Labour's plan for government is based on some vague aspirations that are almost meaningless, and probably undeliverable. So, what should it do?
This is the audio version:
And this is the transcript:
There is no growth, so what does Labour do now?
That's a relevant question because in October 2024 we saw the Office for National Statistics in the UK say that the UK economy had shrunk by 0.1 per cent that month. Now we know the figure for November, and it grew by 0.1 per cent.
When we look back over the last 18 months to two years, we can see that average growth has been less than 0.3 per cent a month. There is no growth in the UK economy that is worth talking about.
And at the same time, there's also no inflation in the UK economy that's worth talking about because In December, that went down by 0.1 per cent, which is, like those numbers for growth, pretty much a rounding difference in statistical terms.
Everything is flat, stagnant, and static. That is what the state of the UK economy is. And this presents the most enormous challenge to Labour, who came into office saying that they were going to deliver growth, and so far we have seen not the slightest evidence that they know how to deliver it.
I'm not going to go through why that's the case again, because I've discussed it in other videos. Instead, I want to talk about what they should be doing because Labour is in desperate need of another reset, and it's already done it once or twice, and it only got elected in July 2024. But they frankly can't deliver on the basis of the programme they've now got.
According to that programme, there are five things they're going to do.
They're going to kick-start economic growth. Good luck, when there's no sign that there's any prospect of that happening.
They're going to make Britain a clean energy superpower. That sounds fantastic, but they've just also announced that we're going to be the hub for AI around the world, and AI is going to absorb vast amounts of energy. Those two policies are in complete conflict with each other, and I can be pretty sure that AI is going to win. We are not, as a result, going to be a clean energy superpower. Instead, we're likely to be burning more fuel than we have for a long time, and increasing the temperature of the planet as a consequence.
We're going to take back our streets, apparently, because taking back control sounded like a nice phrase for Labour to use, and they applied it to our streets. The trouble is, it's taking years for cases to get to court for almost any crime that has now been committed. And of course, we all know that the actual charge rate is minuscule because we do not have enough police.
So that target is, again, utterly meaningless, as is the next one, which is breaking down barriers to opportunity. In the word salad that the average Labour politician now creates, this one ranks up there, high in the aspirational level, because it sounds like it's Labour doing something for equality. But in practice, it's not. It's totally meaningless. It could be anything covered by that. And I don't believe that there is really any significant change to education or other work opportunity as a consequence.
Just as their fifth objective, which is to build an NHS fit for the future, is something that they have no idea how to do because we have Wes Streeting in charge, which is enough to make us all despair. But Wes Streeting - he's not planning to create an NHS fit for the future, he's planning to create an NHS fit for privatisation.
So, what should Labour be doing? Well, the first and obvious advice that I can offer to it is give up these meaningless slogans. Stop pretending that, somehow or other, we will all be taken in by some new catchphrase. Because we're not. If they ever worked, and maybe they did a decade or more ago, they do not now. We have seen too many politicians put up too many placards, making too many claims, all of which turned out to be utterly meaningless, to ever believe another such word salad. So let's not bother with those. And Labour should be putting them aside.
Let's also stop making goals out of meaningless things. Let me use growth as an example. Labour says it wants growth, but you can't see growth. There isn't anything that you can say like “That's growth over there. That's good.” Because growth is an epiphenomenon of other things happening.
Growth happens because more people are at work.
Or more services are supplied.
Or more things are made.
Or more goods are exported.
Or the government spends more into the economy to deliver services, like health and education and so on, which it says it won't do at present.
Growth is not something in its own right. In technical terms, It's an epiphenomenon. It's a statistical consequence of real things happening.
And this is the nub of my argument. Labour should stop worrying about these stupid and meaningless terms and measures, like growth, and instead talk about what they're going to do.
Real things that need to be done.
Real changes that would actually have impact upon the lives of people in this country.
Labour should be ending child poverty. Full stop. That's a goal. It's a real goal. It is decidedly measurable. It could be done. It would require the government to spend. It would require redistributive tax policies, but they can be adopted whenever Labour likes. That is a deliverable outcome.
It could improve housing stock in the UK. It could get rid of damp housing. It could require that a large number of houses be converted to be green and sustainable. These are tangible benefits which produce real employment opportunities, real benefits for the people living in the houses and real long-term benefits for the generations to come who won't have to live in the grubby housing that too many people have to endure now.
It could also, for example, decide it was going to reduce actual measures of inequality in the economy. It could, as a goal, decide to literally reallocate some of the wealth of the rich to those who are on lowest income to stimulate the economy because those who are rich, as I've explained in previous videos, save and therefore do not encourage new economic activity, whereas those who are on lower income spend and therefore do encourage new economic activity. And they could lay this out as a programme and explain by how much they want to redistribute to encourage that growth.
They could set real targets for investment. Their own investment would be the best thing to do, and they could lay out how to fund it. Again, I've explained that if we change the rules on pensions and ISAs, there would be ample money available to the government to fund such a program. It could do that.
So it could say it will build so many schools, so many hospitals, so many houses, so many sustainable energy sources and on, without difficulty.
It doesn't need big grand projects. The likes of HS2 are for fools. We don't need those things.
We don't need new runways at Heathrow when we know that we can't let planes fly forever to the extent that we have in the past.
What we need are things that are small in themselves but big in their consequences.
Labour could do all of this. It could actually set out a positive vision of achievement.
And as I stress, that is not something which looks grandiose. It's actually about putting jobs in every constituency in the UK, creating opportunities for long-term employment and real training, and actually delivering what people want where they are now.
If it did that, well, it would actually happen to deliver growth, but it wouldn't make growth the goal. Growth would just happen to be the consequence, and that's fine. I don't mind if growth is the consequence, but what I'm really interested in is things happening. And when Labour begins to believe that its job is to make things happen rather than to write slogans and to aim for some vague, statistical idea called growth, then we might get delivery.
Do I think that Labour is likely to begin to believe in the real world and making change to it? I wish I did.
Have I got hope? Not a lot.
But, at some time, somewhere, some politician is going to understand that this is what UK needs, and is going to offer a programme like that. And when they do, that is what might break the logjam in British politics.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
If there’s one term that covers why the Labour government is so useless as well as all the other UK political parties it’s that they’re “biologically inept”!
What does this mean? It’s simply that they fail to recognize that a fundamental goal built into all life is the desire to achieve homeostasis both individually but especially by means of collective activity. This is revealed in the work of at least two scientists specialising in biology, the late Eshel Ben Jacob and J. Scott Turner:-
http://ankara.lti.cs.cmu.edu/11780/sites/default/files/BacterialLinguisticsandSocialIntelligence.pdf
https://www.youtube.com/watch?v=yJpi8SnFXHs
https://evolutionnews.org/2017/09/in-a-new-book-scott-turner-explores-biologys-second-law/
How does a society collectively achieve homeostasis? Prime amongst the means is recognising that money acts as a messaging system for collective action and it’s consequently critical to understand how your country’s monetary mechanics can be made to work to achieve this. MMT does exactly this. In regard to maximizing well-being it says the following applicable to the UK:-
“… unless the fiscal deficit more than offsets the external deficit and the private sector saving, mass unemployment will result.”
Page 195 – “Modern Monetary Theory: Bill and Warren’s Excellent Adventure” by Bill Mitchell and Warren Mosler
That’s a tangible description of what ‘growth’ could look like – wealth and capacity built. Look back Labour’s rhetoric around growth has been more centred around the process of ‘how’ rather than the outcomes, the’what’. The detail seems to revolve about the relationship between the public and private sector. Unsurprising perhaps given the managerial mindset dominant among current political leadership.
https://labour.org.uk/change/kickstart-economic-growth/
How much of The Economy though represents value?
My now elderly neighbour had a business that did vehicle body repairs.
In those days a skilled job that he earned well from, but in the wider perspective it might have been better if vehicles didnt collide in the first place, especially as the vast majority of these were entirely avoidable?
If you have the time Richard Douthwaite’s The Growth Illusion is a good place to start.
Good question.
An excellent book, i just finished, and it may have been yourself or PSR that recommended it
I’ve said before I’m not an economist but I do have eyes , ears and I’ve worked since 1978 , I also have a very keen interest in political history , you could say I’ve lived a bit and seen this country go through many things .
I see a country in massive decline with it’s political class lacking the talent , vision or even the will to stop the decline .
This is the Titanic heading straight towards the iceberg and my gut tells me we are heading for a major catastrophe going down the same old path and expecting the same old failed policies to somehow work when the evidence is clear that they won’t .
Even when things were tough previously in this country I was always positive that things would improve , I had faith that someone , somewhere actually knew what they were doing .
I have none of that faith today and to be honest both myself and the wife are not prepared to live out the rest of our lives here in the UK anymore .
We are leaving , selling up , the quality of life here isn’t going to improve anytime soon .
Labour should have realised that growth since Margaret Thatcher has been poor, as assets and services are sold off.
The last thing Labour should do, is more of the same.
All Labour needs to do, is see what the country and people need, and enable it. I think Abbas Lerner called it functional finance.
We the country need:
☑️More houses
☑️A clean sustainable energy grid
☑️Pot-hole free roads
☑️A 21st century integrated transport system
☑️A job’s guarantee
☑️People to have disposable income
Much to agree with
But Richard, there IS growth!
GDP went up by 0.1% having been -0.1% the month before!
Inflation is DOWN by 0.1%.
We’re saved!
She’s a genius!
Rejoice! Rejoice! (As another Iron Lady once said.)
It must be true, it’s in the Guardian.
Laudanum for the literati.
https://www.theguardian.com/politics/2025/jan/19/rollercoaster-week-for-the-chancellor-ends-in-relief-and-a-lesson-learned-that-fortunes-can-change-very-fast
Round here they are out cheering in the streets,
“Rachel! Rachel!
Growth, Growth, Growth!”
Because suddenly, the cost of living crisis is over, the hospital corridors are empty of trolleys, food prices have fallen and energy bills have vanished into the mist. Pensioners are flinging away their hot water bottles, children with full tummies are out playing hopscotch on the pavements.
ALL IS WELL!
(According to Toby Helm, at any rate, political stenography editor at the Guardian – thanks Toby, your OBE is in the post, Rachel needs you for a sunbeam.)
Sometimes I get so angry that humour is a safer way to express myself in public.
Does it have to be a politician who realises this?
Plenty politicians realise that things are not working but we get the politics of Reform instead or more self-interest and I note that there is post about corruption this morning.
I have been watching the BBC’s ‘I Claudius’ on DVD and the parallels of the story with our own more recent debasement are quite striking – mostly based on malign interference from within a power base – is Putin the new ‘Livia’? If so who is going to be our ‘Claudius’, appointed as Emperor by the Praetorian Guard – up to then a political non-entity but a historian?
I think that change will have to come from an outsider or outside influence or force. Or not at all.
The current systems we have are so corrupt and reward so well – it has become habitual, and within path dependency theory therefore, we need an external shock to that system, known as a punctuation, to pierce this habitual and casual corruption in order to change it.
Politics as been appropriated. We need a clean pair of hands to sort this lot out in my view.
@ Robertj “Laudanum for the Literati.” Excellent description for the Guardian, Independent and Observer!
🙂
As usual,a superb analysis which offers solutions.
I would disagree ,however,about HS2.It would provide much needed extra capacity for the rail network and it’s benefits would extend into the 22nd century.To combat climate change we need much better public transport,trams,buses but the big people movers are rail based,metro systems and trains.This means a much bigger rail network.
We need more rail capacity, undountedly. Do we need it to be that high speed? I question that.
I cannot see why we need the extra speed, especially when you will still end up at Euston where the underground interchange is already struggling to cope with overcrowding. People using the line need to get to final destinations all over London and the South East. Yes, you can change at the Old Oak Common but we need to be even more ambitious considering the railway line will be there for the next hundred years and more.
The Pendolino tilting trains that run up and down the West Coast Main Line (WCML) were built for 140mph running. They are currently limited to 125mph because in the 1990s, the WCML upgrade, costed at c.£2 billionn overshot to £9 billion and the intended signalling upgrade to 140mph running did not materialize.
A proper survey of the WCML could identify and lead to the elimination of blockage and pinch points, increase capacity and encourage more uptake of train usage. 125 to 140mph is an incremental change, but sufficient to attract more passengers. As an example, Wigan to London Euston in 1 hour 45 minutes is a more attractive proposition than 4 to 4.5 hours by M6 and M1.
This is just one thing to think about, and much more effective than a HS2 white elephant.
And it’s just one of many such projects that could easily make a difference.
Hi Richard, would it also be worth distinguishing also between GDP and GDP per capita (a more useful metric for the general population)? It would seem the latter has been dropping for years now, so we are getting a double whammy of no ‘normal’ GDP growth (which in reality only serves the wealthy anyway) and the rest of us are getting poorer as well.
So really, are labour’s intentions actually just to get the rich richer anyway? If being cynical, this could be speculated, no?
Agreed
I wish the ONS would publish that data more often.
there are a couple of hundred or so Labour back benchers who know they will not be re-elected, plus some Lib Dems who would like to do something.
At the moment many of them dare not speak out. Richard hinted at this recently.
But they may decide that something has to be done. Change from the bottom.
I think that may happen. But not yet.
As per your earlier blog. They could ensure potholes are dealt with. Necessary, will create jobs, will be visible, and then, once they see how well that works they could do the same for the NHS, the police, the justice system, child poverty, inequality, social care, housing ….. (in no particular order).
I admit I cannot follow your argument, Cyndy.
I think I CAN follow Cindy”s argument (but please Cindy, tell me if I’m wrong here, or indulging in mansplaining!)
I think the potholes are a straightforward problem (we already KNOW how to fix potholes don’t we? We just pretend we can’t afford it. We can do it badly or properly. Central government creates some/enough money, gives it to LAs & National Highways, and they do the work, creating some taxable employment along the way, wages appear and get spent, debts get settled, local shops sell stuff to pothole fillers and their families, resources get ordered and delivered to pothole filling contractors, from tarmac companies, invoices get paid, more tax, VAT, gets paid, . Car insurance might even go down, like it has with 20mph zones.
Gov’t creates money, spends it meeting a need, and if Fa***e or Badenoch wan’t to moan about it, good luck to them. Inflationary potential seems to be very low, but they can always implement a fraction of the >£90bn “Taxing Wealth 2024” tax changes to destroy some money if needed.
Risk attached to this simple project, v low. Benefits felt by many.
Next step, something more challenging like NHS, Housing or Social Care – but using lessons learned with potholes. Create money, spend it to meet a need. Reap the material and political harvest. Tax any xs money in the economy out of existence with more of that £90bn, if any surplus is detected that isn’t “working”.
Of course it won’t be that simple, and we need action on the big things like NHS NOW, not after an MMT pothole trial run, but I THINK that was what Cindy was getting at. It’s why I raised the subject of potholes in the first place, a few weeks ago and was so pleased when you took it up. It’s a lovely example. IMHO, of MMT being demonstrated in concrete/tarmac form to convince those of us who don’t handle abstract ideas well (like me).
It is possible that repairing potholes could actually reduce GDP… The economic activity associated with repairing damaged vehicles might be larger than the cost of repairs. And discouraging cycling means more use of cars, which clearly increases GDP.
I’m half joking, of course, but unanticipated side-effects are always a trap for the unwary.
GDP = Grossly Diversionary Parameter !
😉
“Or the government spends more into the economy to deliver services, like health and education and so on, which it says it won’t do at present.
Growth is not something in its own right. In technical terms, It’s an epiphenomenon. It’s a statistical consequence of real things happening.
Real things …. need to be done”.
Given we have a decayed, in too many cases Victorian infrastructure, with many hospitals, schools, railway lines, water and sewage services worn out, grossly out of date, or in the wrong place; a renewable investment revolution requiring massive investment on an unprecedented scale, in a world changing far faster than at any time in modern history, and requiring a far greater scale of transformation, and executed faster, than we have ever, either achieved or even attempted (and for which our antiquated country is very ill prepared and frankly is probably not up to the task); it is very difficult to call this necessity “de-growth” when it is going to require an investment and output to achieve even part of the massive shortfall in our ability to serve people in the 21st century with employment, transport, education and health to survive an function in the second quarter of the 21st century; far, far beyond the economic productive capacity of Britain today. Doing real things that need to be done is going to require more, not less output; often using different technologies, but the actual activity of doing things, of investing, and producing real things will require to grow – fast. Failing is so bad an option it is not to be contemplated, but it is where we are headed.
Gareth Dennis backs up Robwil’s positive comment (@11.43am) about HS2 with respect to rail capacity:-
https://m.youtube.com/watch?v=M3afnfNQTu0
I disagreed because we are creating the wrong type of capacity.
Labour’s crisis has come much sooner than expected – they cant cut anymore after 14 years of cuts – and so will have to uturn – , but cant see how they could navigate that politically
Keir Starmer managed the 180 degree shift from “Continuity Corbyn – Corbyn is a friend – nationalise rail and water – Starmer’s 10 pledges – stop central control of CLPs & candidate selection” to purging Corbyn & the left, and centralising control of the party, u-turning on utilities and transport (creating a gap that Reform UK have capitalised on) and deselecting candidates that HE didn’t like the look of, and reneging on his 10 pledges and even some 2024 manifesto commitments.
He really shouldn’t have difficulty with a U turn on the monetary theory his government work to, after all, they use MMT when they WANT to spend, they just don’t admit to it.
Being HONEST about money… now THAT he might have difficulty with!
The irony of ironies is that his initial “Continuity Corbyn” 10 Pledges would offer vastly better prospects than the current resort to serial relaunches based on and around simplistic platitudes and wishes.
This has been a really stimulating thread , full of excellent policy proposals that I can only agree with. But who will deliver them? The current Labour government? (Not a lot of confidence expressed here). A changed Labour approach ie. emerging from amongst the current administration when the reality of Starmerism becomes inescapable? ( Some hopes explored here ). Or from new Social Democratic movements yet to emerge? (Barely explored here.)
This is a real issue for me. By default I retain my Labour Party membership. Yet all around me other members have been suspended or expelled. The “Starmer Stasi” is still active, monitoring members and their beliefs. It seems difficult to imagine that there will be enough genuine Socialists or Social Democrats left in the Party to be able to force the changes necessary.
Yet the non- Labour movements have yet to coalesce into a broad movement capable of challenging the Neo Liberal consensus.
But its not really “early days” with plenty of time to work it all out.
Despite seeming endless bad news and the apparent lack of a ‘prophetic’ leader, we can still make room in our psyches for Hope.
“All human life has its seasons, and no one’s personal chaos can be permanent: winter, after all, does not last forever, does it? There is summer, too, and spring, and though sometimes when branches stay dark and the earth cracks with ice, one thinks they will never come, that spring, that summer, but they do, and always.” Truman Capote