Labour must unite – rather than disunite – over its mission to repair Britain

Editorial: There is a need for honest argument within government which, at times, will become bitter disagreement. But this administration must retain its sense of purpose and keep such conflicts within the Labour ‘family’

Louise Haigh, Angela Rayner and Shabana Mahmood have written to the prime minister to voice concerns about Treasury plans for their departmental spending (Getty)

It must be a profoundly depressing experience for Labour cabinet ministers, still fairly fresh from the euphoria of the election and collecting their seals of office from the King, to be so quickly faced with the prospect of deep budget cuts in their “unprotected” departments.

Given the more or less explicit promises to provide extra funding for the NHS and schools, albeit with reforms attached – and limited scope for tax rises – the chancellor has been forced to seek savings elsewhere across government, to the now public dismay of some of her colleagues.

Angela Rayner (housing and local government), Shabana Mahmood (justice) and Louise Haigh (transport) have appealed directly by letter to the prime minister to think again about taking a rumoured £18bn out of the budget for public services.

It is understandable why they might object – and the public is expecting improvements through investment. The voters did, after all, elect a Labour government on the promise of “change” – and took Sir Keir Starmer and Rachel Reeves at their word when they pledged “no return to austerity”.

For the three troublesome cabinet rebels, staring at their spreadsheets in their departmental offices, at something to which they are utterly opposed, it must feel that a return to austerity lasting some years is very much a reality. It’s hardly something to look forward to.

Obviously, politicians such as Ms Rayner go into their professions in order to improve the country. They now feel a clear sense of duty to warn about the dire consequences of what Rachel Reeves is proposing to do to their departmental budgets.

Of the three rebels, Ms Mahmood deserves the most sympathy, because the criminal justice system has been starved of funds ever since the coalition government decided that courts, “lefty” lawyers and convicts were the easiest of prey for George Osborne’s programme of austerity cuts.

Sir Keir himself said he was shocked by the neglect that had been going on in the prison system under the Conservatives. Years of putting the criminal justice system on a starvation diet has left prisons with virtually zero capacity, and forced the emergency extension of an early release that the Tories had had to introduce to cope with the overcrowding.

Labour said it was because the Tories didn’t build enough prisons – so did Suella Braverman, in fact – and they were right. Now, Ms Mahmood is being asked to bring about changes that, she believes, will continue the neglect brought about by her predecessors. Clearly she feels the circle cannot be squared if she is also to keep the courts and prisons running as the public wish; delivering retribution and taking criminals off our streets.

As Ms Reeves might cogently argue, what is the alternative?

Pushing personal and business taxation even higher than is already being planned might not yield much more in the way of revenues; the Labour government may have just discovered that the Tories tested the Laffer curve (the relationship between rates of taxation and the resulting levels of tax revenue) pretty much to its limits. There are disturbing rumours that imposing VAT on private schools, abolishing non-dom status and taxing private equity might not yield the funds forecast in the manifesto.

There are other, more obvious, sources of funds. Yet severely diluting or dishonouring the manifesto pledges on tax rates, national insurance, VAT and corporation tax is potentially electoral poison – and risks not only Labour being a one-term administration, but also a return for the Tories under fresh – extreme – leadership.

Increasing employers’ national insurance contributions, perhaps limited to payments into staff pension pots, is about the most Ms Reeves can get away with. Of course, the overall tax take is already near post-war highs – and, at some point, will start to badly affect savings, enterprise, investment and growth.

It is worth adding, loud and clear, that the fault in all this does primarily lie with the Sunak administration, and the entirely unrealistic plans for public spending they used as the basis for their tax cuts – safe in the knowledge that they would lose the election and never have to implement them.

Bodies such as the Institute for Fiscal Studies argued that Jeremy Hunt’s tax and spending plans were the purest fantasy, based on spurious efficiency savings and over-optimistic economic growth forecasts. Mr Hunt and his colleagues left a kind of fiscal timebomb behind in the Treasury. It has just detonated.

This is the situation that Labour has inherited, and is now struggling with. But it should have been better prepared for the crunch on public spending that was going to come sooner or later.

The rebels may feel entitled to object – but the time for Ms Rayner, Ms Haigh and Ms Mahmood to try and prevent the coming crisis was before the election, when the manifesto was being written and the fiscal framework – the very specific and limited promises on tax and spending – was being formulated. They should take their grievances out on their predecessors, not their chancellor and their leader.

For her part, Ms Rayner has a record of not being a team player. But never has Labour needed cohesion to implement their agenda for change.

Past Labour governments, dating all the way back to 1931, have had to face up to economic crises and the deeply repugnant task of cutting public expenditure plans and letting “working people” down. The choices are often forced upon them by circumstances out of their control – and sometimes by their own mistakes. Either way, the crucial thing is to stick together, to try and stay united and to get on with the job.

If cabinet minister show signs of a split this early in parliament, then their prospects are indeed bleak. Divided parties that can’t manage a crisis don’t usually get to be re-elected. The Labour rebels are entitled to object and make their disappointments public, but establishing their fiscal responsibility and economic competence remains paramount, painful as it is.

The letters these rebels have sent to the prime minister should be regarded as a safety valve. There should be honest arguments – but within the confines of the Labour “family”.

Difficult choices arouse passion – even anger – but these emotions must be contained within a cabinet that owes it to the country to maintain collective responsibility.

Labour has a duty not to not descend into chaos and factionalism, as the Tories did. Above all, to borrow a phrase from over the Atlantic, we can’t go back to all that.