Two out of ten

Anneliese Dodds, Labour’s Shadow Chancellor has set out a well-meaning framework for a future economic strategy in her Mais (Business School, City University London) lecture. The key word, repeated almost ad nauseum is ‘resilience.’ The task of government is to make the UK resilient, and that means longer term planning, a focus on value for money in the public sector and tighter supervision of economic policy, amongst other things. Sadly there was not one mention of the City and its obsession with short-termism. There was no critique of the current capitalist model. No hint of even the mild analysis of the latter once proffered by Ed Miliband. He was much ridiculed for suggesting there was anything remotely wrong with the current capitalist model, and that experience I fear will drive a Starmer-led Labour Party into what I think will eventually be called the ‘resilient capitalism’ model, which only seeks to tweak the Third Way of the Blair era. Purely by coincidence I watched ‘The Big Short’ last night, which whilst very entertaining was also a very good examination of the forces at work behind the financial crash of 2007/8, forces which continue to drive financial dealings today. Dodds made no mention of these forces. Perhaps she thinks we can accommodate them?

Financial services are barely touched upon in the Brexit deal, and it would in current circumstances be entirely reasonable to conclude that the City will be encouraged to maintain its primacy in global markets by every breath of our government of financial service millionaires. Dodds doesn’t really tackle the question of how Labour will oppose further deregulation in the next three or four years. She doesn’t address the considerable issue of how the City will be further developed as a global tax haven, with the inevitable deleterious consequences for the wider UK economy. For the Tories, this is what ‘sovereignty’ means—the sovereignty of unfettered financial markets. And should it go belly-up again, it will be the taxpayer who picks up the tab, it will be more austerity. Dodds may talk of a long-term economic approach—perhaps reaching out 20 years—but that is diametrically opposed to the City’s philosophy. Her speech owes much to Gordon Brown, whose love affair with the City became evermore apparent when during and after the crash, various gongs had to be returned and speeches embarrassingly recalled. With Starmer’s Labour’s new born lust for economic respectability, even the old tired phrases like ‘we’ll balance the books over the cycle’ are being trotted out again. If the Tories couldn’t ‘balance’ the books why do we even have to promise it? We’re in a world facing far greater issues, the biggest being climate change. At least that subject gets a mention or two in the speech, but I’m not convinced the scale of what is required has been understood. It’s still an Inconvenient Truth.