LAbour factionalism: a Dangerous game

Rebellious Labour MP’s certainly take some of the credit for ousting  Sir Keir Starmer. With a favourable new direction for the Labour Party, the ‘soft left’ faction risks cutting short the last chance for the Labour Party, and progressive politics more broadly, to regain the faith of the electorate. They should heed Andy Burnham’s warning of the damage factionalism and political infighting have wrought on Britain’s left and back his choice for chancellor and economic direction. As a self-proclaimed domestic Prime Minister, the importance of the role of Chancellor may perhaps decline, with Burnham fronting Labour’s new economic direction.  

 

Shabana Mahmoud, as reported by The Times, has reportedly been given the nod for Chancellor ahead of Ed Miliband. Momentarily, this is speculation, as Burnham claims that he has yet to choose his top team. Yet reports of a ‘soft left’ revolt, following the supposed snubbing of Ed Miliband, grow louder by the day. This is a prime example of what many claim – not upon unfair grounds – is the problem with Britain’s left and the Labour Party. Mahmoud, who is on the right of Labour, has been blasted by those within her party for her hard line on immigration and brutal changes to the asylum system in her role as Home Secretary. This is certainly well-merited. Her proposed reforms on doubling the time needed for migrants and refugees to achieve indefinite right to remain status have aided Labour in losing votes left to the Greens, who favour a less harsh stance on immigration. Her hardline stance has brought migration numbers down, taking the wind out of Reform's sails, yet equally alienating great swathes of progressive voters and, more importantly, establishing greater uncertainty over residence status for refugees and immigrants. This has rightly made Mahmoud unpopular on the left of Labour.  

 

This, however, does not necessarily mean that Mahmoud will run the economy – if she is appointed as Chancellor – with an economically right-wing philosophy. The simple fact that Mahmoud holds a relatively more socially conservative stance than the rest of her party, evident in her hardline use of the Home Office, does not necessarily translate into a right-wing economic philosophy. ‘Blue-Labour’, Mahmoud’s faction of the party, is sceptical of the merits of taxing income and is increasingly leaning towards the taxation of wealth. Intriguingly, Mahmoud could be the Chancellor to bring in a wealth tax that the left of British politics has been crying out for. Indeed, Mahmoud has said relatively little about her fiscal views, with no prior treasury experience under her belt. This is a point of contention for the ‘soft left’of Labour.  

 

Perhaps consider that the economy is something that Burnham may wish to focus entirely upon. As we observe the construction of a new Labour government before our eyes, one thing slowly becomes clear: there will be no power struggle between Prime Minister and Chancellor akin to that between Tony Blair and Gordon Brown under New Labour. Indeed, Burnham has experienced regional economic executive control, has been Chief Secretary to the Treasury and was Gordon Brown’s Parliamentary Private Secretary from 2003 to 2005. He has significant economic credentials, and the appointment of a supposedly economically unprincipled Mahmoud points to a Premiership characterised by Burnham’s economic convictions, and not those of the Chancellor. Burnham may wish to turn to a wealth tax to fund his expensive and ambitious proposals. FPW will be considering the credentials of a wealth tax in the coming weeks, specifically what Labour could derive from French economist Gabriel Zucman, the loudest voice on the taxation of wealth globally today. 

 

The new chancellor, whoever they may be, of course, must be competent and effective. Despite Mahmoud's unpopularity in her role as Home Secretary, she has cut net migration to the UK to its lowest level since the COVID pandemic, showing she can be an effective minister. Yet, with Burnham pledging to become a domestic Prime Minister focused on solving structural economic problems binding Britain, the role of Chancellor will not be a significant rival centre of power positioned against No. 10 in Westminster. Burnham will drive his economic vision, not his Chancellor. All of Burnham’s flagship proposals – barring devolution, although that islargely driven by economic concerns – are related to the economy. He has pledged to be ‘pro-business’, to row back on 40 years of neo-liberalism, to pursue a romantic idea of reindustrialisation and lastly to widen public ownership of life’s essential services.  

 

The ‘soft left’ of Labour should feel as though they have struck gold. These are all central to that faction’s economic philosophy. Yet this is not enough. Mahmoud, as the ‘soft left’ have so wilfully exclaimed, holds no strong, visible economic or fiscal tendencies and convictions. Therefore, she will likely have no scruples in following through on Burnham’s economic vision that has sprung from the ‘soft left’s’ wildest dreams. An economic blank slate is someone for Burnham to work through, not an opposition figure to struggle against.