What does a Labour government do when there’s no money to spend? Constitutional and regulatory reform. It’s not perfect but the only answer that’s available

by Atul Hatwal

What does a Labour government do when there’s no money to spend? That was the exam question for the draft policy document from the National Policy Forum (NPF), circulated last week. On first appraisal, it’s answer isn’t terribly clear, the NPF document is a hotch potch. The many hands of a committee are evident and reflected in the disparate media reports with a spray of different toplines, from spending discipline to changes on worker’s rights to removal of the commitment to allow EU nationals to vote at general elections.

But step back, look at it overall and a nascent direction of travel is present. One that’s familiar for those with memories stretching back to the 1990s.

Beyond the big economic pronouncements which are primarily about what Labour will not do – no rise in income tax, capital gains tax or new wealth or mansion taxes – the highest profile policies fall into two categories: discrete pledge card initiatives with specific benefits and funding identified and constitutional and regulatory reform.

The pledge card initiatives have been well-trailed, with funding raised from policies such as closing the loopholes in the windfall tax and ending non-dom tax status to pay for improvements like more NHS staff and breakfast clubs for schools. But it’s the second category, about which less has been written, that is more interesting.

When looking back at the 1997-2001 Labour government, what’s remembered is constitutional and regulatory reform. Yes, there were pledge card initiatives, like the New Deal for the young unemployed to move 250,000 under-25s off benefits and into work by using money from a windfall levy on the privatised utilities (I can still recite that in my sleep), but few talk about them today.

In the lists of achievements of the last Labour government, the highlights from the 1997-2001 administration usually include the minimum wage, devolution and independence for the Bank of England. None of these constitutional and regulatory changes needed substantive new funding from the Treasury but each has had a significant impact on life in Britain.

The National Policy Forum document includes some of these types of policies such as Lords reform, votes at 16 and a new body to enforce workplace rights. But what is lacking is an overarching narrative that explains why this kind of reform is important to renew Britain, how it means Labour can govern differently to the Tories without lavish funding, a clear focus to give the media topline that is currently missing.

We’re probably over a year from an election and as minds turn to deliverability and what a potential first 100 days of a Labour government would look like, the same economic and political pressures that propelled constitutional and regulatory reform to such prominence in the 1997-2001 Labour government are likely be felt within Keir Starmer’s policy process.

It meets material policy needs, feeds the media beast hungry for news stories, keeps a party membership that is yearning for radicalism, onside, is more immediately deliverable than huge investment programmes and above all else, does not require Rachel Reeves to hand over the Treasury bank account PIN.

The NPF document today is clearly not a general election manifesto. Gaps are evident. These pressures that shaped a previous Labour platform are likely to determine how they are addressed.

For example, Labour shadow ministers across departments are scathing about the performance of the current crop of regulators. It goes beyond just personnel, though that is a frequent refrain, to the mandate and structure of the regulators. It seems hard to believe that there will not be action in this area, with an emphasis on consumer rights and representation, policies that do not require government expenditure but do directly impact large swathes of voters.

A Labour manifesto that promised economic devolution with greater local control over how government funds are spent, democratic renewal with Lords reform and votes at 16 as well as a new regulatory regime that championed consumer interests, including new regulators to enforce workplace rights and labour laws like the minimum wage, well that starts to sound quietly radical, certainly very different to more of the same from the Tories.

It’s not a replacement for pouring gargantuan quantities of funding into public services to rebuild them after 13 years of austerity, but when there’s no big money to spend, constitutional and regulatory reform is, to apply the eternal Labour conference fringe event title, what’s left.

Atul Hatwal is editor of Labour Uncut

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