Turning point

It is a heady moment. After 14 years of national decline, Labour has returned to power. The prime minister and half the Cabinet are Fabian members. Our values and ideas, peppered through the manifesto, can at last become reality.

This election result was a rejection of Conservative chaos and extremism that held back prosperity, harmed our climate and deliberately sowed division. Instead, people voted for stable, grown-up government marked by integrity, compassion and ambition for the country.

Labour ministers have hit the ground running, proving that decisive action can cut through Tory torpor. The party has a huge mandate and should not hold back from using it. We know the Conservatives would not, if they were in the same position.

There is no need to tread on eggshells. Concerns about the supposed fragility of Labour’s electoral coalition are overplayed when the Tories have barely 120 MPs. People who voted against the Conservatives knew they were ushering in a Labour government, even if they backed other parties.

The new government has promised big structural reform. In employment, the most significant expansion of labour rights since the 1970s. In transport, rail renationalisation and the return of bus franchising and municipal ownership. Planning reform on a scale unseen for decades. And starting the journey to a National Care Service, on which the Fabian Society has been advising the party.

If Labour can achieve its goals, it will transform the country. Ministers’ stated aims include securing the fastest economic growth in the G7, decarbonising electricity by 2030, building 1.5m homes and halving regional health inequalities. These are huge ambitions and they may not come to pass. But it is better to try and fail than not to try at all. In the years ahead Labour’s wellwishers will be there with fresh ideas to help keep such pledges on track.

On some questions Labour now needs to say more where the manifesto was light on detail. The party wants to reduce child poverty and prevent the need for food banks. But what are its yardsticks for success and what is the plan for getting there? How can Labour achieve its goal of closing the opportunity gap for children or raising family living standards? The government will need concrete targets and plans soon if it is to be able to tell people at the next election that they are better off under Labour.

The constraining factor is not political headroom but cash. The public finances are in a dire state and Rachel Reeves’ first task is to avoid having to make more cuts. But there is no avoiding the fact that the public’s expectations of Labour depend on extra spending. This is not ideological ‘big state’ posturing but a statement of reality. Many public services are on the brink of collapse and spending also has to rise to account for demographic change and the global security threat.

Forecasts for growth and tax revenues are unlikely to change much in the short term, which means Labour will need to strike an awkward balance between spending restraint, more borrowing and tax. In the autumn the party should sidestep its fiscal rules when it comes to borrowing for investments that create productive assets. And it should review taxes and tax loopholes that mainly affect affluent families and big business, while keeping its manifesto promises intact.

The jubilation of recent weeks will inevitably fade as Labour faces up to the hard dilemmas that arise from its dreadful inheritance. But ministers will approach tough choices with strong Fabian values, remembering that you can achieve more in a week of government than a decade of opposition.

Image credit: Keir Starmer via Flickr