Wasting a glorious political opportunity: 1 year of Labour in Government – John McDonnell exclusive

“There’s no way the Chancellor’s economic strategy will address the scale of the deep-seated problems our society faces, including 4 million children living in poverty, 2 million poor pensioners & the funding crises in education, health & social care.”

By John McDonnell MP

On Saturday (19^th July) I am hosting a conference to assess the performance of the Labour government under Keir Starmer in its first year.

A number of experts on key policy areas will examine how effective the government has been in the transformative change that people voted for in 2024.

There is no doubt that the incoming Labour administration was faced with the worst inheritance any Labour government had experienced, in fact any government since the Second World War.

In an analysis of the level of cuts inflicted upon our public services by the 14 years of Conservative austerity Andrew Fisher and I estimated that it would need an extra £80 billion a year spending on our public services just to bring us back to the levels of expenditure in 2010, when the Conservatives were elected.

Before the election, no party really wanted an honest debate about the economy and the scale of the challenge any government would face after the votes had been cast.

After the election there was much talk of a black hole in the expenditure plans inherited from the Conservatives to justify some tax rises, but this never laid the basis for the debate that was needed about the grotesque levels of inequality in our society that have held our economy back and scarred our community.

If we had had that debate, there would have been the potential for developing a political and economic strategy based upon the redistribution of wealth and power so that we had access to the resources needed to tackle poverty, invest in our public services and grow the green and sustainable economy we desperately need.

Instead, we have been saddled with a set of economic rules and dictats that undermine the golden opportunity that a massive Labour majority in Parliament provides.

The danger now is watching a glorious political opportunity being wasted, followed not just by a defeat at the next election, but an election of the most far right government ever to come to power in our country.

The elation of removing the Tories from office is giving way to bewildered disillusionment. Bewilderment because our supporters are witnessing a Labour government introducing policies that no Labour government would ever be expected to do.

Labour’s economic strategy, if it can be called a strategy, is based upon growth delivering the tax income needed to fund our public services, with limited tax increases and the hope of ‘trickle down’ from wide-ranging deregulation of finance and planning.

The IFS confirmed that 1% growth delivers about £14 billion benefit to the state. This is nowhere near enough to start to rebuild our public services, and for the last two months our economy has not grown but shrunk.

The largest and most debated tax increase has been the increase in National Insurance, which is a tax on jobs, and reports are now coming in of job losses as a result. This is all because the Chancellor so far has refused to tax wealth and the wealthiest.

The concern that many economists, not just on the Left, have is that far from deregulation bringing about a ‘trickle down’ of wealth, it will take the safeguards off the very people and institutions in the finance sector that brought our economy to its knees in 2008, and resulted in 14 years of harsh austerity.

There is no way that the Chancellor’s existing economic strategy will be able to address the scale of the deep-seated problems our society faces including 4 million children living in poverty, one million in destitution, 2 million poor pensioners and the funding crises in education, health and social care.

That’s why we urgently need to objectively assess where we are as a country and discuss a radically redirection of Labour’s political and economic strategy.

That’s the aim of this Saturday’s conference.

Come along and join us in this venture. 

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• CONFERENCE: Labour in Government: one year on. Saturday, July 19th, 10am, Hamilton House, Mabledon Place, London, WC1H 9BB. Speakers include civil liberties campaigner Shami Chakrabarti; Kate Pickett, author, The Spirit Level: Why More Equal Societies Almost Always Do Better; economist Prem Sikka; Asad Rehman, prominent campaigner for climate justice; Ellen Clifford, DPAC; eminent radical lawyers John Hendy & Shami Chakrabarti; & MPs John McDonnell, Richard Burgon & Clive Lewis. Register here.
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