Listening to Rachel Reeves today, I could hear the faint strains of a heckler. Not among the VIPs in that Oxfordshire hall but far outside, from a woman in Newcastle. I have told her story before: as the Brexit vote loomed, a London professor warned the geordie heathens that leaving Europe would harm the UK’s economy. Then one of the aforementioned heathens yelled back: “That’s your bloody GDP. Not ours.”
Rude, crass? Absolutely. Yet she raised one of the big questions for the Westminster classes, which cuts to the very heart of politics. Jabbing a finger into a navy lapel, it demands: who are you actually helping? The answer sealed the fate of George Osborne and David Cameron, and it will prove as decisive for Reeves and Keir Starmer.
No one can be unclear what this Labour government wants. “Growth, growth, growth,” clapped Reeves this week, as she strode into a meeting of Labour MPs. Even after the Christmas pantos, ministers are staging their own version of Peter Pan: they close their eyes – and believe! The prime minister dreams of a “growth lever”; the chancellor wants everyone to “start saying ‘yes’”. And from the stalls cry the humble voters: further and faster!
Magic shall happen. The G-word will be slapped across everything that moves – and quite a few things that don’t any more. Whitehall has already stuck out a press release claiming “the need for people to queue at the local council to register the death of a loved one” is “getting in the way of growth”. That’s the real downer about death – it gums up income streams.
What ministers want is photos of them wearing hard hats and hi-vis. Here is Angela Rayner, whooping it up in front of a half-built housing estate. There is Ed Miliband, peering intensely at a windfarm. You may recall another politician trying this tactic: George Osborne touring construction sites to distract attention from the misery he was inflicting on the working poor. Even as Labour ministers rejoice in infrastructure projects to come on stream at the earliest by the end of the 2020s, their chancellor is readying another burst of austerity for this April. From next Tuesday, the Office for Budget Responsibility will start laying out how far adrift public finances are from the fiscal rules that Reeves claims are “non-negotiable”. With the economy flatlining since summer, she is preparing to cut social security, as well as civil servants’ jobs.
What would our heckler in Newcastle make of this? I think we can guess. What drove so many towards Brexit or Jeremy Corbyn or even Boris Johnson was a failed economic model that boasted of its low tax, low costs and low regulation. Now that low tax is no longer an option and Britain has broken off its close trading relationship with Europe, the Labour government is stripping out whatever regulation it can.
The same ministers who harrumphed about rip-off prices for Oasis tickets now order watchdogs to be “pro-growth”. They oust one chair of the competition regulator to bring in a guy from Amazon – lambasted by Reeves in 2018 as “one of the new monopolies” that “block competitive markets, avoid taxation and impose oppressive control over their employees”. Starmer, Miliband and the five other cabinet members who in 2018 rejected a third runway at Heathrow as a climate disaster have lost their sense of shame. In the name of growth, the government supports car finance companies over consumers, and calls for mortgage lenders to be allowed to load up first-time buyers with more debt, even while financial regulators warn parliament that this will heap up bad loans and fraud.
Growth strategy? This is more like a trolley dash, grabbing whatever’s close to hand and might do. Forswearing big tax rises before the election, increasing taxes by £40bn after it; a giant fund for investment in green energy that shrinks before our eyes; “growth everywhere”, which turns into sweeties for London and the south; austerity is over, apart from for all those government departments starved of funds. The same week that Joe Biden warned of a new tech oligarchy, his former students in Downing Street cosied up to the AI sector.
A Labour government that promised change is, for now, trying to attract investment – and doing so in the most craven, credulous fashion imaginable. So the chancellor who vowed to stamp on tax loopholes for non-doms now says she is “listening to the concerns that have been raised by the non-dom community”. The non-dom community! Here is identity politics at its most fraudulent. Whatever next, a Non-Dom History Month? Note that the chancellor hasn’t paid so much attention to those who can’t afford to heat their house this winter.
Such politics would once have been labelled trickle-down – except not much actually trickled down at all. As the Foundational Economy Collective of academics and researchers show, of all the growth in take-home pay between 1999 and 2020, the top 10% of households made off with 25%, while the bottom 10% got only 3%. The papers that were full of talk about a cost of living crisis no longer talk about it, but for poor people it hasn’t gone away. Between 2022 and the eve of last summer’s general election, the researchers found, the poorest 10% were spending 95% of any increase in disposable pay on food, rent, energy and transport – the essentials to get by.
Whose bloody GDP is it? Rather than offering big companies sweeteners in exchange for photo opportunities, and claiming it’s in aid of growth, Labour ministers should instead focus on protecting households from utility bills and transport and housing costs, which remain high and will not be falling far any time soon.
The polling shows that is what voters actually want. Two surveys this week alone show the cost of living near the top of the reasons voters give for being angry at Starmer, just after cutting winter fuel allowance. But I suspect ministers will not listen until next year, by which time the photo ops will not have translated into better polling and Nigel Farage’s troops will be preparing to wipe the floor with Labour in the elections for the Welsh Senedd. Ah well: roll on the next reset.
Aditya Chakrabortty is a Guardian columnist
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