It was perhaps the best major speech to date from Sir Keir Starmer as Labour leader, although that isn’t saying much. With 13 years of disappointing Tory rule and a sense of a government past its prime, it was a smart move to focus on the theme of national renewal. In a country where so many things seem to not be working, this is much needed. However, despite Starmer’s efforts to raise our hopes for a better future under Labour, there is a lingering fear that Labour may not be up to the task.
Many of Starmer’s proposals were centrist and solid, and his ambition was encouraging. It is right to reinvigorate our spirits. However, beyond the core party supporters, there is a sense of apprehension that within a span of six months to a year after taking power, Labour will be disappointing in multiple areas.
Consider the delivery team that Starmer will rely on to implement his plan for national renewal. The current Tory cabinet is the least impressive in modern times. However, the shadow cabinet is just as lackluster, if not more so. It is the weakest Labour front bench in recent memory, with a shortage of talent, knowledge, experience, originality, and dynamism. Yet this is the team that Starmer wants to match the successes of Labour’s greatest post-war administrations.
Let’s take the pledge to build 1.5 million new homes as an example. It received the biggest applause during Starmer’s speech. We certainly need more homes, as the current Tory government has failed to build enough, leaving a generation of young people without the possibility of owning a home. However, British governments have consistently failed to meet even modest house-building targets for years. It is not immediately clear why it would be any different under Starmer.
Starmer talks about building new towns, but it is unclear where and when these towns will be established, much like the timetable for the 1.5 million new homes. While Britain has successfully built new towns in the past, recent planning and environmental regulations have made development a nightmare. The Tories have faced challenges and opposition in their attempts to build 300,000 homes per year, a target they have never met. Starmer claims it will take two terms in power to achieve his ambitions, but even after a decade, not a single new town will be fully operational.
Then there is the plan for a state-owned Great British Energy company, which is meant to lead to abundant cheap renewable energy. It will be based in Scotland, where state enterprises have a history of failure, whether it is delayed and over-budget ferry projects or incomplete road improvements. If Great British Energy is supposed to spearhead Labour’s plan for energy, we should prepare for power cuts in the winter.
Starmer stated that the role of the government is to help people shoulder their burdens, not add to them. However, he then doubled down on Labour’s net zero targets for carbon emissions, which will add to people’s financial burdens, from home heating to transportation costs. Once again, rhetoric and reality are likely to diverge.
Labour now focuses on reforming the NHS more than the Tories, which is promising, and Starmer spoke about it more during his speech. While it may be only Labour that can undertake the radical reforms needed for the NHS, the specific details of such reforms remain unknown. Starmer claims that the Tories have brought the NHS to its knees, but his plan to tax non-doms on their worldwide earnings, with the revenue going towards reducing waiting lists, is unlikely to make a significant impact. Currently, the Tories spend £50 billion more on healthcare annually compared to when they came to power in 2010. It is difficult to understand how an additional £3 billion would solve the NHS crisis. Moreover, the potential revenue from taxing non-doms might not materialize as many of them could simply leave the country for more favorable tax conditions.
Similarly, the proposed VAT on private schools, meant to generate extra funds for state schools, may have a minimal impact if families withdraw their children from private schools they can no longer afford and enroll them in state schools. The substance behind both tax proposals is weak, but they serve to create a sense of class warfare. Starmer has shifted Labour towards the center-left since the days of Corbyn, but he still needs to appease the Labour Left with occasional bones to chew on, such as taxing non-doms and private schools.
Neither tax rise will significantly impact the prospects of a future Labour government. However, the rising cost of government borrowing will have a significant negative impact on its aspirations. Surprisingly, Starmer and his shadow chancellor Rachel Reeves did not address this issue in their speeches. Reeves made it clear that Labour plans to borrow for investment, but she seemed ignorant of the fact that the days of cheap money are over. The bond markets now demand a premium from profligate politicians. Given the current state of the bond markets, any Labour government that borrows excessively, even for public investment, will face difficulties.
Many voters who are tired of the Tories may still see it as worth taking a chance with Labour. Starmer accuses the Tories of being out of touch with ordinary people, and there is some truth to that. However, Starmer’s speech focused more on non-doms and net zero than on Brexit, strikes, or immigration. This suggests that he, too, may be out of touch. During my recent trip to America, I witnessed widespread dismay at the prospect of…

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