Leading the way: new Prime Minister Keir Starmer
The scale of Labour’s victory gives Keir Starmer’s government the strength it needs to fulfil its growth mission.
Unlike in 1997, when Tony Blair came to power on a wave of optimism, the “sunshine” that Starmer referred to in his victory speech has yet to shine. And I don’t mean the wet weather of July.
Starmer and Rachel Reeves spoke passionately in the campaign and manifesto about driving growth through the housing market and net zero by unleashing Great British Energy.
Both are laudable goals. Even with the best will in the world, overcoming Britain’s entrenched obstacles to planning will never be easy. Just think of the things that have not happened because of formidable obstacles.
The HS2 high-speed link to Manchester, Leeds and elsewhere became unviable because of environmental costs.
Heathrow’s third runway is permanently disused. Brownfields are a no-go for housebuilders because of the costly clean-up requirements. Nobody in rural areas wants the huge pylons and overhead cables needed for the upgraded electricity grid required by a green revolution. On a commercial level, it has become almost impossible for Marks & Spencer to redevelop its flagship store on Oxford Street. John Lewis has been battling Bromley residents over its proposal to build a 24-storey residential tower. Nimbyism is a huge obstacle to growth.
If Labour really wants a “mission”-driven economy, it should listen to UCL economist Mariana Mazzucato or, better still, put her at the heart of government, preferably in the Treasury’s growth unit or the Department for Business (or wherever she replaces it). Starmer, Reeves, Rayner and the other senior figures need to look up.
The real path to faster manufacturing is to support Britain’s intellectual brilliance. The UK’s great research universities are the engine of our pharmaceutical, healthcare device, software, AI and technology industries.
Our creative excellence draws on media studies, information technology in film and video and other similar, often maligned, fields.
Defence is the first responsibility of government and it is essential to increase the proportion of GDP devoted to homeland security. But beyond that, R&D is the real path to growth.
The United States, the world leader in technology, spends the most proportionally on R&D among G7 nations, at 3.46 percent of national output.
Israel, the nation of startups, devotes 6% of its GDP to this cause. The UK’s mission should be to increase spending from 2.6% to best-in-class levels.
Governments are easily swayed by legacy problems. When it comes to trade, everyday issues were barely touched on in the campaign. Britain’s biggest water utility, Thames, is struggling under the weight of debt and will need a more generous pricing deal if it is to prosper and invest.
Czech sphinx Daniel Kretinsky has been taking advantage of the regulatory pause caused by the election to seize control of Royal Mail, a deal that must be blocked in the public interest.
A weak board is selling off a crucial asset on the cheap. Worse still, the postal service, like Thames Water, Heathrow and other utilities, risks being overwhelmed by a mountain of debt and the high servicing costs that come with it.
Allowing its sale would be an act of industrial sabotage.
The Government should ignore claims that interference would show that Britain is not open for business.
Labour must also decide whether to support Conservative plans to back conversion to electric arc furnaces at Port Talbot, in the face of union dissent. It must also now decide whether to back small modular reactors designed by Rolls-Royce by suspending a cumbersome auction process, or risk losing Britain’s edge in advanced technology to American and Japanese competitors. Time is of the essence if it is not to sacrifice order prospects from the continent.
Nothing in the election campaign suggested that Keir Starmer and his team were prepared to take bold and exciting decisions that could shake Britain out of its torpor. The critics must be proven wrong.
Money for the elections
