Tony Blair’s essay on the challenge facing the Labour party has, unsurprisingly, sparked a heated debate and there have been critical responses from Andy Burnham, Wes Streeting and Keir Starmer. In this post I want to summarise briefly the key arguments and explain what I think each has got right and wrong.
Blair sets out his view of the problem simply:
The government’s principal problem isn’t Keir’s personality. Or a failure to communicate “our achievements”. Or a need to assert more strongly Labour’s “values”. It is because we don’t have a worked out, coherent plan for the country in a fast-changing world and are in the wrong political position from which we can devise one and win a second term.
Blair goes on to summarise an argument that he made at greater length in his 2024 book, Ón Leadership:
Governments which succeed don’t start with a personality contest. Or a political question — as in, how we “save the country” from Reform. They start with an idea, a project, a governing purpose, an analysis of what is wrong and a plan to put it right.
This, not the absence of “better communications” or of a “charismatic” leader, has been the defining problem of the government. Too often ministers seem to totter in the breeze. To lack ballast.
There are two epochal changes happening in the world today — one geopolitical, the other technological — and Britain is not prepared for either. They require radical change in policy, the system of government and politics. The best political space from which this can be achieved is what I call the Radical Centre.
The centre is where you put policy first and politics last. So, you begin with the question: what is the right answer? And only once you have that, do you engage in the political task of persuading people of it.
In his response, Andy Burnham argues that Blair is missing the point:
The fall in the living standards of millions, and the reality that life has got harder for most year on year since the financial crash in 2008, is, I believe, the gaping omission in his analysis.
This has been the single biggest driver of the turmoil in politics he describes and the cratering of support for traditional parties of right and left, here and around the world.
Burnham goes further, and argues that the problem was not just the response to the 2008 financial crisis but the two decades of policy that led up to it, which leads him to condemn what he calls “forty years of neoliberalism”:
The Labour government in which I was proud to serve did many great things. It did not, however, take us off the direction set by Thatcher. For instance, the failure to reform right-to-buy and fully restore the public housing stock is the root cause of today’s housing crisis. Similarly, acceptance of the deregulation and privatisation of essential services is the same for the cost of living crisis.
This has given us 40 years of neoliberalism and the simple truth is this: it has not been kind to communities in Makerfield and those like them across the UK. Trickle-down economics did not in the end trickle down very much at all.
In the twenty or so years before the crash, those communities were weakened by deindustrialisation and a failure by governments to intervene to protect regional economies. From that weak position, the twenty or so years after the crash gave us prolonged austerity, the collapse of local government and the hollowing out of high streets.
Keir Starmer makes a similar argument in his response to Blair on Substack:
The first embers of the populist fire are surely economic and I have long believed 2008 to be the moment they were first lit. Yes, Tory austerity then douses them in petrol and makes everything immeasurably worse. But even before that, Britain’s economic model was struggling to deliver higher living standards for enough people or places in our country. And the financial crisis itself, including the necessary bank bailouts, clearly called into question the fairness of the entire economic bargain.
However, there are a couple of problems with this line of argument. First, although Labour’s recent collapse in support has been dramatic, it is part of a much broader trend across western democracies in which centre-left parties have lost support as the traditional industrial working-class has got smaller. This trend did not start in 2008 and it was not limited to those countries where governments were following “neoliberal” economic policies. (I have explored this in more detail here and here.)
Second, the talk about forty years of neoliberalism implies that the economic process of deindustrialisation began with Mrs Thatcher, but that is not true. The proportion of British workers employed in manufacturing has been declining since the 1960s, and Labour governments in that era did not have very good answers of what to do about it. You can criticise Thatcherite deregulation and privatisation – but old Labourite intervention and nationalisation did not have much going for it either.
In his critique, Wes Streeting recognises this point:
The answer to global disruption cannot be a longing for the Britain of the 1970s, nor even the Britain of the 1990s. The task of progressive politics is not to recreate yesterday, but to ensure ordinary working people have power, protection and opportunity in the world now emerging.
Nevertheless, Streeting’s view is still that Blair is missing the key point:
But here is the striking weakness at the heart of Tony Blair’s intervention: across thousands of words about technology, geopolitics and political strategy, the defining issue of our age is barely confronted at all. Inequality – the economic, social and democratic fracture running through modern Britain – is treated as peripheral rather than fundamental. But inequality, rather than being incidental to the crises reshaping western democracies, is actually their cause.
Now, I’m not convinced Streeting is correct that it is changes relative inequality rather than absolute living standards that have driven voter discontent. But I don’t think that actually matters too much. It is ok for Labour politicians to argue for greater equality on the basis that it is the right thing to do morally, irrespective of whether it is necessary politically.
The key thing is it is going to be much easier to deliver social justice in an economy where you have rising growth and productivity. As the Nobel prize-winning economist David Romer writes, “the welfare consequences of long-run growth swamp any possible effects of the short-run fluctuations that macroeconomics traditionally focuses on.” That is why Blair is right to argue the government needs to have a laser focus on long-run growth and it needs a clear vision of how to deliver it.
Burnham, in turn, is right to argue that this vision could involve a bigger role for the state, including through investment in transport infrastructure in the regions and in partnerships between universities and industries. He is also right that this will involve spending public money.
But this is where Labour needs to avoid wishful thinking, and in particular the idea that if it argues public investment is good for growth, then the bond markets will forget all the times when left-wing governments spent more money and the growth never came.
As I wrote recently for the Social Market Foundation, “If politicians are going to win an argument with the bond markets that they can be trusted to spend a little more in certain areas or tax a little less, they first need to show that they can win an argument with the public on the need to spend less in other areas or to make painful reforms that will increase growth and prosperity in the long run.”
This requires decisions which will make some Labour-sympathetic voters very unhappy, for example over welfare reform, pensions and net zero targets. It also means that the sequencing matters. In order to win over the bond markets, the government will need to sequence their policy changes so that the painful ones come first, and in order to win over the voters, they will need at least some quick wins and a clear vision of how voters will benefit in the long run.
This takes us to the other big area of frustration that many in Labour have with Blair’s critique. They feel he is advocating something that was much easier for Blair in 1997 than for Labour today. Blair could afford to focus on appealing to middle-class voters in marginal seats because he had the security of 200 safe seats in the cities and the north. Now the safe seats are gone and the tough choices look likely to exacerbate the outflow of votes to the Greens. Therefore, the argument goes, Labour needs to focus on holding together what remains of its electoral coalition.
But here I think Blair’s critics are wrong. For a start, if the government cannot deliver long-run growth there will not be enough money to pay off all the interest groups. The political effort will fail if the economics do not stack up, so we should get the economics right.
And there is a point about political strategy too. For a party to be successful over time it needs to have both an electoral project and a governing project, and the two need to be consistent. If Labour’s policy agenda ends up being dictated entirely by the need to stem the flow of votes to the Green, its governing project is being subordinated to its electoral project, so it will lack both moral purpose and political sustainability.
To win and hold power, a party needs the sustained support of a very wide range of people, and this requires talking about – and delivering on – issues that matter to most ordinary people, whether they are currently thinking about voting Labour, Reform, Conservative or Green. These issues are principally their household living standards and their personal experience of public services, and the only way to improve both of those over time is through a stronger economy.
Whatever happens with the Labour leadership, the government will only succeed if it focuses relentlessly on increasing long-run economic growth. To do so it will need a clear vision, shorn of wishful thinking, on how to deliver it. And it will need to explain clearly, compassionately and consistently why it requires tough choices and why those tough choices will be worth it.
