The skill of a political strategist is to frame a complex debate as a binary choice in a way that favours their preferred outcome. Labour did this effectively in only three words in 2005 (‘forward, not back’) and just one in 2024: change. Tony Blair was a master of using this technique to tame his own party, telling a restless 1999 trade union audience: the choice isn’t between this Labour government and a fantasy one that fixes everything overnight; it’s between Labour, rebuilding after years of Tory rule, or an even more right wing party undoing all progress. Keir Starmer’s team might use similar framing at Labour’s conference.
But others are framing the conference as a clash: Starmer versus Andy Burnham; Bridget Phillipson versus Lucy Powell; centre versus left; growth versus values. One side insists growth is critical – without it, poverty rises, public services collapse, and Labour loses in 2029. This means resisting calls to lift the two-child cap or boost welfare spending. The other side argues that while growth matters, Labour must prioritise its values, diluting the growth focus to deliver what members demand – otherwise, what’s the point of governing? This divide surfaced in the welfare vote and now fuels the Deputy Leader race and Burnham’s leadership pitch.
While the Labour government is firmly in the growth camp, Labour members are broadly in the values camp, and therefore those who want to appeal to Labour members, as Powell and Burnham are currently doing, end up downplaying the importance of growth.
But the real issue is debt. It’s higher and more volatile than when Labour last governed: 75% of GDP in 2010, 80% in 2015, nearly 100% now. Once held by stable British pension funds, today more of it is in the hands of speculative global investors. These investors hold the economy’s fate. They are not casting a political vote: their confidence is focused only on debt reduction and growth. Any strategy ignoring this reality is dishonest. Wishful thinking – higher spending or lower taxes without a care for debt – will be punished by markets, just as it was with Liz Truss.
In the face of this reality, the economic vision of Burnham and Powell feels a little thin. Talk of a “wealth tax” must specify who’s taxed, how, and where it’s worked elsewhere. Their support for the SMF’s gambling tax, targeted at online casinos, could make a serious dent in child poverty but it won’t free Labour from bond market pressures. And while some adjustments could be made to the way the Office for Budget Responsibility provides forecasts, no Labour MP should take seriously the idea that the debt problem will go away if the OBR simply marked the Chancellor’s homework less strictly.
Yet, as the PM and Chancellor urge realism on debt, they must avoid implying austerity is inevitable or that Labour’s ambitions must be shelved. Andy Burnham was wrong to say “we’ve got to get beyond this thing of being in hock to the bond markets” not just because it made him seem unconvincing on the reality of the bond markets but because it also implied that Labour cannot be radical within its current economic constraints. As long as Labour can show it is serious about growth and debt, the bond markets will be largely indifferent.
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The Labour government must project stability on the economy but they do not need to present the next stage of the project merely as ‘renewal’, as if the country just continued its direct debit for another year of more-of-the-same government. Instead Labour should frame itself as the party of bold reform, not incrementalism; against tinkering with a system that has failed to lift living standards, in favour of bold progressive policy change; against technocratic incrementalism, in favour of radicalism.
The lesson Labour should take from its botched welfare reforms is that the resistance to a minor change to the status quo can be fiercer than the resistance to a wholesale change. Labour should be looking at challenges such as our failing social care and council tax system (81% of councils expect to overspend on social care budgets this year) and opting for transformational, rather than incremental change. For example, the SMF believes that introducing a social insurance model for social care would enable government to scrap council tax everywhere, while replacing it with a proportional property tax at a lower cost for everyone. This would be a much bolder step than tinkering with council tax bands, and could be both more progressive, suiting Labour’s values, more sustainable, reassuring the markets, and more popular.
Conference does not need to be framed as a battle between growth and values; nor does the hard reality of the bond markets mean that Labour is incapable of taking radical steps. The only framing that works for party and country is the one that won Labour its landslide: real change, not incrementalism.
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