The Mandelson files have produced a truly damning revelation about Keir Starmer’s government. But it is one which will be of little interest to many people because it doesn’t reflect badly on Lord Mandelson. On the contrary, it shows why we would be a lot better off if the Labour party had more people who occupy the same centre political ground that he does.
The revelation comes in the form of a WhatsApp exchange between Mandelson and Pat McFadden in which the latter opines:
Every meeting I have is ‘Who can we tax in order to pay benefits to others?’. They’re asking the wrong questions.
McFadden is the Work and Pensions Secretary. That he thinks Labour is being far too generous on benefits and too gungho on taxes is truly seismic. It suggests that McFadden sees himself as a prisoner who is unable to carry out the welfare reforms that he believes are necessary.
His predecessor, Liz Kendall, similarly found herself powerless; her very modest proposals to rein in the explosion in Personal Independence Payments (PIPs) were rapidly squashed when dozens of Labour backbenchers threatened to rebel. She was swiftly removed from her post. McFadden, it is now revealed, is in the same position and will likely follow her out of the door.
Such MPs are totally oblivious to fiscal reality
The tragedy for Britain is that we have a governing party with a large proportion of MPs who will never, ever, under any circumstances, support any kind of welfare cut. They think that they are being kind and virtuous in blocking welfare cuts. In their minds, no benefit claimant has ever cheated the system. No one signed off on the sick for depression or anxiety could ever be put under any kind of pressure to earn a living; all are desperate and deserving of society’s compassion.
Such MPs are totally oblivious to fiscal reality. Like the Greater Manchester Mayor Andy Burnham, who last year suggested that we shouldn’t be in hock to bond markets, finance is just some esoteric obsession of people who lack human understanding.
Neither do these MPs care a jot about the manifesto on which they were elected two years ago, which promised fiscal responsibility. In their eyes, the bond markets which finished off Liz Truss’s brief premiership were upset by the idea of tax cuts for the rich, not the inexorable rise in public spending – which included the open-ended spending commitment of Truss’s Energy Price Guarantee.
The UK public finances are doomed by these Labour MPs. Even worse than opposing Starmer and Chancellor Rachel Reeves’s welfare reforms, they are likely to elect a new PM who will turn on the spending taps even more furiously.
Hard though it may be to remember now, two decades ago Britain had the novelty of a Labour government which didn’t frighten bond investors, which didn’t drive high earners abroad, taking their tax revenues with them. That was partly to do with Lord Mandelson, who wielded huge influence on the government of Tony Blair.
Mandelson has a fatal attraction to rich and powerful men, which, in Jeffrey Epstein’s case, proved his undoing. But on economic issues he was far more in tune with reality than those who are influential in the Labour party today. We would be in a better position were he and his like still in government.
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