After a decade of defeats, the Labour Party has found its path to success

Boris Johnson has gone and the ghost of Margaret Thatcher has returned. He is leaving behind a government on the edge of a nervous breakdown. It has learned nothing about the groundbreaking conservative politics that underpinned its 2019 realignment and landslide victory. Nor that its new coalition voted to leave the EU for a sea change in who the economy worked for and how the UK was governed. The problem for the Conservatives, so starkly revealed in the Tory leadership contest, is the absence of policy and a guiding political philosophy. Bereft of new ideas, they are retreating into a restoration politics.

The Conservatives have gifted their political realignment and levelling up to Labour. The party is now starting to seize the opportunity. Lisa Nandy’s speech on levelling up in Darlington on the July 18th, followed by Keir Starmer’s speech on growth in Liverpool on Monday have begun to define a new Labour political economy for the challenges ahead.

As Nandy made clear in her speech, levelling up is not a policy option about regional inequalities to occupy half a page of a manifesto. It needs to be Labour’s national mission, heart and soul, across the UK. It is about an economy that prioritises the makers, carers and creators not the rent-seeking which extracts wealth and puts nothing back. It is, she argued, a great rebalancing of power and wealth between cities and towns, North and South, capital and labour. A rebalancing as concerned with overcrowded cities – with their acute inequalities and chronic housing problems – as with disenfranchised and neglected towns of provincial England. Not one or the other but both, in a great national effort to build a better country.

To match this level of ambition both Starmer and Nandy signalled a new Labour approach to politics in which people’s contribution is the priority. It is not about what Labour will do to or for people, but about using the power of the state to broker and convene relationships and partnerships for social change and business opportunity. It is a politics of reciprocity, about rights and the obligations upon each of us to uphold a national community able to guarantee these rights.

Both spoke about the renewal of a covenant or social contract between government and citizen that can restore trust and rebuild faith in democracy as the basis for economic renewal. For Starmer, the emphasis was on work. If work fails to provide security and dignity, if it fails to pay – and for far too many people this is the case – then the covenant is broken, the reciprocity that binds a people to a nation breaks down and with it democracy. For Nandy, it was on the ability of people to contribute to society and the governing of the country. As she has repeatedly highlighted in a series of speeches it is those with skin in the game who make the best decisions about their lives and provide the most enduring solutions to the problems they face.

Starmer’s own speech indicated that he understands that Labour must become the party of the national economy and go into the next election with a plan for national social renewal and economic reconstruction. In the importance he attached to Rachel Reeves’s everyday economy, and to changing the current model of economic growth, he recognised the new geopolitical era we are entering requires a more corporatist approach and a developmental role for the nation state. Just as global corporations are reassessing the security of their supply chains so must countries in the interests of national security and prosperity.

Reconstructing the national economy and levelling up offers Labour its narrative of national renewal and a framework for developing its policy programme aimed directly at the voters it needs to win back. Nandy has been shaping this story over the last few months in a series of speeches.

Labour’s plan will prioritise the everyday economy, the supply of basic goods and services that sustain daily life: the food we eat, the homes we live in, the energy we use and the care we receive. It will prioritise peoples contribution to the common good and deepen and extend democracy, notably in England, by building capacity not just in regions and localities, but within the failing institutions of the British State. And it will help to regenerate local cultures, associations and community leadership that provide the basis for devolution and the social infrastructure needed for a sense of belonging.

It is about bread and butter politics and as Starmer recognised, it covers all the significant briefs of the shadow cabinet – health, business, education, culture, and nature as well as geopolitics. Shadow ministers now have a vital role developing policy within the narrative framework of national renewal. This is the politics of a generation that must take a long-term view, not least in the energy revolution to offset climate change, and construct the institutions that can be endowed with the task of national social and economic development.

Nandy and Starmer have begun to set out Labour’s narrative around which the next election will be fought. By being the party of the national economy, by valuing people’s work and contribution, Labour can start to bridge the class and geographical inequalities dividing the country and its own electoral coalition. And by doing so Labour can take the lead in defining the new political era. The period of globalisation and liberal markets is giving way to a new more threatening geopolitical age. Great power rivalry, war in Europe and domestic political discontent have prioritised a concern with security – national, economic, military and personal – and the increasing role of the nation state in the internal rebuilding of a covenant between citizens and government.

Now, as James Meadway has outlined, Labour must develop a detailed and effective policy programme around its new narrative of national reconstruction. After a decade of defeats, Labour has found its path to success.