CommentWhoever is prime minister needs to be more New Labour. Tony Blair’s explosive essay on government failings set out the need for a new agenda for Britain, while Alan Milburn – one of the most successful ministers of the last Labour government – has today sounded an alarm about growing youth unemployment. After two wasted years in office, this administration would now be wise to listen to its elders, says John Rentoul.
Before the last general election, Keir Starmer seemed to have nearly completed the Blairite restoration. He and Tony Blair shared the stage at a Blair Institute talking-shop, and the Labour manifesto was stripped of the last vestiges of the Jeremy Corbyn period – in particular, the huge spending pledge of the Green Prosperity Plan. The resulting document was a cautious, vanilla programme that tried to copy the New Labour model of 1997, with its modest, believable five-pledge promises, rebranded as “missions”.
After the election, some of the personnel from the New Labour era were drafted in, notably Jonathan Powell, Blair’s chief of staff, as national security adviser; Alan Milburn, Blair’s most successful health secretary, as an adviser on the NHS; and Peter Mandelson, the “third man” of the duumvirate that built New Labour, as ambassador to Washington. It didn’t last. Everyone knows what happened to Lord Mandelson. Milburn is, as far as I can tell, still the lead non-executive director at the Department of Health, but he has recently spent more time on another advisory role, focusing on youth unemployment. Only Powell is still there, quietly getting on with being the “real foreign secretary”.
Other Blair-era figures have also dropped out of the picture. Liz Lloyd, who was Powell’s deputy in the later Blair years, is no longer in No 10. Tim Allan came and went as director of communications. Above all, Starmer’s relationship with Blair himself appears to have cooled. “We’ve spoken over the time he’s been prime minister,” Blair said yesterday. “I don’t know that he really has sought my advice, particularly on policy.”
As Starmer’s government retreated further from New Labour positions, Blair’s frustration at not being consulted finally burst into the open this week. His 5,600-word essay was an admission of impotence, but it was also the clearest expression yet of a plan for getting the government back on track. It was no coincidence that Milburn, who published the first part of his report on youth unemployment today, echoed the policy changes advocated by Blair the previous day, including making it easier for employers to hire young people.
Blair criticised the rise in employers’ National Insurance contributions, which fell more heavily on the low-paid; the minimum wage rising faster than inflation; and the failure to tackle the growing cost of disability benefits. All of these, he argued, are pricing young people out of work. Milburn had to be more cautious, insisting that his first report merely described the problem, while the next one, due in the autumn, would make policy proposals. But he added that Blair’s points were things “the government really needs to think about”.
Milburn, still half inside the government machine, has to work with Pat McFadden, the Blairite cabinet minister, to try to overcome the main obstacle to making the necessary changes: the blocking majority of “soft-left” Labour MPs. McFadden is not just a Blairite – his predecessor, Liz Kendall, was too, but she could not persuade Labour MPs to restrain the growth of disability spending. He is an effective politician who knows he must approach welfare reform more slowly, and from a position that puts the interests of young people and claimants first, rather than appearing interested only in saving money. Hence the two-step approach: first, Milburn tries to get everyone to agree that youth unemployment is an intolerable waste; only then can ministers move on to solutions.
But goodness, it is slow. What Milburn is offering for the autumn is where Labour should have been before the election. Starmer has wasted two years by failing to prepare and, as a result, being pushed around by the soft left, whose response to every policy problem is to spend more and tax more.
Meanwhile, the NHS is drifting. Some of its performance indicators are moving in the right direction, and abolishing NHS England was a big, bold and correct step, but Wes Streeting and Milburn never quite gelled into the kind of delivery-unit mentality that drove NHS improvement in the Blair years. And now Streeting is off trying to compete with Andy Burnham in appeasing the soft-left instincts of party members in a leadership contest that has yet to begin. It is even worse than Blair suggested in his ironically titled “Playing with Fire” essay: “Whether there is a leadership change or not is irrelevant if it doesn’t start with a policy debate.”
It now looks increasingly likely that there will be a leadership change, and that it will begin with a policy debate partly prompted by Blair himself – but one that could push the Labour Party in the wrong direction. Whoever is prime minister next will need to be more New Labour in outlook, both for the good of the country and for Labour’s hopes of surviving the next election. But at this rate, the party will drift even further away from the most successful period in its history.
