Labour will face its credibility test when the coronavirus crisis is over | Rafael Behr | Opinion

It was an ordinary October morning in 2001 and Gordon Brown was shouting at Ed Balls. The chancellor was furious with his adviser for telling journalists that the government would take “whatever action is necessary” to fund the health service. “The papers are all saying we’re going to raise taxes for the NHS!” Brown raged. “But we are going to raise taxes for the NHS,” was his lieutenant’s defence.

That story from Balls’s 2016 memoir came to mind when I heard Matt Hancock say that “money is no object” in the fight against coronavirus. The health secretary was speaking in the emergency present tense. He meant money is no object now. But it has been before and will be again. Likewise, when chancellor Rishi Sunak said he would do “whatever it takes” to mitigate the economic impact of the pandemic, he meant that no one should pay the price yet. But there will be a bill.

“If we get out of this with a fiscal deficit of much less than £200bn next year, we’ll be lucky,” Paul Johnson, director of the Institute for Fiscal Studies, wrote last week.

For perspective, the deficit in 2010 was £163bn. George Osborne argued then that Labour spending to counter the financial crash had set Britain on the road to ruin, and the path to salvation had to be cut through Whitehall budgets. A decade later, the Treasury books are still unbalanced, public patience with austerity is spent, and a Tory chancellor is pouring money down an economic well of unknown depth.

This is a different political planet from the one on which Brown spent months plotting an extra penny on national insurance for new health spending. Labour had just won a second term, the Tories languished on the cultural margins, the NHS was a slam-dunk popular cause, and still the chancellor built his case with painstaking care. That April 2002 budget was not the last time a British government raised taxes, but it was the last time a tax rise was designed to be noticed – and to be popular. It was the last serious attempt to make a virtue of higher contributions: everyone chipping in, because the benefit is shared by all.

Since then the gap has grown ever wider between the public’s expectation of services and its awareness of what is required to fund them at that level. Even before coronavirus, the Tories were heading for a reckoning on that front. Their 2019 manifesto promised more nurses and police officers with lower taxes and limited borrowing. The pandemic then forced a vast expansion of the state, with no prospect of greater Treasury revenues.

Sunak’s emergency measures are not a stimulus package that pays for itself by boosting output down the line. He is emptying the coffers just to avert obliteration of the economy. A short, sharp recession with many zombie businesses staggering on in state dependency is one of the better-case scenarios.

The abandonment of traditional Conservative economic policy invites Labour back into a national conversation earlier than seemed likely after its electoral banishment last year. That reprieve from irrelevance is not the same as intellectual validation for Jeremy Corbyn. The former Labour leader believes he has been proven “absolutely right” by Sunak’s vast antiviral bailout, although that is not necessarily the compliment he thought he was paying himself. The election was fought without Covid-19 on the radar, so for Corbyn to now claim vindication in a disaster relief programme suggests that his idea of routine fiscal policy looks like everyone else’s idea of an emergency.

Corbyn also said last December that Labour had “won the arguments” on austerity and climate, among other things. This could only be true to a man who sees politics as a contest adjudicated by his party, and not the electorate.

New Labour leader Keir Starmer appears to see things differently, which marks a huge advance for the opposition before a single policy has changed.

It is true that Labour’s embrace of a radical leftwing programme, combined with the humbling of Theresa May in the 2017 election, rewrote the terms of debate. Corbynism restored discussion of nationalisation to the political mainstream. On that measure, credit is also due to Ed Miliband, now back on the frontbench as Starmer’s business spokesman. As Labour leader, Miliband started interesting conversations about “predator capitalism”. He pioneered arguments for utility price caps and mansion taxes.

And, like Corbyn, he influenced Tory policy along the road to failure. But Miliband likewise couldn’t persuade voters to trust him to implement those, or any other policies.

That distinction is the one insight to salvage from New Labour even if the rest of the vessel is left to rust on the seabed of history. Tony Blair and Brown recognised that it is easier to coax people into upping their contribution when it doesn’t sound like punishment for having the means to do so. The Tories also have a psychological headstart because voters will believe Conservatives raise taxes reluctantly while suspecting Labour of doing it with relish.

The challenge for the democratic left has always been persuading people on middle incomes that the benefits of an expanded state – better services and a less divided society – are worth paying for. Corbyn’s Labour had a different pitch: free stuff for you, with the bill sent to someone richer than you (and probably in another town). Corbynites called it solidarity, but to many voters it smelled of a scam.

Coronavirus has zeroed the economic scales. Money is no object, but only in the present emergency. This is the hot solidarity of battle. The real test comes in the next phase, when the cold language of priorities and limited resources returns. Then we will know the depth of Tory conversion to state finance for collective wellbeing. And if it is shallow, we will discover whether Starmer can fill the gap; whether he can persuade people to trust Labour with their money when money will feel scarce; whether he can make redistribution sound like an opportunity and not a threat.

We will learn whether he knows the difference between winning an argument in the Labour party and making an argument that can win over the country.

Rafael Behr is a Guardian columnist

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