Getting ‘everyone in the room’ won’t cut it, Labour must be ready to cause upset
To govern as an ‘adult’, Labour must confront the hard decisions now and be ready to cause some controversy, writes former deputy director of the Prime Minister’s Policy Unit James Nation
The chief secretary to the Treasury has apparently quipped that “the adults are back in the room”. It is a cute line and, take it from someone who was there in October 2022, easy for any new administration to think.
Labour has the benefit of effective power. With a strong majority, a united party and a civil service keen to impress, the ‘adult’ thing to do is to confront the hard decisions now. So far, the government’s approach has two features. The first is to believe (and brief) that simply getting everyone in the room is enough to cut through any difficult problems. The second is to seek to portray their inheritance in the worst possible light, rolling the pitch for measures they always wanted to pursue, but are a harder sell with the public.
Take planning reform. Industry wonks will be waiting to pore over the detail in the revised National Planning Policy Framework. The government has also committed to primary legislation on planning. They will only have the political capital to do this once, and are best to do it quickly and in a targeted way.
Gaps remain. For example, in London, the Deputy Prime Minister will need to decide whether to intervene on the London Plan and get rid of the Mayor’s requirements that are hindering the delivery of new family homes. Likewise, on environmental regulation, I welcome Steve Reed and Angela Rayner’s Damascene conversion to doing something about the ‘nutrient neutrality’ rules holding back new prisons and over 100,000 homes that already have local consent.
People in roundtables and replying to their consultation will say that the solution rests with vast, costly mitigation schemes. These will take years to deliver and burden small house builders. It is difficult to see how the government avoids legislation to solve this problem comprehensively. That will inevitably cause them some pain with Natural England, Guardian environmental columnists and NGOs, but they must push through.
On the fiscal side, the Chancellor wants us to believe that the situation is so much worse than anticipated. But, unlike in 2010, everyone has had access to full information and forecasts from the Office of Budget Responsibility. Her efforts will be exploited by many as an opportunity to fire bids for more money over to the Treasury. Of course, there will be some legitimate cases to address. There are always in-year spending pressures worth billions and the aim is to manage these down without increasing overall spending beyond what you have already planned for.
The way the Treasury conducts themselves in this negotiation will be crucial for setting the tone for the rest of the parliament. Give in on the two-child benefits policy, for example, then expect all sorts of other alliances to form between departments and Labour backbenchers that will get tougher to withstand. On public sector pay, the government may decide to top up education and health budgets to meet the recommendations of the independent pay review bodies. But, cave to the expensive demands of the junior doctors or of the train drivers (the latter constantly asking for more subsidy without any commitment to reform outdated workplace practices), and you lose your ability to anchor expectations on cash for the future.
Governing as an ‘adult’ means recognising you are in a massive jungle of trade-offs, with hard, binary decisions where the consulting has to stop and some controversy is inevitable. It means making arguments to the public about policies on their merits and facing down unreasonable demands, rather than always finding someone else to blame. Labour has the power to do this. Let’s see if the chief secretary’s line holds up.
James Nation is the former deputy director of the Prime Minister’s Policy Unit and ex-special adviser to the Chancellor