Has Labour already sold out?

Rachel Reeves represents a party paralysed by fear

I’ve written for UnHerd about how Labour is already selling out before it’s even in office, by pre-committing a future Labour government to permanent austerity. This is the legacy of the Labour’s takeover by the Blairite neoliberals: a party paralysed by fear — of the markets, of the orthodoxy, of Washington, of the voters.

Back in 2021, Keir Starmer put forward ambitious spending plan, which involved borrowing £28 billion a year until 2030 to spend on green transition policies, such as subsidising wind farms, insulating homes, building battery factories and accelerating Britain’s nuclear programme. One may disagree on the specifics of Labour’s plan, but at least it reflected an acknowledgment that achieving greater economic resilience — “green” or not — requires big spending commitments.

However, as several commentators pointed out at the time, Labour’s spending plan would be almost impossible to reconcile with its obsession with fiscal discipline and “sound money”. Under the Corbyn leadership, the party adopted a set of stringent “fiscal rules” aimed at cutting government debt, which it promised to abide by once in government, which were then further strengthened by the new leadership — and no one is more rigidly committed to those rules than shadow chancellor Rachel Reeves. It’s therefore hardly surprising that Reeves recently announced she was abandoning the party’s policy of big borrowing because “no plan can be built that’s not on a rock of economic and fiscal responsibility”. Keep reading here.

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Best regards,

Thomas Fazi

Website: thomasfazi.net

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Latest book: The Covid Consensus: The Global Assault on Democracy and the Poor—A Critique from the Left (co-authored with Toby Green)