By Matt Dickinson
It’s strange to be in the midst of a debate about Labour’s clarity of vision at a moment when YouGov puts the party 15 points ahead in the polls.
Even sympathetic writers have challenged what they see as Keir Starmer’s “neutral, depoliticised approach”, whilst others argue that the leader “should be confident that his lack of vision is a strength,” suggesting that his adversaries are “only using this attack line out of frustration they can’t pin anything meaningful on him.”
Regardless of where you stand in that discussion, YouGov’s latest numbers undoubtedly show a narrowing of sentiment across other measures.
Less than a third (30%) of people now believe Starmer would make the best prime minister, down 14 points from September. That’s only five points ahead of Rishi Sunak, and two ahead of Boris Johnson at the moment he was leaving office.
With a new Conservative leadership pledging stability, delivery of levelling up pledges and City reform, the incumbents may well narrow the electoral gap in the round over 2023 (especially if the OBR’s forecast of a significant drop in inflation comes to fruition).
As such, the need for a clear overarching vision will become more pressing in the coming months.
When searching for inspiration, the party could do worse than looking across the pond.
President Joe Biden’s Build Back Better campaign refrain has now translated into two seismic pieces of legislation: the Infrastructure Investment & Jobs Act and the Inflation Reduction Act.
The former promises $550bn of additional spending on critical/ vulnerable infra projects over the next five years (the money has already started to flow), the latter $369bn in tax credits and wider incentives to spur investment in renewables, clean tech and alternative fuels.
By spreading direct spend, and focussing on harder to reach communities whilst ramping up incentives, Biden has successfully caught the attention of sovereign wealth, insurance, and pension funds that invest in infrastructure assets.
These funds, representing the financial interests of millions of workers from across the public and private sectors, have an estimated $300bn ready to deploy in the right sustainable projects – capital that can spur job creation, renewable capacity, innovation and ensure financial security for savers in later life.
With Biden’s legislation now in effect, these international investors are more bullish about infrastructure investment in the US (especially with regards to clean energy, sustainable tech and digital connectivity) than in any other nation.
The UK, meanwhile, has gone from being the most to least appealing investment destination across western Europe between Q2 and Q4 of this year.
If follows that the OECD expects the US economy to grow by 0.5% next year (despite a distinctly gloomy worldwide outlook).
It expects UK GDP, by contrast, to retract by -0.4%. The body has long flagged lack of infra investment, housing supply and childcare support as weak spots for the UK (all areas addressed by Build Back Better).
Biden’s success in securing bipartisan support for his infrastructure programme deserves recognition when discussing these outlooks.
Major energy, transport and digital projects usually work to 10, 20 and 30-year delivery timetables (not four or five-year terms), so this kind of cross-party backing sends a message to the world that this is a nation serious about long-term inward investment.
What, then, does a Labour take on Build Back Better look like?
The party could start by homing in on existing policies that are deterring green investment, not least a 45% tax on renewable electricity generators in the context of a climate emergency.
After years of economic uncertainty, the chopping and changing of policy around areas like onshore wind is also deeply unhelpful.
Clarity and stability of legislative and regulatory frameworks are paramount. Labour needs to precisely map the implications of its plans for a Great British Energy company, sovereign wealth fund and nationalisation programme.
Reaching for tax incentives and funding to spur growth naturally raises the question of economic credibility. It’s notable in this regard that whilst the UK’s debt to GDP ratio stands at around 100%, the US’s stands at more like 140%.
With its plans for green job creation, Labour is poised to build a vision around infrastructure investment.
Doing so is not just a matter of political expediency, but of defining what – after years of public service in the legal, financial, political (and, who could forget, broadcasting) fields – the likes of Keir Starmer, Rachel Reeves and Ed Miliband see as their lasting legacies.
The Labour Party has borrowed from the Democrat playbook to win elections and create change in the past. This could be the moment to do so again.
Matt Dickinson is a member of Labour in the City, Labour Business and the Fabian Society