We are not supposed to call Keir Starmer’s re-launch a re-launch and one can understand why. ‘Re-launch’ would imply some novelty. There was none. The Prime Minister delivered a tired combination: an old message, and a persistence in failure.
The ‘old’ part almost entitles him to sympathy. Like most of his recent predecessors, he is scratching his head about a chronic problem. The Government is not exactly subsisting on meagre rations. In 2024/25, it is expected to spend £1.2 trillion. Set out in figures, that comes out as £1,200,000,000.000: a breathtakingly large sum. One would have thought that this would provide enough money for schools, warships, hospitals, policemen or any other desiderata. But no: Keir Starmer has been able to allege that Britain is broken: that our public services are in the condition of starveling wretches in a Dickensian workhouse. Many voters have been persuaded that a lot is wrong. I suspect that if you were to conduct an impromptu opinion poll with one question: ‘Do the public services deliver value for money?’ the answer would come in the form of a rude noise.
So something is the matter, as Sir Stumbler seems to recognise. It will not be put right just by pouring more water into leaking buckets. Even Angela Rayner may now be aware that more money alone will not solve the problem. The great task is easy to define: ensure that the public services do actually serve the public.
But it would be helpful if the new Government had not charged off in the wrong direction. The aim is greater efficiency in the public services. How can this be achieved by handing out large pay rises without insisting on any quid pro quo in terms of higher productivity? Moreover, how can it be assisted by giving employees more rights, again without any effort to ensure higher productivity? Inter alia, anyone examining the record of British public services in the last few decades would come to one important conclusion: that the influence of the trade unions has been almost wholly malign. Yet this Government has now set out to increase it. If the aim is to mend the country’s breakages, that is just daft.
But there is a greater daftness. In their last months in Opposition, the new lot were trying to assure the City that their aim was growth. They seemed to understand that ‘It’s the economy, stupid’: that their social – and political – ambitions all depended on wealth creation. Instead, we have had another wrong direction. I have recently talked to a number of businessmen, some of whom actually voted Labour in July: none of whom can understand what the Government is doing. As a result of Labour’s bleak narrative, it is hard to raise investment capital at the moment. The firms with the moneybags do not trust the Starmer/Reeves regime and a lot of them feel that there may be more lucrative opportunities under the re-elected President Trump.
This is serious for several reasons. To take just one, Britain is currently in a strong position to make progress on AI. If investors conclude that this Government is hostile to business and enterprise, that could rapidly change. There might be a brain drain and a capital drain. If the Government’s sole interest in the private sector is as a tax-cow, it may find that there is a lot less left to tax.
AI could have another consequence. A potential employer is told that he will have to pay more tax on his employees. He will also be told that those employees will have more rights, which could easily sound like a trouble-makers’ charter. Could he be blamed for concluding that it would be simpler to hire machines instead?
After five months, it is hard to work out was this Government is trying to do. We still do not know what Keir Starmer believes or whether he has any understanding of economic reality. Nor does he grasp the importance of animal spirits: a crucial economic factor. As soon as she arrived, Rachel Reeves announced that there was a black hole in the public finances. The figures and the record contradicted her, leaving only one hole: the grey one in her own CV. But the damage was done. If the Chancellor and the Prime Minister talk the country down, they cannot be surprised when economic confidence crumbles.
The Starmer Government has displayed an extraordinary degree of ineptitude, combining arrogance, insensitivity and naivete. No wonder they feel the need for a relaunch, but their reluctance to call it by its proper name may tell us that they do not yet realise how much a relaunch was needed. It is unlikely to be the last one.
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