Yahoo Finance Let’s be honest, Britain needs change more than stability
At the heart of Labour’s challenge is the tension between its cry for ‘stability’ and its mandate for ‘change’ – there’s a real risk we could end up with neither, says Matthew Lesh
Rachel Reeves’ first speech as Chancellor received a warm reception, including from some unexpected quarters. An incoming Labour government may not have expected such strong praise from free market think tankers. Yet we were overwhelmingly positive about the prospect of planning reform.
The reforms could unlock infrastructure development, streamline major projects, and ignite a housebuilding surge. This would significantly bolster Britain’s stagnant economy and prevent further tax hikes.
However, another curious element in Reeves’ speech is also worth considering. The first major theme in the speech was not ‘reform’ – that came last. The new Chancellor was first keen to emphasise ‘stability’.
This is Labour’s argument, oft-heard during the campaign, that many of Britain’s problems can be solved simply by changing the people at the top. At best, the line goes, the Tories were incompetent. At worst, they are corrupt and malicious. This instability scared away investors. Now, with new ministers in charge, this can all change.
There’s undoubtedly some truth here. The Conservatives were in no small part turfed out because of internal gameplaying and incompetence. This did damage to Britain’s reputation. Reeves has also taken an important stance against those on the backbench and left-wing outriders who want to see more borrowing and spending. Fiscal responsibility is important.
But is stability enough?
Not too long ago, Rishi Sunak and Jeremy Hunt entered Downing Street promising precisely the same. They did have some success in helping to calm down the bond markets. But it did not get them very far in the end.
Trying to manage the state machinery better than their predecessors was not politically inspiring, nor did it solve Britain’s manifold challenges. You could say they didn’t have enough time, but they didn’t really try. There were no major proposals to reform the tax system, fix the broken NHS model, or deal with the red tape strangling Britain’s businesses.
Even with all the goodwill in the world, the size and scope of the modern state is vast. The issues we face today are more complex and often quite technical. As a result, governing is difficult. If you’re unwilling to take big enough risks to solve problems, you may be able to keep the ship afloat but are unlikely to steer it in a new direction.
The major exception, at least so far, is the new government’s position on planning reform. Reeves made it clear that they would not shy away from difficult decisions. But even in this case, their current proposals much be a first step, not an endpoint.
Much more reform is necessary to boost housebuilding. Reintroducing compulsory targets, for example, will increase construction. However, these targets existed just a few years ago and did not fix the system alone.
Their planning reforms are also very top-heavy, using Westminster’s power to force councils to approve more development. This may be achievable shortly after a big election victory provides political power. However, as pushback inevitably emerges, the lack of positive incentives for local development could prove to be a big problem.
It’s a similar story for the NHS. This could be a ‘Nixon goes to China’ moment. A Labour government has the political legitimacy to make major reforms to the NHS. This is unlike the Tories, who simply hugged the system, gave it more money and yet got worse outcomes. However simply admitting that the NHS is broken, like incoming Health Secretary Wes Streeting, does not fix its problems.
At the heart of Labour’s challenge is the tension between its cry for ‘stability’ and its mandate for ‘change’. If the government is unwilling to take big enough risks and embrace major opportunities, then, in the end, we could get neither.
Matthew Lesh is the director of public policy and Communications at the Institute of Economic Affairs
