Tanks, lawns

The Conservative Party’s astonishing record of time in government has been down to its ability to adapt, unideologically seeking the centre ground of public opinion and nicking policies from other parties. Conservative governments have, within the space of a few years, gone from advocating austerity to promising lavish spending on left behind communities, from hugging huskies to “cutting the green crap”. There is a reason that the party is one of the most successful electoral forces in the western world.

Labour has been watching. Angela Rayner’s words before the manifesto launch – “you can’t tax your way to growth” – could have been taken directly from a Conservative attack on Ed Miliband in 2015. Labour hasn’t missed an opportunity to call out what it alleges have been 25 tax increases since the 2019 election. Its core pitch, driven home as the first of Labour’s “steps for change”, is that it, not the Conservative Party, is the party of fiscal discipline.

Prudence with a purpose?

This has worked for Labour before. The tagline for Gordon Brown’s 1998 budget, which more or less stuck within Conservative spending plans, was “prudence with a purpose”. This was aimed squarely at reassuring those who perceived Labour as the party of tax, spend and profligacy. The Blair government eased into its spending plans with a great deal of early caution before increasing investment in public services, underpinned by a consistently growing economy.

The economic situation in 2024 is clearly incomparable to 1997: public debt is the highest it’s been since the 1960s, the tax burden is the highest since 1948, and yet public services are not performing. But many Labour members are concerned that the leadership is unnecessarily boxing itself in. They fear that the Labour Party has sacrificed its mission to deliver social justice on the altar of fiscal discipline. By capping corporation tax at 25% and ruling out increases to national insurance, VAT, or any of the income tax bands, Labour is setting itself a genuine challenge to deliver the improvements to public services that voters are desperate for – even with increases to capital gains tax and fuel duty, which haven’t been expressly ruled out in the manifesto.

The growth gamble

Labour’s gamble is that economic growth – mentioned 49 times in the manifesto – will pay for good quality public services as it did in the early 2000s. Rachel Reeves’ diagnosis of the country’s economic weakness, that it is being held back by low productivity caused by supply side weakness, has been welcomed by economists.

One of the solutions, planning reform, gets a good hearing in the manifesto. It confirms that a Labour government will give combined authorities new planning powers, re-introduce mandatory housing targets, reclassify datacentres to avoid being held up in local planning, take a more “strategic approach” to releasing greenbelt land, and create a new super-quango, the National Infrastructure & Service Transformation Authority out of the NIC and IPA.

While all important, there are some that would advocate for a more radical approach to planning and other key initiatives like Great British Energy, which some fear will not be able to compete with the enormous public subsidies being doled out in other markets.

A “no surprises manifesto” is what Sir Keir Starmer promised in the Sky debate last night, and it is what he’s delivered. The approach is one of caution, for now. Labour will be hoping that falling inflation and an expected reduction of the base rate in August will give them a more favourable economic wind – one that eventually carries them into the second term in office that they want and surely need.