Listening to Rachel Reeves today, I couldn’t help but think of a distant heckler. Not someone among the VIPs in that Oxfordshire hall, but rather a woman from Newcastle. I’ve shared her story before: back when the Brexit vote was on the horizon, a London professor had warned the Geordies that leaving Europe would damage Britain’s economy. In response, one of them snapped back, “That’s your bloody GDP. Not ours.”
Now, was it rude and a bit crass? Certainly. But she touched on a profound question for the political elite in Westminster: who exactly are they helping? This question sealed the fate of George Osborne and David Cameron, and it stands just as crucial for Reeves and Keir Starmer.
There’s no mistaking what this Labour government is shooting for. “Growth, growth, growth,” cheered Reeves this week as she made her way to a meeting with Labour MPs. Even after the festive shows, ministers are putting on their own Peter Pan act: they close their eyes and believe. The prime minister dreams of a “growth lever,” while the chancellor wants everyone to start saying “yes.” Meanwhile, from the audience, the everyday voters are crying out: faster, please!
In their minds, magic is on the horizon. The term growth will be slapped onto anything in sight—and even stuff that’s been left behind. Whitehall is already dishing out statements suggesting that needing to register a death at the local council hinders growth. That’s the real downside of death—it clogs up the cash flow.
What ministers really want are the photo ops—they want pictures of themselves in hard hats and high-visibility jackets. There’s Angela Rayner, living it up in front of a partially built housing estate. Over there’s Ed Miliband, inspecting a wind farm with deep intensity. You might remember another politician doing something similar: George Osborne touring construction sites to shift focus from the hardship inflicted on the working poor. Even as Labour ministers celebrate future infrastructure projects that won’t start until the late 2020s at the earliest, the chancellor is preparing for another wave of austerity this April. Just around the corner, the Office for Budget Responsibility is going to lay out how far off track the public finances are from the unbreakable fiscal rules Reeves talks about. With the economy stagnant since summer, she’s gearing up to cut social security and civil service jobs.
What would our Newcastle heckler make of all this? I think we can guess. The draw towards Brexit, Jeremy Corbyn, or even Boris Johnson stemmed from a failed economic model touting low taxes, low costs, and light regulation. Now, with low taxes off the table and Britain having split from its close trading ties with Europe, the Labour government is gutting what regulation it can.
The same ministers who once fumed over the rip-off price of Oasis tickets now instruct watchdogs to be “pro-growth.” They shuffle aside one competition regulator chair to bring on board someone from Amazon—an entity Reeves criticized in 2018 as a monopoly blocking competition, dodging taxes, and exerting harsh control over employees. Starmer, Miliband, and the five other cabinet members who in 2018 condemned a third runway at Heathrow as a climate catastrophe appear to have forgotten their stance. In the quest for growth, the government sides with car finance firms over consumers and encourages mortgage lenders to heap more debt onto first-time buyers, even as financial regulators caution Parliament that this could lead to bad loans and fraud.
As for their growth strategy, it resembles a chaotic dash, grabbing anything that’s handy and might suffice. They’re pledging no hefty tax raises before the election, only to hike taxes by £40bn afterward; there’s a huge fund for green energy investment that seems to shrink by the day; “growth everywhere” that really becomes candies for London and the south; austerity is claimed to be over, except for all those government departments left starving for funds. The same week Joe Biden warned against a new tech oligarchy, some of his former students at Downing Street cozied up to the AI sector.
Today’s Labour government, which came into power with promises of change, is currently trying to entice investment—and doing it in the most credulous way. The chancellor, who once vowed to clamp down on tax loopholes for non-doms, is now saying she’s “listening to the concerns raised by the non-dom community.” Yes, the non-dom community! This is identity politics at its most insincere. What’s next, a Non-Dom History Month? It’s worth noting that the chancellor hasn’t given as much attention to those struggling to heat their homes this winter.
In other times, this would’ve been labeled trickle-down—except there’s not much actually trickling down. As research by the Foundational Economy Collective points out, of all the take-home pay growth from 1999 to 2020, the wealthiest 10% scooped up 25%, whereas the poorest 10% only saw 3%. The headlines, once full of stories about the cost of living crisis, seem to have moved on, but for those facing hardship, the problems persist. Between 2022 and the eve of last summer’s general election, researchers found that the poorest 10% allocated 95% of any increase in take-home pay to food, rent, energy, and transportation—just the basic needs.
So whose bloody GDP is it? Instead of handing out incentives to big firms for some picture-perfect moments and claiming it’s all for growth, Labour ministers should prioritize shielding households from rising utility bills, transport, and housing costs, which remain substantial and aren’t likely to drop soon.
Polls indicate precisely what the voters want. Just this week, two surveys showed the cost of living sitting near the top of reasons voters are frustrated with Starmer, just after cuts to the winter fuel allowance. Yet, I suspect ministers might not heed this till next year, by which time the photo ops won’t have translated into improved polling and Nigel Farage’s team will be gearing up to give Labour a run for their money in the Welsh Senedd elections. Alas, here’s to the next reset.
Aditya Chakrabortty is a columnist for The Guardian.
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