This article originally appeared in our Elevenses newsletter.
It’s a familiar tale for the British public. A new government elected on promises of hope and change makes a screeching U-turn the moment they realise the national piggy bank has nothing but a couple of coppers and a loose button rattling around inside. In 2010, David Cameron warned that there were “difficult decisions” ahead as he laid the ground for George Osborne’s painful austerity programme, saying: “Because the legacy we have been left is so bad, the measures to deal with it will be unavoidably tough”. Fourteen years later a new Labour prime minister has just repeated the message almost verbatim in the Downing Street rose garden, saying “tough decisions” are needed to rebuild the country from “rubble and ruin” left by the Tories.
Underscoring Starmer’s first major speech as prime minister was the suggestion that Labour had no idea how bad Britain’s financial situation was. The Labour leader said “things are worse than we ever imagined” because of a £22 billion “black hole” in the public finances, claiming to have found out last week that the Tories had borrowed almost £5 billion more than the Office for Budget Responsibility expected. That, I find hard to believe. Labour will have known full well that the coffers had run dry under successive Conservative administrations, but will have also known that by being upfront about the situation with voters ahead of the election, there would have been no landslide majority. To borrow ‘that’ Jack Nicholson quote, you want the truth? You can’t handle the truth!
The reality is that Labour has been left with an eye-watering tab to pay. We’ve all enjoyed poking fun at Liz Truss and her disastrous, short-lived tenure as prime minister, but her government was responsible for about £30 billion of the fiscal hole which the Treasury put at £60 billion in 2022, all of which was known to Jeremy Hunt when he made tax cuts ahead of the General Election. And recouping money is actually the least of Starmer’s concerns. As he has pointed out, he chaired Cobra meetings with daily checks on the number of prison places available during the riots, which have fallen to under 100 for men in England and Wales. Similar shortages will probably apply to hospital beds come the winter, and “no prime minister should ever be in that position”.
But if we’re to get real about the scale of the problem, it’s also only right that we get real about the causes of it too, which is why Starmer preceded his rose garden speech by jumping on the first flight to the continent to gladhand European leaders. The cost of Brexit to the UK economy dwarfs any damage caused by Liz Truss. It outstrips the economic harm wrought by Covid or the inflationary pressure incurred by the war in Ukraine, and worst of all, it is entirely self-inflicted. If Starmer is genuinely concerned about lost tax receipts or economic growth, then he knows where he’ll find the answers. In his words, not mine, we must “turn a corner on Brexit” and take a “once-in-a-generation opportunity to reset Britain’s relationship with Europe so we can deliver for the British people”. Only then can we start talking about ‘change’ and ‘hope’ in any meaningful way.
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