Starmer faces revolt over railway U-turn
Sir Keir Starmer has been hit by a shadow cabinet revolt after backtracking on his party’s pledge to renationalise the railways. The Labour leader has reversed his promise to bring train services back under public ownership, angering Left-wing MPS and unions. Louise Haigh, the shadow transport secretary, said that despite the announcement, Labour was “committed to public ownership of rail”. Her comments were retweeted by Angela Rayner, the deputy leader.
SIR KEIR STARMER has been hit by a shadow cabinet revolt after backtracking on his party’s pledge to renationalise Britain’s railways.
The Labour leader made an aboutturn on his promise to bring train services back under public ownership, angering Left-wing MPS and unions.
He insisted it was necessary to “take a pragmatic rather than ideological approach” to spending given the state of the economy.
His remarks prompted fierce opposition from MPS on the Left of the party, including two members of his own frontbench.
Louise Haigh, the shadow transport secretary, insisted that despite the announcement Labour was “committed to public ownership of rail”.
Her comments were retweeted by Angela Rayner, the Labour deputy leader, signalling her support.
Sam Tarry, a shadow transport minister, said the party’s position was “bringing
‘To be spending billions on nationalising things, that just doesn’t stack up against our fiscal rules’
‘When it comes to rail or anything else, I want to be pragmatic about this rather than ideological’
our rail networks back into the hands of the British public”.
The row overshadowed a keynote speech Sir Keir gave in Liverpool, where he laid out how he would run the economy as prime minister.
It began when Rachel Reeves, the shadow chancellor, confirmed that Labour had abandoned its commitment to renationalisation.
She said the Jeremy Corbyn era pledge to bring rail, water, energy and Royal Mail back into public ownership was now unaffordable.
Ms Reeves has pledged to fund all day-to-day spending with tax revenues and to bring down Britain’s growing debt mountain. “To be spending billions of pounds on nationalising things, that just doesn’t stack up against our fiscal rules,” she told the BBC.
The shadow chancellor added the renationalisation pledge was made “in a manifesto that secured our worst result since 1935”.
A party spokesman added to the confusion by contradicting Ms Reeves, insisting there was a “positive role for rail in public ownership”.
Asked what he thought, Sir Keir said he agreed with his shadow chancellor. “Whether it comes to rail or anything else, I want to be pragmatic about this rather than ideological,” he said.
“Having come through the pandemic it’s very important we have very, very clear priorities. That’s why we have set out fiscal rules.”
In a later interview with the Daily Mirror, that already much in the public Labour of the ownership”. leader train service pointed He said: out “is “Pragmatically, it’s time going to come.” to be that the is situation the situation, for some and part-nationalise Ministers have the put railways in motion by plans ditching to the franchise model in favour of a concession system. Previously train companies bid for contracts to run services, agreeing to fulfil certain targets in return for being able to make large profits. In future the Government may pay them a fixed fee, with a new state body called Great British Railways setting most fares and timetables. The Telegraph understands Sir Keir has decided to adopt a clean-slate
approach to all previous spending commitments in light of the pandemic. While the Labour leader still agrees with the idea of publicly owned rail, he does not believe it should be a priority at a time of tight public finances.
His stance was attacked by Mr Corbyn. “The way forward has to be a radical economic alternative, including public ownership of rail, energy, water and the Royal Mail,” the former Labour leader said.
The TUC put out a call for the renationalisation of the energy sector, along with a video praising France’s publicly owned utilities.
It was supported by a slew of Leftwing MPS including Richard Burgon, former shadow cabinet minister, and Clive Lewis.
Just as the Conservative leadership contest has triggered a debate about the future direction of the Government, so Labour is taking the opportunity to rethink its own policies. Sir Keir Starmer, the party’s leader, set out a new economic approach yesterday which sought to break with the recent Left-wing strategy of Jeremy Corbyn that cost Labour dear at the 2019 general election.
Much of that year’s manifesto has been abandoned, including pledges to renationalise water and electricity, though socialist red meat like imposing VAT on private school fees remains for now. The quasi-marxist, high-taxing, centralised state that was envisaged then has been replaced by a more prudent and cautious strategy. Sir Keir said there would be no more magic money trees, no unfunded spending commitments and a relentless focus on investment and growth.
Those of a sceptical nature may scoff given Labour’s past profligacy but this does seem to be a serious attempt to reposition the party in the centre ground on which Tony Blair won three elections. The new economic blueprint follows Sir Keir’s recent pronouncement that Labour would not seek to go back into the EU or the single market in any form. As they wage war on their own record and each other, the Tories need to beware.
In truth, however, there was nothing especially radical in Sir Keir’s speech. His big announcement was to establish an industrial strategy council on a statutory footing as though another talking shop directing business will be any more successful than predecessors like the National Economic Development Council in the 1960s.
His assessment that the biggest problems are an absence of growth and low productivity is one being voiced by Liz Truss. Her solution is to cut taxes, borrow to fund spending but also establish proper enterprise zones in freeport areas to encourage “levelling up”. Sir Keir wants to “reboot” the economy without setting out the specific mechanisms to do so.
What both parties shy away from is acknowledging why there is no growth – because the state takes away too much of the productive capital of the country. Ms Truss has come closest to doing so but she wants social spending to remain roughly where it is now and to load the burden of paying for it on to future generations. Labour and Tories must now choose: they cannot have a big, all-encompassing state and decent economic growth.