Spending review and London: Labour defers to Nigel of the North

The government can boost the UK economy by backing its capital city or it can let Faragism set its agenda. It can't do both

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Yesterday’s parliamentary theatre was more of a comedy than its authors had in mind, one of the absurdist kind. Though penned as a bravura monologue to vanquish enemies and banish doubts, the subtext of Rachel Reeves’s spending review speech was nervously defensive – a rhetorical building of barricades around fragile Labour settlements north of Watford that she, Sir Keir Starmer and their backstage aides fear will be overrun by a sniggering public schoolboy in the Commons cheap seats, armed with a big mouth and a wooden spoon.

Well, why wouldn’t they? After all, it’s only four long years until the next general election. Labour’s majority is only a mountainous 156. When in such desperate straits, what is to be done except construct an entire strategy around trying to convince electors in Durham and Dudley who voted Leave in 2016, who get their views from GB News and agree with each other daily that all these politicians are as bad as each other, not to tell opinion pollsters they like the look of Reform UK?

Part of that strategy appears to be to make a point of sidelining London, as if somehow the city whose economy contributes almost a quarter of the entire UK’s economic output and generates taxes that are distributed across its regions and nations, preventing all their rainbows from turning black-and-white, is at best an embarrassment and at worst a drag on Labour’s great recovery mission. The darkly funny part is that London is absolutely fundamental to it.

It is reasonable for Labour to be concerned about its current lack of popularity: after all, they did lose that Runcorn by-election. It is also right. Look at the alternatives: a desperate and dying Conservative Party that has learned nothing from its hammering last year, and a shit-stirring fraud called Nigel Farage.

There is, though, such a thing as over-thinking. What, exactly, did Reeves and her advisers imagine would be gained by her mentioning London only in passing slights and furtive asides, and by declining to fund even a pretty modest public transport project – the Docklands Light Railway extension to Thamesmead – when without the capital’s economy being stoked up to full power, achieving national growth will be much harder?

Perhaps they have in a mind discontented over-60 archetypes in Clitheroe or Cleveland. Perhaps they imagine such citizens, upon learning that a new bus fleet has been promised for St Helens and that a Tees Valley railway platform may be lengthened, turning to each other and exclaiming, “What fools we were to be seduced by that rogue who fashions himself Nigel of the North! Let us once more embrace the noble Sir Keir, without delay!”

Perhaps those Labour tactical brains have concluded that anti-London sentiment, a dismal combination of misplaced resentment and misinformed grievance about public investment – one long nurtured by politicians such as Andy Burnham, legitimised by the supposed think tank IPPR North and popularised by dimwits at the Guardian – is a virtuous weapon for centre leftists to deploy in the battle for re-election in 2029. Farage can’t stand the place, and look at all the helpful coverage he’s getting!

In most ways, this government is different from and better than the degenerating Tories they replaced. The three pillars of Reeves’s approach to growth, stability, reform and investment, are hugely preferable to their equivalents under Boris Johnson, Liz Truss and Rishi Sunak – chaos, regression and decline. Neither is their casting of London as a problem, rather than a key part of the solution, as extreme or idiotic as the Tories’ was.

There is, for example, a massive contrast between the four-year, £2.2 billion wedge Reeves is to give Transport for London to, at last, complete the introduction of new Piccadilly line trains, buy a new tram fleet and more, and the tortuous series of short-term, top down micromanaged settlements that had to be dragged out of her predecessors.

That said, BusinessLDN chief executive John Dickie speaks for many London leaders in declaring the government’s reticence about coughing up for the DLR extension “baffling“. He also expresses shared anxiety about how much of the greatly increased affordable housing budget will be allocated to London, where the supply and affordability emergency continues to escalate.

Finding the billion or so needed for the DLR scheme would have set a path towards up to 30,000 new homes being built in Beckton and in Thamesmead itself, making Angela Rayner’s target of 88,000 a year look just a little less implausible.

Meanwhile, at London Councils there is gratitude for extra money for temporary accommodation and children’s social care, but unhappiness about a “modest” overall increase in funding and worry that changes being considered to the way councils are funded will fail to reflect the capital’s high levels of poverty. The same fear that the degree of need in London will end up unrecognised has been expressed by London child poverty campaigners.

The most ominous moment in Reeves’s speech was her agreement with the tendentious view that “past governments have underinvested in towns and cities outside London and the south east” – ominous, not because other parts of the UK do not need and deserve better than they’ve been getting, but because it was trite and foolish to feed and endorse the prejudice against London, as a place and an idea, that is so divisive, so damaging and so undermining of the national unity so urgently required if the menace of Right-populism, whichever party peddles it, is to be defeated.

The Chancellor must surely know that any weakening of London’s economic power will not lead to a virtuous regional “rebalancing” but to a national levelling down, from Aberdeen to St Ives. Does Labour want to rebuild Britain or defer to Farageism’s falsehoods? It can’t have it both ways.