What’s the plan, Keir?

It looks as if Starmer is heading for power. But what the party needs now is a Reagan moment. Not the classic closing argument from his successful 1980 election campaign: “Are you better off than you were four years ago?” – although I think that would be a killer closing moment for Keir Starmer in the forthcoming general election. No, what Labour needs is a “morning in America” moment – the patriotic celebration of change. For all the criticism one can make of Ronald Reagan, he wasn’t a miserabilist. He was relentlessly optimistic and upbeat.

An underestimated aspect of political campaigning is the inspirational side. Sarah Palin, the beaten Republican vice-presidential candidate, sneeringly dismissed President Obama’s political campaign as “hopey-changey stuff”. Yet, the truth is that change elections are won by parties who offer hope as well as change.

According to the polling company Focaldata, nearly two-thirds of UK voters want a change of government. Keir Starmer will be cheered by that. But the challenge he faces is that voters are deeply pessimistic about the possibility that a new government could deliver real change – and that goes for a Labour government too. A study by the think tank UK in a Changing Europe shows that voters are unconvinced “that Labour will do a good job in government on cutting inflation, growing the economy and improving the NHS”.

This broad lack of hope arises in part from the rampant political dishonesty of the last 14 years. Promise after promise has been broken since the Tories first formed a government in 2010, and the biggest political promise was, of course, Brexit. Eight years on, the benefits are hard to discern, while the losses are real and painful. A parade of Conservative prime ministers have come and gone from No 10 – there have been five during a period when normally the UK would only have had two. The whole chaotic performance has shattered public faith in politics.

Entire essays could (and should) be dedicated to determining which of the infamous five is the UK’s worst ever prime minister – but beneath the party political critique, something deeper is going on. When voters say they think that “Britain is broken” they aren’t parroting a cliche. They are saying that something is going profoundly wrong. There’s plenty of evidence that the UK is in crisis – look at schools, the NHS, the armed forces, the water industry, housing and many other areas. It’s no wonder that voters desperately want change. The question haunting UK politics is whether genuine change is possible – or is the UK trapped in an economic and political doom loop?

This places a huge burden on the current opposition. Keir Starmer’s Labour Party is shepherding its polling lead with all the care of a curator carrying a priceless Ming vase. That is understandable – the 2019 election was one of Labour’s worst election results since the 1930s. Since then Starmer’s party has made a very strong recovery, based on a careful foundation of policies.

In the main, these have consisted of small defined tax increases, like VAT on private school fees, or closing tax loopholes for non-doms, to fund symbolic policies in health and education. There will also be regulatory reform to speed up housebuilding and the construction of infrastructure. Labour’s one transformative policy – the decarbonisation of the economy, with the accompanying investment in renewables, the grid, and retrofitting home insulation – became the subject of increasingly bitter internal debate as the proposed sum of £28bn pushed against the limits of Labour’s own fiscal rules.

But stepping back from such specifics, if Starmer is to achieve long-term electoral success then his overall aim must be to define a centrist, decade-long programme to rebuild the country. His caution is understandable, as Labour has never won without shaking off its reputation as a “tax and spend” party. But, in the present climate, political caution could also be read by the electorate as a failure to appreciate the scale of the crisis. It may be a profound misreading not only of what the voters want, but also of what is achievable.

Nostalgia has been a significant driver of UK politics over the past decade. In 2016, leavers voted for a return to the Britain of the 1950s, and in 2017 Corbynites voted for a return to the 1970s. Both decades had their problems, but during both periods, UK growth was stronger than now and affordable housing was widely available.

Just because we cannot return to those times there is no need to dismiss the yearning for them. And underlying the attraction of these decades is a strong, coherent social contract: the political foundation of the 1950s consisted of a Christian Democrat settlement based on the postwar boom, a predominantly unionised workforce, and the patriarchal family wage. The 1970s were, in many ways, the peak of postwar social democracy. Both settlements were bargains between the government and the people and were underpinned by a promise that each generation would live a better life than the one before. It’s time for Starmer to articulate a new bargain.

Labour’s Green Prosperity Fund isn’t a bad place to start. Two thirds of voters – even in the “Red Wall” – see the importance of getting Britain off fossil fuels. A central part of decarbonising the economy is transport, and the move to end sales of new petrol and diesel cars is at the heart of that. That’s good for the environment. On the flip side, it’s bad for the Treasury, which is already losing fuel duty as drivers go electric. The total loss is predicted to be £13bn a year by 2030. Labour will need a new tax to replace this revenue, and the obvious one is road charging. (Though the revenue will be much needed, the reaction of voters in Uxbridge to the introduction of the Ultra Low Emissions Zone (Ulez) suggests that the politics of motoring are very volatile.)

That takes us to the central quandary that will face PM Starmer: that rebuilding the public square will require more tax revenues. There is huge support in the polls for taxing the wealthy, but much less understanding of where wealth in Britain lies. It lies in housing. The figures are extraordinary: the total value of domestic property in the UK is £8.7tn. That is £1.2tn more than in 2020. It’s a completely unearned windfall, which is unequally distributed and inadequately taxed.

Broadly two thirds of property tax is collected by councils, but the brutal unfairness of that tax was brought home by the Economist, which pointed out that: “Buckingham Palace, valued at around £1bn, sits in band H and is charged £1,828 by Westminster City Council, less than an average three-bedroom semi in Blackpool. In fact this year 46% of households in England will receive a bigger council tax bill than the Palace.”

A move to a property charge based on a percentage of market value would give councils a buoyant income with which they could rebuild local services.
The challenge to both of the above reforms is that it breaks the rule articulated by Louis XIV’s finance minister, Jean-Baptiste Colbert, who declared: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

It is also clear that we have probably come to the end of the road of redistribution by stealth – whether progressive, as with Labour’s tax credits, or regressive, as with current “bracket creep”, where wage increases mean more low- and middle-income earners gradually get pushed into higher tax bands. In short, rebuilding Britain will require both new taxes and also public support. This is the sharp end of the Labour Party’s “Ming vase” strategy – caution is one thing, but to gain a mandate for change you need to be open about your intentions.

Previous Labour governments with a nation-building strategy had clear visions. For Clement Attlee in 1945, it was winning the peace. After “Thirteen Wasted Years” in 1963, for Harold Wilson it was the white heat of technology. And in 1997, for Tony Blair reconstructing the public sphere after the Thatcher years, it was “what matters is what works”. The cleverness – and cruelty – of David Cameron’s “we’re all in it together” slogan was that it tapped into a deep British sense of social solidarity – the old blitz spirit. That same solidarity can be the engine of a Starmer government – if he opens out to the public.

Keir Starmer has quipped that the next Labour government will face challenges that are the equal of 1945, 1964, and 1997 combined. And his vision is “mission-driven government”. This has been broken down into five core missions – growth, health, crime, clean energy, and opportunity – a classic New Labour pledge card.

But Starmer can’t wait until the day after polling day to start building coalitions for change. Rebuilding Britain will take at least two terms, and it will require taxing, spending and redistribution.

There are many questions to answer. Labour currently only has the resources of opposition to develop its vision. It must reach outside – as Attlee did when he founded the welfare state on Beveridge’s blueprint, and as Blair did when he drew on the IPPR’s Social Justice Commission, whose secretary David Miliband went on to be Blair’s policy chief. Today, our country’s problems are well diagnosed, but there are also profound prescriptions that Labour could adopt. The Resolution Foundation’s report “Ending stagnation: a new economic strategy for Britain” sets a demanding but deliverable programme for national renewal. Starmer and his team should adopt it.

One danger of Labour constantly trimming its policy offer to avoid the charge of a “tax bombshell” is that it becomes trapped in a conversation that is being conducted on terms dictated by the present Conservative government and echoed by their media supporters. The public see the signals, but they read them as political retreat rather than pragmatic realism. Starmer needs to break this frame and take the conversation to the country. Then, perhaps, a moment of choice might become a mandate for real change.