Unlock Editor’s Digest for free
FT editor Roula Khalaf picks her favorite stories in this week’s newsletter.
Twice in the past half-century, after the switch to Margaret Thatcher’s Conservatives in 1979 and Tony Blair’s New Lair in 1997, elections have brought about a fundamental change in British politics. Today, the country is on the threshold of another significant shift. Voters appear to have decided that after an often turbulent 14 years in office that included five prime ministers, the Conservative Party’s time is up. Surely there can be no other conclusion.
No party in power can escape reckoning for so long, and no government has left national affairs in such dire straits since at least 1979. Economic growth and real wages since 2010 have lagged significantly behind the historical trend since the war. The tax burden is near a post-1945 record, the government debt is the highest relative to output in 60 years. However, public services are falling apart. British defenses are exhausted.
Conservatives can point to external shocks: the aftermath of the financial crisis and the Great Recession; the global pandemic and Vladimir Putin’s invasion of Ukraine. However, he did a lot of damage to himself. Widespread austerity measures have weakened public space. Liz Truss as Prime Minister in 2022 carelessly caused a market crisis. Brexit, the defining project of this Tory era, has turned out to be an act of serious economic self-harm.
During the frenzied process of leaving the EU, Boris Johnson’s government quickly and nonviolently tampered with the rule of law, undermining public respect for politics and institutions. Britain’s position was weakened in the eyes of its allies. Rishi Sunak took steps to right the ship of state; Jeremy Hunt was a serious chancellor. But even now the Prime Minister does not look like a champion of a party mired in bickering and filth. Since 2010, the Conservative Party has all too often prioritized managing its volatile party politics over proper government in Britain.
You see a screenshot of the interactive graphic. This is most likely because you are offline or JavaScript is disabled in your browser.
The Financial Times has no fixed party political affiliation. We believe in liberal democracy, free trade and private enterprise and an open, outward looking Britain. This often aligns us more with the British Conservatives. But this generation of Tories has squandered its reputation as the party of business and its claim to be the natural party of government. The party needs magic in the opposition to resolve its internal differences. However, we would not want the Conservatives to be so destroyed that they are unable to fulfill the role of viable opposition which is essential to British politics.
Sir Keir Starmer’s Labor Party is better placed today to provide the leadership the country needs. Five years ago, under the hard-left Jeremy Corbyn, the idea would have seemed fanciful. Starmer transformed what had been a shambolic group yearning for failed 1970s interventionism back into a credible governing party. Both the Conservatives and Labour, infected by various strains of populism, left the center in 2019. It is Labor that has returned to it.
The FT remains concerned about Labour’s interventionist instincts and enthusiasm for regulation. His historical sympathies for unions must be balanced with the interests of business and the wider public. His understandable eagerness to distance himself from Corbynism and his tax and spending record has made him overly cautious. As with the Tories, her unrealistic fiscal assumptions will see her struggle to fund and invest in the broken NHS and other public services. On many domestic questions, Labour’s answers are lagging behind. Her manifesto fumbles around the edges too often.
While the challenges specific to Britain are exceptionally difficult, the new government also takes over at a time of great upheaval, with the post-war international order in distress. It faces the same missions as other leading economies: combating climate change and mastering artificial intelligence, and dealing with a rising China, a revisionist Russia and possibly a second Trump presidency in the US.
Still, Labor has positive ideas and Starmer and his shadow chancellor have worked hard to engage with business and the City of London and regain their trust. A less ideological approach to government is welcome. The party has rightly placed the revitalization of growth at the center of its agenda. The stability, predictability and competence it promises have been sorely lacking in the UK government for years. They are essential ingredients for attracting investment.
Commitments to reform the planning system and devolve more powers to the regions are targeting significant constraints on growth and the ability to build the homes and infrastructure the economy needs. The commitment to fight climate change and invest in green energy opportunities contrasts sharply with conservative efforts to turn the green transition into a wedge issue.
The biggest danger is that Labour’s growth strategy will prove insufficient – and it is regrettable that its reluctance to talk about restoring trade relations with the EU closes another path to economic recovery. It may soon have to choose between sharp cuts in public spending, changing its fiscal rules or pulling back on the tax lever; The Institute for Fiscal Studies warns that commitments to increase real spending on health, schools and defense would mean cuts in other public services totaling £9 billion a year by 2028. Despite declaring itself to be the party of wealth creation, the Labor government could end. focused on wealth creators.
However, few political options are always ideal. Britain must choose between a polarizing Tory party that has limited its appeal to an increasingly narrow segment of the population, and a Labor party that appears to want to rule the country. The risks of staying with exhausted incumbents outweigh the risks of introducing a new government. Much of the country longs for a new beginning. Workers should be given the opportunity to provide this.