Two fears should haunt Labour this coming year and how it responds will determine the size of its majority and its ability to govern effectively.
Labour fears another defeat and this inclines it to be ultra-cautious. It should also fear having to govern an economy and society in need of bold action. Managing the competing demands of caution and boldness will be a major theme this election year.
There are some parallels with 1997 though this can be overdone. After losing four elections in a row, Labour’s leadership took no risks in 1997. Internal battles with Militant were weaponised by opponents to suggest that Labour was susceptible to take-over by ‘extremists’. In 1992, Tory attacks on Labour’s ‘double whammy’ – claiming a Labour Government would lead to more taxes and higher prices – had damaged Labour’s campaign. Labour’s leadership was determined to eradicate its reputation as a ‘tax-and-spend’ party five years later.
The economy and state of public finances are in a far less healthy state today than in 1997 when Labour last came to power. Additionally, economic growth needs to be accompanied by measures to address environmental challenges as never before. Labour’s £28bn Green Investment Plan exemplifies the challenge. The Tories portray the plan as evidence of Labour’s fiscal incontinence but the reality for all parties is that the pain and costs will only increase the longer action is postponed.
This dilemma may partly explain why there is less excitement in the political air compared with 1997. ‘Things can only get better’ resonated with the public. Expectations today are more sober, even sombre, reflecting the scale of the challenges and a more jaded electorate fed up with spin, broken promises and scandals such as over the Post Office and Horizon.
The Tories’ damaged reputation was key to the 1997 election result. A combination of ‘sleaze’ and economic mismanagement damaged the Tory brand. Sleaze was a very loose catch-all covering everything from ‘cash for questions’ to prurient reports on the private lives of Tory MPs. The Tories might have weathered the sleaze storm but the loss of faith in Tory economic competence was too much. Black Wednesday – 16 September 1992 – when the Treasury was forced to pull the UK out of the European Exchange Rate Mechanism was pivotal. Despite an economic recovery over the following years of the Parliament, the Tories failed to regain their reputation for competence. Over the course of this Parliament, that reputation for economic management has taken a similar hammering. This will be key to the election’s outcome.
Fiscal flexibility finally
The 1997 Labour Government inherited a buoyant economy. But Labour had committed itself to matching tough Tory spending plans for the first two years. Designed to signal fiscal competence and challenge notions of ‘tax-and-spend’, Labour’s manifesto nonetheless included important spending commitments. Tony Blair prioritised ‘education, education, education’, with a commitment made to raise the proportion of national income going to education over five years as well as increasing spending on patient health in the NHS.
Alistair Darling had the task of managing the public finances as Chief Secretary to the Treasury in the 1997 Labour Government. Keeping within the adopted spending limits meant reprioritising existing commitments. In a Commons statement a month after the election, Darling confirmed that nursery vouchers would be scrapped and the money used to provide nursery places for all four-year-olds. The assisted places scheme would be abolished to allow for the reduction in class sizes for 5-7 year olds. To avoid the opprobrium of removing benefits of one kind, Labour introduced alternative, more progressive benefits.
After two years, the constraints were lifted. Public expenditure soared as never before outside wartime. And the priorities attached to health and education spending worked to the great advantage of the new devolved bodies as these increases were filtered through to the Scottish Parliament through the Barnett formula, a mechanism that has consistently proved generous to Scotland. In 2024, Labour needs to be careful not to tie its hands in office by the manner in which it portrays itself as fiscally responsible in the run-up to the election. Working within tight budgetary constraints will limit what it can do if only in the early years.
Nobody knows for sure what the outcome of the election will be though all the indications are that Labour will win – even the SNP has gone from arguing that Labour can’t win in England to arguing that Labour can’t lose.
Labour’s nervousness is for all that understandable. It is caught between the public policy need for bolder action and an even more sober presentational approach than that of 1997. Bold policies are not incompatible with sober campaigning. But sober campaigning may not excite and mobilise support.
The Scottish dimension
The SNP will pounce on any hint that Labour favours English seats as evidence that it will neglect Scotland in the run-up to the next Holyrood elections due in 2026. Labour needs a strong Scottish message. In 1997 that was provided by the commitment to devolution. Labour could then portray itself as Scotland’s national party without being a Scottish nationalist party. Devolution was designed to allow for diversity within the UK and Scottish Labour should not be afraid to be different. Scottish Labour offered distinctly Scottish policies well before devolution and Scottish Labour leaders were never frightened to stand up for Scotland.
The SNP ‘stole’ Labour’s political clothes some years back. Scottish Labour needs to reclaim them. It needs to demonstrate that it is open to further devolution if there are good reasons for doing so without falling into the trap of committing to more devolution as an end in itself. It also needs to show it will be more relaxed in relations with the Scottish Government – if the SNP wants to pick a fight then so be it but London should avoid being portrayed as the Tories have.
A Labour landslide is possible but that is not always good news. Landslides can create tensions within a parliamentary group as more diverse views and interests need to be managed. Francis Pym was famously rebuked by Margaret Thatcher during the 1983 election after suggesting that landslides ‘don’t on the whole produce successful governments’. As a former Tory Chief Whip he was aware of the party management challenges following a landslide but party leaders tend to measure success by the size of their majority.
This has been a problem during this parliament for the Tories just as it has been for the SNP in Holyrood. The interests articulated by Tory MPs returned in the ‘red wall seats’ have been in conflict with the ones of those representing many traditional ‘home counties’ seats. The independence referendum provided unity of purpose despite the diverse views of members in the SNP group following the party’s 2011 overall majority. Divisions have been exposed as the prospect of another independence referendum has receded.
The SNP will argue that Labour will need to prioritise English seats and a strong SNP contingent in the next Parliament is necessary to make sure Scotland’s interests are not neglected. But the SNP argument that Scottish Labour MPs will be lobby fodder is weak. Scottish Labour MPs will supply at least some members of the government. The existence of a body of Scottish Labour MPs elected in 1997, not least the Chancellor of the Exchequer and Chief Secretary, ensured that Scottish interests were not neglected.
The existing two Scottish Labour MPs clearly do not have the collective clout of the Scottish Labour contingent returned in 1997 including members of Blair’s first Cabinet – Gordon Brown, Robin Cook, Alistair Darling, George Robertson, Donald Dewar. But Scottish Labour can turn this to its advantage. While the SNP claims that its MPs will stand up for Scotland, Labour will have Scots at the heart of government. The choice for voters may come down to choosing MPs shouting from the opposition benches or MPs being part of the core executive.
So far, Labour has tilted heavily towards caution. That might take Keir Starmer into Downing Street, perhaps by a landslide. But a more emboldened Labour government will be needed if he wants to secure a second term and assist Anas Sarwar to take up residence in Bute House. The SNP looks as if it is already on its way out of office but much can happen between now and the 2026 Holyrood elections. Starmer cannot afford to be cautious.