Labour policy is shifting ever further rightwards. That won’t and can’t change as long as only tainted City money is filling the party’s empty coffers
What has happened to Britain’s opposition Labour Party under Keir Starmer? The familiar adage “follow the money” helps make sense of the party’s policy shifts ever further rightwards.
Labour plumbed new depths earlier this month when it conceded that, in power, it would maintain the government’s cap on child benefit, restricting financial help to the first two children in a family.
The cap, one of the Conservatives’ most socially regressive measures, was denounced as “heinous” and “obscene” by shadow cabinet ministers after it was introduced. Even Starmer called it “punitive” when he was trying to win over Labour members in the 2020 leadership vote.
Hundreds of thousands of children and their families are reported to have been driven below the breadline since the benefit cap came into effect in 2017.
No other country in the world has a similar policy. But in Britain, punishing children is now a bipartisan issue.
It is just one of many progressive policies Starmer has ditched in recent months: from funding tuition fees to ending the so-called “bedroom tax”.
The proffered excuse is always the same: that Britain cannot afford to care for its most vulnerable citizens. Or as Shadow Culture Secretary Lucy Powell put it: “There just, frankly, is no money left.”
And yet at the same time, Labour is tearing up its pledges to raise government revenue by increasing income tax on the rich and by imposing a windfall tax on tech firms.
Popular insurgency
Strangely, too, Labour has promised it will continue the government’s policy of spending billions on shipping weapons to Ukraine, to perpetuate a war that is killing Ukrainians and Russians alike and chiefly benefits the arms industry.
Underscoring quite how low a priority caring for children at home now is for Labour, compared to fighting a proxy war abroad, Starmer repeatedly chuckled at a conference last week as he discussed the “hard choice” he had taken on child benefit.
Notably, he was sitting alongside Tony Blair, a former leader remembered both for refashioning the party as “New Labour” in the 1990s – to snatch the centre-right ground from under the Tories’ feet – and for launching a criminal invasion of Iraq alongside the United States in 2003.
Starmer has been actively rehabilitating Blair’s image within the party, as well as leaning heavily on figures such as Peter Mandelson, Blair’s former chief adviser.
The ugliness of Labour’s new iteration derives from more than the fact that Starmer has been frantically purging the party of anything that might smack of the socialist-lite agenda of Jeremy Corbyn, his predecessor.
Corbyn’s election by the wider membership as party leader in 2015 unleashed a political transformation that left the party bureaucracy and parliamentary party reeling.
Hundreds of thousands of ordinary people, many of them disillusioned with a British politics that had for decades offered them no meaningful political choice, hurried to sign up for a Corbyn-led party.
Soon Labour’s membership had rocketed to more than 560,000, making it the largest party in Europe. It presaged a grassroots movement that threatened to take politics out of Westminster’s rarified corridors and initiate a popular, street-level insurgency against austerity.
That danger needed to be neutralised – and Starmer, knighted at the age of 52 for services to the British state as head of the Crown Prosecution Service, proved to be just the man for the job.
As well as effectively ousting Corbyn from Labour, he set about abusing, alienating and persecuting the left-wing membership.
Coffers dry up
The latest victim is Jamie Driscoll, the North Tyne mayor who has been barred from standing for re-election as a Labour candidate – apparently because he is seen as too leftwing and has been a success in his job. The danger is that he makes Starmer look like a sell-out.
Within a couple of days of setting up a crowdfunder, Driscoll had built a war chest of more than £100,000 to run as an independent.
To get a flavour of why Labour has no place for a politician like Driscoll, who persuasively argues that it makes both financial and moral sense to implement kinder, fairer policies, watch him take on former Blair adviser and Starmer loyalist John McTernan on Newsnight.
Since Starmer took charge of Labour three years ago, party membership has plummeted, with the left departing in droves. According to Labour’s own figures, more than 170,000 had quit by last summer.
A shrunken, insular party is just how Starmer and his advisers want it. It puts Labour’s most reactionary elements firmly back in charge.
But that comes at a cost – quite literally.
Under Corbyn, Labour’s finances were the healthiest they had been in decades. In 2017 alone the party raised nearly £56m – £10m more than the Tories – much of it from the swollen ranks of new members. In the 2019 general election year, Corbyn’s Labour was able to outspend the party of the rich.
But as Labour has moved rightwards, with members exiting en masse and major unions reducing their funding, the party’s coffers have dried up. Labour is said to be near-broke.
If Labour can’t, or won’t, rely, as Corbyn did, on the dues of ordinary people – whether unionised workers or party members – it must turn instead to a handful of donors with deep pockets. In other words, it must go cap in hand chasing the same tainted money, from the City and big business, as the Tory party.
Which is exactly what Starmer has been doing.
This month Bloomberg, a financial sector news agency, reported that Rachel Reeves, Labour’s shadow chancellor, had sent out invitations to Tory donors in the City, wooing them with the offer of a “one-on-one breakfast meeting”.
Earlier this year, Starmer and Reeves made the rounds of the World Economic Forum at Davos, rubbing shoulders with global business leaders to persuade them that Labour would be more aggressively pro-business than Prime Minister Rishi Sunak, a former hedge fund manager.
Already two former Tory party donors, Kasim Kutay and Gareth Quarry, have switched sides to Labour. Others appear ready to follow suit.
Hostage of Big Business
Labour’s move to the right is not simply, as many assume, a reflection either of Starmer’s natural political instincts, or of an opportunistic need to court the supposed “Red Wall” voters who deserted the party in 2019 over Brexit.
There is nothing tentative or temporary about the shift, whatever commentators at Britain’s liberal-left Guardian newspaper claim. After opposing Corbyn at every step, its leading columnists have been endlessly indulgent of everything Starmer does.
Martin Kettle compared Starmer’s approach to the “rope-a-dope” strategy of boxer Muhammad Ali, when he encouraged an opponent to exhaust themselves before he landed a knockout punch. Kettle’s implication is that once Starmer has won voter’s trust, and the next election, he will be ready to show Labour’s more progressive face.
Polly Toynbee made a similar case. “Lack of boldness”, she argued, is the price Starmer must pay to win, before he changes tack in power. Or as she wrote: “Without doubt [Starmer and Reeves] will do, as [Blair’s] New Labour did, far more than they dare promise while tip-toeing towards the finishing line.”
But such analyses ignore the elephant in the room. Starmer has consciously chosen to make Labour hostage once again to the interests of big business rather than party members. He has intentionally stripped out the already fragile democratic structures in Labour to allow a tiny clique of the super-rich to dictate party policy.
He has reduced the political fight in Britain to one about who will promote the fastest “economic growth”. He is doing so in an already turbo-charged, neoliberal capitalist system in which decades of an obsessive pursuit of growth have driven the world to the brink of climate catastrophe.
This was Blair’s playbook. The former Labour leader made it his priority – in an economic era very different from our own – to court the business community. Some called it the “prawn cocktail offensive”, and it was viewed as the key that unlocked Labour’s landslide victory in 1997.
Top of the list in Blair’s charm offensive was Rupert Murdoch, the tycoon whose media empire often boasted it decided who served as prime minister. Blair wormed his way into the Murdoch family’s affections so effectively that he was later asked to be godfather to one of Murdoch’s children.
Bound into inaction
Toynbee and others point out that, in government, Blair promoted far more generous policies than he ever dared to let slip while leader of the opposition.
But that was the late 1990s, a boom time for business. There was still enough cash sloshing around the global economy for Blair’s private finance initiatives – giving corporations the chance to extract profit from public services – to paper over the cracks, at least until the crash of 2008.
Today, big business won’t offer Starmer the deal it gave Blair. In these reduced times, corporations will be looking to bleed profits from the economy as aggressively as they can. Starmer is chaining himself to the demands of a tiny wealthy elite in the dying days of “business as normal”.
Once in power, Starmer will be just as enslaved to the demands of the corporate elite as he is now, while “tip-toeing to the finishing line”. As prime minister, he will be as much of a disappointment as he is leading the opposition – probably more so.
The disillusionment he has awakened among Labour Party members will spread to the broader electorate.
A prime minister whose hands are permanently bound to inaction and indifference by the dictates of the billionaire class, who is unable to offer an alternative to 13 years of Tory austerity, is a leader who will end up fuelling the very street-level insurgency he was supposed to avert.
Starmer has told us who he truly represents. It is time to stop the wishful thinking and listen.
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