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Emily Sheffield: This non-budget Budget is just as risky for Keir Starmer as Liz Truss

Natasha Pszenicki
By @emilysheffield
23 September 2022

oday is a big day for the Truss government. And this weekend is just as important for Labour as it sets out its stall at the party conference in Liverpool. It’s not difficult to summarise how the critique of the new Tory leader will go: same old Tories. One rule for them (bankers’ bonuses and tax cuts for the rich). And one rule for us (low wages, no prospects). This is a criticism that will be spelt out time and again.

Sir Keir Starmer will be betting this message continues to resonate as our national debt continues to grow, inflation stays high, interest rate rises, people feel poorer and Liz Truss’s window of opportunity to prove her low tax, pro-growth credentials to an uneasy electorate gets ever narrower. And we continue to wonder whether all things considered, 12 turbulent years of the Tories has been enough.

With Jeremy Corbyn dispatched, Starmer and his team look safe enough for us to give them a whirl, even if they are not stirring us to perform the tango.

The Labour shadow cabinet will also be buoyed by the fact that there is no sign of a bounce in the polls that a new PM can expect — and promising we will see our doctor within two weeks is hardly a convincing return to normality in the NHS. Never mind that a coruscating report on the Metropolitan Police landed just at the right time, Tories are also failing on crime.

Labour can add to this that Truss is reversing pretty much everything her Tory predecessors fought for — stamp duty rises (another tax deduction for the rich), a sugar tax, the moratorium on fracking. And she’s bringing back foie gras? If Starmer doesn’t make the most of this and get a rousing standing ovation, then he needs a new speech writer. Or Labour needs a new leader.

Elections are not won on explaining complex economic policies, but on simple messages that sell us what we already largely believe in our gut. And all the above will resonate. But how will they counter the tax cuts the Truss government announced today? The Chancellor, Kwasi Kwarteng, has as promised rowed back on the National Insurance rise and cancelled another rise in corporation tax. He also cut the top rate of income tax. And as PM, Truss has messaged that she believes in putting more of our own money in our pockets, with a drive to increase growth to 2.5 per cent, which will, she says, help slowly pay down our deficit and fund social care and the NHS. Making the pie bigger is her big plan.

In reality it is not a simple course to take — tax cuts could fuel inflation, interest on our debt is getting larger, and we are going to keep borrowing. What Labour should not do, however, is feel it can play it safe and just keep lobbing criticism from the side without an imaginative counter-plan — that is a huge gamble too. The return of bankers’ bonuses matched with Truss’s refusal to levy another windfall tax on energy companies will continue to irritate the hell out of everyone. And Labour will be able to point to our pound as it sinks to parity with the dollar, while inflation stays stubbornly high, as more proof that her plan is not working.

But if Starmer doesn’t spell out soon what aspiration looks like under his leadership, Truss will achieve exactly what she wanted: to own the agenda and back him and his party into a corner, looking like the same old Labour, while she looks like the energetic one with fresh ideas, even after 12 years of Conservative rule.

Truss’s big challenge is getting us to understand her radical plan. She hasn’t got long and it’s an economic risk. And a new poll suggests 52 per cent don’t mind paying taxes and having a bigger state, so clearly she has a lot more explaining to do. But we have watched our taxes endlessly rise and paying more doesn’t appear to have delivered real dividends.

Truss is right to focus on growth after two decades of flatlining. The poor are still getting poorer. Housing remains out of reach for many. Only a lucky few get richer, and the middle feel ever more squeezed. The NHS is reeling, social care is a ballooning crisis and universities are no longer “free”.

So Truss may be the one we roll the dice with again. And, if she can come up with more fresh-sounding ideas  then she has a chance.

This weekend, Labour must do more than just carp from the sides, or it risks remaining, like Rishi Sunak, in the political shadow of Liz Truss.

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