Mandelson drama turns ‘high stakes’ debate on economy into sideshow | Politics News

An important debate happened in Westminster this week.

Not whether Sir Keir Starmer should stay or go, or who is telling the truth over the Mandelson vetting saga – but about how we grow the economy in a way everybody benefits.

The National Growth Debate – an event organised by the Good Growth Foundation – brought together cabinet ministers, backbench MPs, senior opposition figures, business leaders, unions and think tanks to answer that question.

The discussions were not about abstract GDP numbers – but something more tangible – about how you build an economy that lets everyone have a stake, so that if you work hard, you will be rewarded.

It’s the social contract that people all over the country feel is broken, and why they are increasingly turning against mainstream politicians.

To quote Louise Haigh, the former transport secretary who made the first intervention of the day: “For well over a decade, voters have been sending the same message, ‘the system isn’t working, the economy feels rigged, their lives aren’t getting better’.

“Our tax system is on the side of billionaire owners while people who work for them are abandoned and squeezed.”

Haigh, who resigned from cabinet 18 months ago after a past criminal offence came to light, now leads the Tribune group of soft left MPs. She was speaking alongside Chris Curtis, who chairs the moderate Labour Growth Group.

They came together to outline an economic agenda they believe can unite the party and Labour’s fragmented voter base.

The polices they are calling for include reforms to stamp duty and council tax – described by Haigh as “regressive property taxes” – as well as reforms to business rates, VAT thresholds and the Office for Budget Responsibility (OBR).

The fiscal watchdog’s five-year forecasts are holding the country back, Haigh argued, by prioritising short term costs over long term gains from investment.

For her, the “obsession” with fiscal headroom to meet “shaky” OBR forecasts is one of this government’s “original sins”.

For Curtis, it was the manifesto pledge not to raise VAT, Income Tax or NI: “It didn’t win us a single vote, you shouldn’t make commitments you don’t believe you can stick to.”

That, and the “ming vase” election campaign strategy which meant “we couldn’t talk about a vision, who we were for or against”, the former YouGov pollster said.

Read More from Faye Brown:
Louise Haigh to set out economic policies that can ‘unite Labour’
Government looking at decoupling electricity and gas prices to bring down bills

Haigh and Curtis will both publish more work on these ideas after May’s local elections – which are expected to be disastrous for Starmer and could lead to fresh calls for him to go.

The groups they lead represent 200 Labour MPs – almost half the Parliamentary Labour Party. Are they putting the PM on notice, or is this a signal to whoever might replace him to back this plan if they want their support?

If it’s the latter then Angela Rayner is certainly paying attention. Often tipped to succeed Starmer, the former deputy PM was not originally scheduled to speak at Tuesday’s event but is said to have taken an interest in what her backbench colleagues had to say.

During a short speech at the evening reception she thanked them for their contribution as she urged the government to be bolder: “Let’s take bold action, let’s tell a bold story about how we are building an economy for the one interest we should all serve and that’s the British people” she said.

It was not as critical as her previous intervention, when she warned Labour’s “very survival” is at stake as she shot down the Home Secretary’s immigration reforms. But this time it comes as the decision to appoint Lord Mandelson as US Ambassador rears its head again – casting further doubt on whether the prime minister can survive.

It’s unfortunate for the Good Growth Foundation (GGF) organisers that Tuesday’s long-planned event coincided with Olly Robbins’ Commons testimony – just the kind of Westminster psychodrama this Labour government pledged to stop.

It also risks overshadowing a significant announcement from Energy Secretary Ed Miliband on decoupling gas from electricity prices – which could massively bring down household bills.

Having absolved himself of anything to do with Mandelson in a punchy Sky News interview this morning, the former Labour leader was in good spirits as he told the GGF event that the impact of his policies were being felt “straight away”. Miliband added: “Hope is the commodity that we have to offer as a government – people haven’t felt it since 2008.”

Share

Miliband: ‘I steered well clear of Mandelson in 2010’

It struck a different tone to Darren Jones, chief secretary to the prime minister, who when asked about the earlier interventions of his colleagues said backbenchers, said there were “no easy answers”.

That’s exactly the narrative Tuesday’s event tried to push back on.

Ideas put forward included a bespoke customs union with the EU, championed by Lib Dem deputy leader Daisy Cooper. For the Conservatives, shadow chancellor Mel Stride talked about slashing the benefits bill and getting people into work while Green MP Adrian Ramsey called for a bigger windfall tax on oil and gas profits.

Chancellor Rachel Reeves was among those listening. As Praful Nargund, the GGF’s director said in his opening remarks: “When the stakes are high people show up.”

But whether government is listening is another matter.