americans feel bad about themselves. Reagan did the opposite.
Starmer is closer in temperament to Jimmy Carter. In his promotion of dirge, the new PM has blunted one of his more important political weapons: Rachel Reeves. Entering office with a considerable reputation, she radiated an old-fashioned banker’s fiscal caution and she had also been effective in her visits to City boardrooms. She seemed to belong to a different political universe from the Corbynistas. All that was impressive, until the new Chancellor set about undermining her reputation for honesty and the Government’s for prudence. She alleged that the Tories had left behind a £22 billion black hole. Not so, said Jeremy Hunt: there was no black hole and all the figures were on the record.
The Government then set about creating a black hole of its own. The public sector trade unions were invited to form a disorderly queue, demand the highest figure for a pay settlement that they could think of, and then add some more. In the Starmeristas’ re-writing of Oliver Twist, the Beadle embraces Oliver and announces second helpings all round: third helpings to follow.
Starmer and Reeves face a further awkwardness. If the economy is in such a mess, why is inflation now under control, while unemployment is falling and growth rising: still anaemically, perhaps, but high by G7 standards. In all this, the politics and the economics come together, and the voters may be noticing. The Tory party certainly has, increasing the incomprehension – and indeed fury – over Rishi Sunak’s decision to call an election while leaving good news to arrive too late.
Other people are also listening. The incoming Government declared its intention of boosting economic growth. Well and good: we could do with a sustained increase in that crucial indicator, as well as in productivity. But where is this to come from? The answer is simple: the flourishing of small and medium-sized enterprises. In Britain, the record in SME creation is impressive, but there is often a longer-term weakness, which has been described as the Old Rectory Syndrome. Someone sets up a new business, with all the hard work which that entails. But after the years of struggle, the daunting personal guarantees, the sleep-threatening anxieties which SME proprietors know so well, the sunlit uplands arrive – and with them, the venture capitalists offering a healthy payout and a lifestyle to match.
One can understand why many businessmen take that option. Yet in the US, plenty of their equivalents prefer to move to the next stage and grow SMEs into unicorns.
It is not clear why the UK’s experience is different or how we can close the gap. Yet one point is self-evident. High taxes will not help. It is clear that the Chancellor is thinking in terms of taxes on wealth, capital and inheritance, as well as on private education. If the aim is to promote growth, we need to encourage free enterprise and the entrepreneurs who are its harbingers. But very few entrepreneurs have ever embraced that vocation because they wanted to pay higher taxes.
In the 1970s, a phrase was in constant use: ‘the brain drain’. Many of our ablest and most energetic youngsters despaired of achieving success in Britain and sought their fortunes elsewhere. Then came Margaret Thatcher. Under her, the term fell out of use. To the depths of her being, she understood the aspirational middle classes and did everything possible to encourage their animal spirits. As an economic stimulant, that is as important as ever. There is no sign that this is understood in Reeves/Starmer-land.
It is not clear what Reeves really believes, while Starmer has shown a dexterity similar to that of Kamala Harris in discarding previous convictions which are now electorally inconvenient. Yet we can come to some conclusions. The Tom Baldwin biography suggests a difficult relationship with Keir Starmer’s father, who struggled on the boundaries of the upper-working and lower-middle class and who never felt valued. He almost certainly passed on those resentments to his son. Keir Starmer himself went to a good grammar school, which after it became fee-paying, awarded him a bursary for his sixth-form years. This would probably have been impossible if there had been a 20% surcharge.
The young Starmer benefited from the rising living standards which post-war Tory governments did so much to promote. As a result, he was able to enjoy upward social mobility. But he brought his social chips along with him. The way in which he uses the phrase ‘working people’ conveys a lot. It is as if he thought that the so-called working classes were morally superior. As for those in what he would regard as the upper social strata – though not in moral terms – they can shift for themselves.
Yet all this is as out of date as it is economically destructive. In the first half of the 20th century, socialist propaganda made great play with the contrast between the idle rich and the manually-labouring poor, condemned to back-breaking toil on barely subsistence-level wages. That is now sociological archaeology, for a number of reasons. Crucially, wartime and post-war tax levels largely extinguished the idle rich. During the 1930s, Bertie Wooster had many travails: aunts on the warpath, ditto Roderick Spode, worst of all Madeline Bassett. But there was never any suggestion that he might have to work for a living.
Even as late as the mid-1980s, the pace of life in many City offices was relaxed. It was understood to be advisable to get your work done in the morning, before lunch supervened. Then came Big Bang and the arrival of Manhattan mores, which did not include lunching. At the same time, mechanisation plus the export of low-grade manufacturing work largely eliminated the harsher forms of manual labour. In contemporary terms, apart from junior doctors, the hardest-worked employees are to be found in the City or in the commercially-inclined law firms. Rather than acknowledge this and modify his economic views accordingly, Keir Starmer would prefer to sound like an early Bolshevik, with a rhetoric that Jeremy Corbyn would have applauded.
As for the social destruction for which Starmer blames the Tories, there were indeed failures. Failing to curb immigration or to ensure that the able-bodied young were driven out of post-Covid idleness and obliged to return to work, not to mention the failure to prevent police forces from de-criminalising shop-lifting instead of pursuing a zero tolerance approach. If Labour could deal with that, they would have a message worthy of a hearing, especially if they could also address housing. But this is a government and a Prime Minister that are already losing momentum. If they are going in a direction, it is almost certainly the wrong one.
As autumn approaches, Tory morale is higher than anyone would have thought possible: Labour’s is shakier. There are interesting times ahead.
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