When Keir Starmer became Labour leader he was unpractised in politics. For advice, he naturally turned to someone who had done his job before and with whom he had a good personal rapport: Ed Miliband.
As Starmer grew in confidence he stayed friendly with Miliband, deferential to his status as a veteran of government and appreciative of his sincere enthusiasm for the energy and climate brief. But the new leader was also ruthlessly focused on winning power, and increasingly alert to toxicities in the Labour brand. He was persuaded that the journey to Downing Street could be completed only by jettisoning policy baggage and paying less heed to people associated with past failure.
Miliband’s counsel was downgraded. I remember one shadow cabinet minister observing acidly that “if Ed wants to be helpful he should offer to visit every constituency Labour party in the country and explain how to lose an election”.
The arc of Miliband’s influence describes a tension that is still unresolved in the Starmer project – between Labour’s self-image as a party with radical purpose and the constant fear of alienating voters with the wrong kind of radicalism.
The pattern was prefigured in the fate of the £28bn annual investment in low-carbon technology that Rachel Reeves pledged in a speech to Labour conference in 2021. She said she would be Britain’s first “green chancellor”.
Reeves, a former Miliband protege, had held the shadow Treasury brief for less than six months. She later came to see the £28bn figure as a fiscal and political liability – a heap of ammunition for Tory election propaganda that would depict Labour as debt-addicted spendthrifts. The green chancellor wrought herself instead into an “iron chancellor”. Miliband’s climate-friendly industrial strategy made it into the 2024 manifesto, but with a drastically reduced budget.
That was still a more generous upfront funding commitment than most other departments received. The ambition to make Britain a “clean energy superpower” was, after all, one of the five missions that Starmer declared as the motivating purpose of a future Labour government.
But by last month, the missions were deemed too vague. The message was rewritten with “milestones” to measure progress. Climate action became a sub-clause appended to a promise of lower household energy bills.
Now, once again, the government is restating its ambitions. And, once again, that means a leaner ration for Miliband. Reeves has declared that economic growth is the overriding goal in every department. If that involves new runways at Heathrow and Gatwick, the energy secretary – a longstanding opponent of airport expansion – will just have to suck it up.
His compensation is that the pro-growth agenda also entails a massive liberalisation of planning regulations. That will make it easier to erect the turbines and the electricity pylons necessary to meet goals for greener energy production.
Climate policy, growth and political strategy don’t have to be in conflict. The case for transition to low-carbon industry can be made in terms of public benefit (people like clean air and fear extreme weather); national security (Vladimir Putin doesn’t control the flow of air to windfarms); and future prosperity (the world needs this stuff and Britain should be at the forefront of developing it).
But there are awkward trade-offs between long- and short-term effects. Boosting economic activity right now is carbon intensive. Some of the cost of switching to greener tech has to be borne by consumers. Voters who have endured years of shrinking living standards and rising inflation are easily spooked by talk of taxes on gas boilers and deadlines to swap their old petrol cars for swanky electric ones.
Across Europe, populist rightwing parties have made gains by casting environmental policies as expensive luxuries charged to ordinary folk by smug elites. Nigel Farage wants to scrap net zero targets. The Tories, under Kemi Badenoch, will gravitate in the same direction.
The potential resonance of an anti-green backlash among swing voters is a concern for Morgan McSweeney, Starmer’s chief of staff and the man in charge of plotting the route to a second term. McSweeney’s internal critics accuse him of an unhealthy obsession with Reform UK and an outdated hostility to anything that carries even the whiff of leftism. His allies say he is shrewdly mapping battle lines for the next election. Either way, allergic sensitivity to anything that Conservative media like to caricature as “eco-zealotry” has crept into the government’s economic message.
Labour MPs submit to the logic that a growing economy is obviously better than a recession and Reeves’s plan is the only one they have. But confidence in the chancellor’s judgment has been shaken by the turbulence of Labour’s first six months in office – messy fights with pensioners and farmers; the lack of political or economic dividend from the budget.
Reeves seems to have overestimated how grateful the public, businesses and financial markets would be for the end of Conservative rule. Voters were supposed to admire the early infliction of pain for the sake of fiscal responsibility. Investors who had taken fright at Tory chaos would flock to Labour’s newly stable regime and not sweat tax rises. The failure of any such credit to turn up in the government’s accounts has rattled the Treasury.
In Reeves’s defence, she has been consistent. Most of the package touted as a plan to unleash Britain’s productive potential builds on things she said in opposition. And it might work.
But there are worrying symptoms of panic. Governments with stockpiles of pro-growth policy don’t publicly urge regulators to come up with ideas of their own. The complaint that rumbles along the Labour benches, quietly for now but at rising volume, is that the leadership still, after all this time, can’t narrate economic action and political strategy as one compelling story.
There might be a thread linking it all together, but it isn’t obvious. In opposition, Reeves elaborated a distinctly social democratic theory of “securonomics” – an assertion of the state’s duty to cultivate stable conditions for investment and protect citizens from global volatility.
One inspiration was Joe Biden’s multitrillion-dollar programme of green subsidies. Reeves cited the US’s grand adventure in eco-industrial activism as proof that international trends were moving Labour’s way. Donald Trump’s election victory killed that argument.
What was advertised in opposition as an intellectually coherent and globally pioneering new economic model looks more like a disjointed sequence of tactical expedients. Instead of marching boldly forwards, Labour lurches from defensive crouch to arm-waving frenzy and back again. The signal goes out that Starmer and Reeves are determined to get the economy growing. What comes across is the message that their horizons are shrinking.
