Starmer can’t afford to be a Tory tweaker

The Labour leader has doubled down on his five ‘missions’, and his reshuffle puts his election team in place. But now he needs to get radical, writes Andrew Grice

Something’s gotta give. It will – after the election (PA Wire)

The Labour spin on Keir Starmer’s shadow cabinet reshuffle was that his new team will deliver public sector reforms if the party wins power. But what would the changes be, and how could they happen when an incoming government would have little or no money?

Sometimes “reform” seems a convenient soundbite to deflect legitimate questions about how a cash-strapped Labour government would further the party’s traditional goals of good public services and social justice. Even some of Starmer’s natural allies worry that he has put down fewer ideological roots than Tony Blair had done a year before the 1997 election. They dismiss the widespread perception at Westminster that the reshuffle signalled a Blairite takeover. As one MP told me: “Keir has no real ideology or politics. He just wants hard work, performance and loyalty.”

There are some clues to be found about Starmer’s thinking on reform in an essay he wrote in 2016, a year after becoming an MP. That he chose to write about public sector change when the Fabian Society told him he could choose any subject suggests that his commitment to it is real. Drawing on his five years as director of public prosecutions, Starmer called for a more preventative approach (for example, investment in public health and early intervention to stop young offenders ending up in prison). He wanted to end the “silo approach” in Whitehall to ensure “much better connections between services such as health, housing and criminal justice”.

Today, Starmer believes that a cross-departmental approach is vital to the five “missions” for a Labour government, on which he is doubling down, even though some shadow ministers think they are too vague. Starmer is impressed by the Blair-Brown pledge to end child poverty in a generation by ensuring that employment, benefits and social policy were joined up. Next week he will promise a cross-departmental cabinet committee to tackle child poverty. More joined-up government would mean individual ministers losing some autonomy, but it’s the right approach.

Starmer’s reshuffle gave us more clues. Peter Kyle, who has taken on the science brief, will press for much greater use of new technology in public services. His shake-up suggests that Starmer would bite the bullet on social care reform – repeatedly ducked by the Tories – by introducing a “national care service”, putting care on an equal footing with the NHS and giving careworkers eventual pay parity with those in health. Liz Kendall, previously the care spokesperson, opposed the name as being too top-down, but Wes Streeting, the shadow health secretary, now has a free hand to bring it in. He commissioned a possible blueprint from the Fabian Society.

Streeting favours greater use of the private sector to relieve pressure on the NHS. In her new welfare role, Kendall will push labour-market reforms and compete with the government on how to get people on sickness benefits into work.

Labour figures tell me that the goal is some reforms to deliver “quick wins” in the first two years, including “rescue spending” – health, care, education and local government will be priorities – alongside the announcement of long-term reforms. Some of these would not be implemented until a second five-year term. There would be a premium on reforms that don’t cost taxpayers money, such as more housebuilding – on which Labour would be more radical than it currently appears, in an effort to achieve economic growth – and changes to regulations.

It won’t be easy. Labour’s rotten inheritance would include £18bn of post-election cuts for Whitehall departments the Tories would struggle to fund should they retain power. Some tax rises are seen by Labour insiders as inevitable; although the shadow chancellor, Rachel Reeves, has ruled out a specific wealth tax, she still has scope to make the system fairer and raise revenue.

In a policy document to be published next week, Starmer will stress: “Labour’s fiscal rules ... are non-negotiable. They will apply to every decision taken by a Labour government, with no exceptions. That means that Labour will not borrow to fund day-to-day spending, and we will reduce national debt as a share of the economy.”

Yet Labour might need to relax its stance – for example, to ensure that capital projects are not cut when the rules come under pressure. Otherwise, it would risk a repeat of the school buildings fiasco. Long-term reforms that eventually save money and improve services require upfront investment.

A Labour government could not afford to remain imprisoned by its pre-election fiscal caution. Nor could the country afford it. Starmer would have only a small window for his reforms to work, and his administration would soon “own” the state of our public services.

Unless Labour was able to create room to increase spending, the danger for Starmer is that his much-trumpeted reforms would look more like a tweak to Tory policies than the change people had voted for.

Something’s gotta give. It will – after the election.