Labour’s fudging on HS2 tells us a lot about its election priorities

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Good morning. Will the Conservatives make further cuts to HS2? Almost certainly. Will the Labour party go into the next election pledging to reverse those cuts? Almost certainly not. Some more thoughts on that in today’s note.

Losing track

The big picture reason why the Conservatives might decide to make further reductions in the scope of the High Speed 2 and why Labour won’t commit to undoing them is that nobody votes for economic growth. Britons vote for the things that economic growth makes easier, such as tax cuts, or more police on the streets, or schools that aren’t riddled with aerated concrete, or better healthcare, or decarbonising the economy — but the electoral coalition for “growth” is teeny-tiny.

That’s why Keir Starmer, while telling George Parker of his plans to rework the UK’s Brexit deal, has made it clear that he won’t join the customs union or the single market. It’s why Rishi Sunak may well decide to prioritise being able to promise tax cuts, however temporary they may prove to be, over making sure that the HS2 line extends past Birmingham and doesn’t come to an abrupt halt in outer London.

It’s also why Labour is not going to be drawn on whether the party will undo any further reductions in the rail project’s scope. HS2’s price tag has soared from £37.5bn in 2013 to more than £70bn in 2019 prices, despite the government’s cost-cutting. The Labour party will want any of its additional spending to be focused on the big vote-moving areas: schools, hospitals, and the police.

There are a number of problems here. First, it means that despite Starmer’s insistence on the importance of improving economic growth, his manifesto pledges are largely going to be, by necessity, focused on those vote-moving areas. If he’s lucky — under the premise that the UK’s long years of spending restraint have actually held back the country’s economic growth — then that won’t matter. But it’s also possible that by deciding to eschew spending commitments on HS2 or reducing the cost of childcare and other pro-growth policies — instead focusing on those vote-winning topics — the Labour leadership will make its life much harder in office.

As Martin Wolf explains in his column today, the overall amount of spending in the UK is going to keep rising and so too is the amount of tax. Although both parties will pretend otherwise at the next election, all they are really doing is increasing the size of the promises they will have to repudiate.

What Starmer is trying to do with his five missions and his general talk about the importance of growing the UK economy is win a mandate to fix these problems across both public services and the country’s growth, and then use that to deliver quite a big set of changes to how the UK operates, even though I suspect many of these will be visible in his manifesto only by inference.

You can see how his time as Labour leader offers the template he wants to follow — he ran with lots of specific pledges to keep Labour on the leftwing ground on which it fought the 2017 and 2019 elections. But he also ran on a broad “I’ll fix this and get us winning again” platform, and he has used that mandate to drag Labour some way from where it was in 2017 and 2019, and where he fought the Labour leadership race in 2020. Of course, pulling that off is rather more difficult when you are prime minister and not leader of the opposition. The big challenge Starmer faces between now and then is that his party’s fudging and mudging on issues such as HS2 doesn’t make him look fatally shifty in the eyes of voters.

Now try this

I had a lovely weekend: I cooked this recipe for the first time, it was very good and I heartily recommend giving it a go while figs are still in season. In order to head off accusations that my weekends are predictable, I actually read the paper on Sunday morning not Saturday this week. I learnt a lot from this fascinating piece about the past, present and future of surge pricing, got a Proustian rush from Emma Jacobs’ piece on the secret history of teenage bedrooms, and I very much enjoyed Tim Hayward’s review of Merkato (though the best Ethiopian restaurant in the area is Wolkite, I think, closely followed by Merkato with the Queen of Sheba taking a very strong bronze medal).

Top stories today

• Rates ‘much nearer the top of the cycle’ | Financial markets and economists are expecting the Bank of England to raise interest rates by another quarter point at its meeting on Thursday, taking the cost of borrowing to 5.5 per cent, its highest level since early 2008.

• Braced for strikes | An unprecedented strike by doctors at all levels of the NHS in England this week “will affect almost all planned care”, the health service’s top clinician warned today, as senior hospital managers criticised “a sheer lack of action” to break the deadlock.

• ‘Progressive moment’ | Keir Starmer’s theme in Montreal at the Global Progress Action conference was how to deal with an “axis of insecurity”, covering issues such as the cost of living crisis, the war in Ukraine and climate change. He insisted Labour had the best answers for all three.

• Rent increases at record pace | Residential rents in August jumped 12 per cent on average across the UK, according to data from estate agent Hamptons, the largest annual increase on record.

• Unite launches ‘red wall’ campaign | Labour’s biggest union backer, Unite, said funding earmarked for the party would instead be funnelled into campaigns in industrial constituencies across the UK demanding more radical policies on energy, steel and green jobs, the Guardian’s Heather Stewart reports.