Keir Starmer’s Labour is asking the right questions

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When Jeremy Corbyn’s Labour party crashed in 2019 to its worst electoral defeat since the 1930s, restoring it to anything near electability was seen as the work of far more than one parliament. That Sir Keir Starmer was able to stand before his party conference with a double-digit opinion poll lead ahead of next year’s election is thanks, in part, to the Conservatives’ bizarre squandering of their own opportunity. It is, though, also a reflection of the journey Labour has made under his leadership. Labour still has work to do to lock in sufficient support from business, investors and the wider electorate. But Starmer has restored to Labour a plausibility that Corbyn had thrown away.

The Labour leader is criticised by some for an overly safety-first approach. Indeed, headline policies announced by Conservative prime minister Rishi Sunak in recent weeks seemed designed to grab attention and present him, not Starmer, as the “radical” candidate: delaying some targets to achieve net zero; scrapping part of the costly HS2 rail project; progressively banning smoking.

Starmer could afford to remain vague about Labour’s programme while the governments of Boris Johnson and Liz Truss imploded. But his conference speech began to elaborate a plan that aims, at least, to grapple with some of the UK’s biggest challenges. He and shadow chancellor Rachel Reeves have rightly put rekindling growth and investment at the heart of their agenda, in part by seizing the potential of the green transition.

Labour has set out ambitious goals, including cutting record NHS waiting lists through increased overtime, paid for by scrapping “non-domiciled status” or tax breaks to some UK residents whose permanent home is elsewhere. It vows to “get Britain building again” by easing planning controls and devolving powers to regional authorities — including new infrastructure and 1.5mn homes in five years to ease the shortage that has priced the young out of housing.

Such targets are always far easier to set than to deliver. A new Labour government would face the same Nimbyist barriers as the Tories. The worst fiscal inheritance for decades would hem in its spending. Estimates of the proceeds of ditching non-dom status, for example, may prove optimistic.

Unlike previous incoming Labour administrations, however, it would not have to push up taxes sharply itself since the Conservatives have already done so. Even modest enhancements to growth would begin to flow into higher revenues. But Starmer’s Labour is relying on its answer to the US Inflation Reduction Act to do much of the heavy lifting in raising growth. It needs to provide more detail on plans to bolster other parts of the economy. It is unclear, too, how feasible it is to borrow £28bn a year for green investment, proportionately bigger than the US plan — even by the middle of the next parliament — without breaching its self-imposed fiscal rules.

Business bosses who attended Labour’s conference in surprising numbers will be attracted by the prospect of greater stability, green growth and better EU relations, lighter planning, and a partnership that uses government money to pump-prime private investment. They will worry about continued high corporate taxes, enhanced workers’ rights that could impede flexibility, and Labour’s sometimes knee-jerk regulatory instincts.

Yet Starmer inherited a Labour party more akin to a protest group, in thrall to a narrow hard-left base. His achievement has been to turn it once again into a national party — while it is the Conservatives who are now largely talking to themselves. Business and investors will not like all of the answers it is offering; some still need a lot of elaboration. But it is focusing on the right questions.