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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is director of policy at IPPR, a think-tank
“The only way to describe it is broken”. The group of voters taking time out of their lives to talk to me as part of a focus group in the marginal Winchester constituency were diverse: male and female, wealthy and struggling, young and old, progressive and conservative. But on the failure of politics, they were completely united.
Back in 1944, just one in three British people saw politicians as “out for themselves”. Today, almost two-thirds say they share this view. The promise of democratic politics — that it delivers better lives and livelihoods — has been broken. Wages have been stagnant. Home ownership has been declining. Public services are at breaking point.
Keir Starmer’s response is to argue that the UK has been ground down by short-termist “sticking plaster politics” that fails to improve people’s lives. His solution if his party wins the election? Create a “mission driven government”.
Labour’s five big missions are unlikely to set hearts aflame, but they are surprisingly bold. Halving violence against women and girls; the fastest growth in the G7; cutting health inequalities between the regions: these are not going to be easy to achieve.
Just stating an intention or announcing a policy does not produce change. Too often, as the team around Starmer’s predecessor Tony Blair used to complain, ministers pull a lever only to find that it does not set the machine in motion; nothing happens. Turning these missions into a reality will be crucial to rebuilding trust in politics but Labour will need to radically reform government to achieve it.
Here too, their plans are becoming a little clearer. More devolution to pass power to places and people across the country. A shift to prevention across public services. A more active industrial policy to create good jobs everywhere. These would all be significant steps in the right direction.
But, as a host of experienced politicians and civil servants made clear to me as part of IPPR’s research into “mission-driven government”, these plans depend more than anything else on transforming one institution: the Treasury. Unless Rachel Reeves becomes a reforming chancellor at its head, very little will change.
There are two big problems with the Treasury. The first is that it is too often penny wise but pound poor. By failing to take into account the wider social — and longer term — benefits of spending, it ends up causing governments to underinvest. And it is historically sceptical of more activist industrial policy of the kind that Labour is proposing as part of “securonomics”.
This has, at times, led leaders to set up a second, competitor department to drive change — think of Harold Wilson’s Department of Economic Affairs and Boris Johnson’s Levelling Up department. In recent years, some senior politicians, such as the former Conservative minister, Francis Maude, have argued for this to be tried again.
But, beware such siren calls. The evidence is clear that structural reorganisations rarely work. The Treasury always ends up stronger, as Wilson, one of Reeves’ favourite politicians, and Michael Gove after his experience in charge of the Levelling Up agenda, would probably testify. Instead, Reeves should seek to turn the power of the Treasury to more progressive ends.
This means rewiring “Treasury brain” and introducing a new golden rule. All spending must pass three — equally weighted — tests. It must be fiscally responsible, deliver on the government’s missions and make sense over the long term. A new, independent “mission body” should be created to pore over the data on delivery — or lack of it — and hold ministers to account.
Last year, Starmer was supposedly unbothered when his shadow chancellor was named the most powerful person on the left. But this accolade may reveal a difficult truth. Unless Reeves is genuinely reformist in government, Starmer may find delivering on his promises impossible.