There was an embarrassing moment for Keir Starmer at last Wednesday’s Prime Minister’s Questions. Starmer had asked Boris Johnson to extend £500 self-isolation payments to more workers so that they could afford to stay off work, and to rule out tax increases on households and businesses. Johnson scoffed at Starmer’s lack of ambition, promising to ‘do far more than that paltry agenda’ in the forthcoming Budget.
Recent weeks have seen the Tories float, via the newspapers, the possibility of an increase to corporation tax—possibly raising it as high as 25 percent, if the reports are to be believed—and an excess profits tax on those businesses which have done exceptionally well during the pandemic. Amazon’s UK sales, in particular, rose by 51 percent last year to total £19.3 billion. A Tory backbench rebellion has been threatened, meanwhile, if a rumoured increase to capital gains tax goes ahead.
Starmer’s Labour, of course, isn’t resisting the prospect of tax increases on business because it has embraced the tenets of Modern Monetary Theory (despite its briefings against Burgon and Lavery). Instead, its intention is to send a signal to big business: namely, that it won’t intrude on its prerogatives, and that the more combative approach of the Corbyn years is over. In adopting such an uncritical ‘pro-business’ stance, Labour leaves itself with little to say about the predatory conduct of even the biggest monopolies, usually also notorious (like Amazon) for their employment practices.
Focus groups are often blamed for Starmer’s timidity, but if they are telling the Labour leadership to oppose any increase in corporation tax, they’d be out of step with the country at large. Polling indicates that the move would be very popular: 67 percent of voters, including 76 percent of Labour supporters, say they’d favour an increase. Britain’s existing corporation tax rate, at 19 percent, is the lowest in the G7. Its long mediocre level of business investment suggests that such low corporate taxes have done little to stimulate it.
It’s true that Labour leaders have always sought to reach a concordat with capital in order to implement their reforms. Even Jeremy Corbyn did it, attempting to drive a wedge between industrial capital and small businesses on the one hand and finance capital on the other, while offering to sugar the pill of higher wages and strengthened employment rights with large-scale infrastructure investment. But business knew which side its bread was buttered on: in the crucial last quarter of 2019, Tory donations totalled an eye-watering £37 million.
Nonetheless, Corbyn’s Labour did have much success in reframing the economic debate, shattering the austerity consensus at Westminster. So much so, in fact, that it effectively rendered austerity itself a dirty word, as evidenced by the Tories’ apparent abandonment of it under Johnson. This is also part of a global shift towards a more state-led, dirigiste economic strategy, accelerated by the pandemic. But as Paolo Gerbaudo points out, this strategy will reflect the priorities of those carrying it out – not those of ordinary workers.
However, Keir Starmer and the Labour Party are so desperate to be seen as sensible and reliable managers of British capitalism that they appear petrified of articulating any alternative set of priorities. Starmer, at pains to be seen as constructive and as acting in the ‘national interest’, has largely restricted his criticisms of Johnson government to the administrative and procedural. Perhaps his focus groups are telling him that this is what the public wants, but recent opinion polls suggest that all it’s done is let the Tories off the hook.
No wonder Johnson looks like he can scarcely believe his luck. Not only has his government managed to shrug off 120,000 Covid deaths, but he’s also faced with an opposition that no longer dares to make any onerous demands of him. Starmer rose to the Labour leadership telling party members that “another future is possible”, but nearly a year into his tenure, we’re yet to see a vision for one. He may talk about emulating the Attlee government, as Labour leaders often do, but the substance doesn’t measure up to that rhetoric.
Instead, it’s the Tories who are talking about the future in bright and ambitious tones. But we shouldn’t overstate the extent of this apparent Damascene conversion. Also reportedly in the offing for Wednesday’s Budget is a three-month extension to the stamp duty holiday, which—while falsely presented as a helping hand for first-time buyers—has primarily benefited existing homeowners (and landlords) by boosting house prices. Labour could seize the initiative here, equipped as it already is with an ambitious housing policy. Will it?
The signs are that it won’t. You might think that having already lost so many of its old strongholds, Labour would be less cavalier about the base of support it still has, including among young workers, renters and minorities. But the current party leadership seems to have little instinctive understanding of them or their needs, probably assuming—as Peter Mandelson is once said to have done—that they have ‘nowhere else to go’. We will have a better idea after May’s local, Scottish and Welsh elections how far that assumption holds.
All this is consistent with the general pattern of Starmer’s leadership to date. Where Corbynism raised previously ignored or marginalised demands and opened up new possibilities, Starmer—rather than building on that foundation—has sought to close them off again. Instead of raising people’s sights, he has lowered them. The lively, sometimes unruly movement politics of the Corbyn years has been replaced by the heavy hand of bureaucracy and managerialism, internal party democracy treated with open contempt.
Perhaps if the current Labour leadership were more willing to take on difficult arguments itself, this would be easier to swallow. Yet the only arguments it shows any enthusiasm for are those it has chosen to have with the left. If only it was prepared to bring that sort of energy to the fight for the social change it still claims to aspire to: we’d probably be well on the road to a much fairer, more democratic, more sustainable and happier society than the troubled, alienating and flagrantly unjust one we’re currently living in.