Labour are positioning themselves to the right of the Tories on economics.

Toby Lipatti-Mesme
5 min readFeb 22, 2021

This is a historical mistake by Labour, and a political misreading of monumental proportions.

We truly live in strange times, with politics in this country flipped on its head, a Conservative government spending big in a crisis in the true Keynesian fashion, with a Labour opposition preaching caution and wooing the business community. Some are still dead set on this being a temporary shift, with an austere budget from the Tories just around the line, and things returning to the “the Tories cut, we won’t cut” politics that now makes up Labour’s comfort zone. Alas, this isn’t the case, and we need to look carefully at the new political battle lines being drawn; they’re unlike anything we’ve ever seen before.

Johnson’s government wants to be popular, and it sees an opportunity coming out of this crisis to own the narrative and reshape the economy in its image. The hard truth is that small state economics is now dead in this country; it’s no longer about the amount you spend, it’s who you spend for, and this is a colossal sea change that spells worry for the Labour party if there isn’t a swift course correction.

With a plan for ten years at least of high spending from an active state on the agenda, the Tories, if they play this right and match up to their rhetoric, can retain power easily for the next 2–3 elections, and establish a hegemonic project in the way New Labour did in the 2000s; positioning themselves as shiny, and new, and all things to all people, and on the public’s side in terms of domestic priorities. 2019 was their 1997, and 2024 will be their 2001 if Labour doesn’t pull its socks up and reckon with this new reality.

Keir Starmer have egg on his face already, and the critics of his set piece Thursday speech have been vindicated in a matter of hours. As Labour insists on “no new taxes”, not just the sensible temporary avoidance of raising council tax or business rates in the midst of this, but also no talk of a windfall profits tax, or a wealth tax, or an increase in corporation tax. Meanwhile, Rishi Sunak (who previously briefed a wealth tax last year before Tory donors presumably got him on the phone) is briefing a raise in corporation tax from 19% to 23%, only 3% off the rise to 26% Jeremy Corbyn advocated.

This dramatic move, the fact it’s even being briefed by a Tory treasury with a chancellor who’s very much a traditional Thatcherite in his personal convictions, tells us Labour’s assessment of what the Tories are going to do going forward was wildly naïve, and when voters look “not at what they say, but what they do” they may see results being delivered, discrediting Labour’s lines of attack and shattering any credibility Starmer thought he had before his speech Thursday.

The Tories are bursting free of the economic box they’ve imprisoned British politics in for the last four decades, and are now willing to wield the full economic tool kit of the state to further their political priorities; making reshaping Britain in their image far easier than it ever was with neoliberalism. A new brand of populist state corporatism is emerging, with special interests have splurges of cash showered upon them, with high state spending, but the thinking still locked into free market means. This’ll mean continued privatisation and potential rights slashed, cushioned within a continuous spending splurge that trickles down to enough people to keep that 45% vote the party needs to continually churn out landslide majorities. We now see “trickle down big government”, as opposed to just “trickle down”, and this is far more likely to pass some rewards down to key voters the Tories need to win, posing huge problems for Labour.

It’s highly likely that in decades hence, the Johnson government will be remembered how we remember the Blair government now; slimy, corrupt, and causing damage it took far too long for people to wake up to. But that doesn’t help us now, because this’ll dawn on people long after it’s Boris Johnson’s country, which we all just live in. The next hegemonic era of politics, with the last won by Thatcherism, now runs the risk of being won by Johnsonism, ensuring Tory rule being the default for another political era, until demographics save us.

Labour are briefing against Anneliese Dodds; now declaring war not only on the left as they did when they suspended Jeremy Corbyn, but now declaring war on the soft left, the faction that won Starmer the leadership, and the faction his whole leadership campaign was modelled for and targeted at winning over. The Labour right don’t like Dodds because she worked at John McDonnell’s Shadow Treasury, and she holds a commitment to bold and progressive economic reforms.

When briefing about potential replacements, we heard Rachael Reeves, and Yvette Cooper, two very blatant actors on the Labour right, and when Ed Miliband’s name was mentioned, Starmer’s team apparently briefed his rhetoric *paraphrasing roughly here* “might offend the business community”. In other words, Ed Miliband is too much of a fiery radical for Keir Starmer’s Labour party, now more intent on wooing big business (this clearly isn’t about the little guy) than improving its dismal polling collapse.

The Tories are getting serious about compromising on their damaging ideology, and actually doing some welcome things, packaged in a putrid mix of culture wars, corruption, and bigotry. Meanwhile, Labour can no longer even call themselves progressive, with Keir Starmer using the most rightwing rhetoric imaginable on the issue of marijuana legalisation, trampling over the most vulnerable (for balance it must be remembered Corbyn’s drug policy was unprogressive as well, but not as wrapped in hideous law and order rhetoric), and he won’t even call on Matt Hancock to resign because a focus group told him not to. The Tories are building new political utopias and realities, bending conventional rules to their will and even talking of a snap 2022 election, while Keir Starmer is unable to oppose anything, too afraid to shape opinion, and too toothless to go big.



Toby Lipatti-Mesme

Insightful and innovative UK journalism and commentary, from Toby Lipatti-Mesme.