WHEN Keir Starmer finally got his prime ministerial phone call with President Trump on Sunday, according to Number 10 the two “discussed trade and the economy, with the Prime Minister setting out how we are deregulating to boost growth.”

Which is odd, because the word “deregulation” isn’t in the Labour manifesto. In fact, before the election Business Secretary Jonathan Reynolds argued deregulation was a Tory sin that didn’t bring growth. 

Starmer was telling Trump the truth — Labour are pressing regulators to let business do what it wants in the desperate hope they will get some “growth” to drag up their low polling. But why does Keir tell Trump the truth before British voters? 

Perhaps aware that they had stumbled into openly admitting they are a “deregulation” government, despite previous promises, Starmer finally decided to lay this out by writing in The Times, making a Tory argument in the Tory press.

In his Times article Starmer admitted: “This may seem like an unusual goal for Labour politicians. But deregulation is now essential for realising Labour ambitions in this era.” 

He referred admiringly to Thatcher’s deregulation and launched into purple prose about the need to hack at “thickets of red tape” to “clear out the regulatory weeds and allow a new era of British growth to bloom” and “curb regulator overreach.”

While it doesn’t mention “deregulation,” the manifesto does propose “reform” of “planning regulation” to allow more infrastructure and houses to get built. This is an area where Labour can say they have a mandate. 

But in energy, water, social care and elsewhere the manifesto proposes a “tougher system of regulation.”

If you look at Labour’s Industrial Strategy from Labour 2023, Jonathan Reynolds says in the introduction that Britain is stuck with low growth and productivity because “the Conservatives are offering more of the same. Stripped bare public services, reliance on too few sectors and reliance on deregulation.”

Which sadly seems to be Rachel Reeves’s plan, with reliance on south-east developments like Heathrow and the Oxford-Cambridge “Silicon Valley,” cuts to the public sector, and a new deregulation rush.

In 2020 Keir Starmer appointed former Labour prime minister Gordon Brown to run a commission on how to devolve “power, wealth and opportunity” throughout the nation. In December 2022 Starmer personally helped Brown launch this “commission on the UK’s future” report on creating “a new Britain” by “renewing our democracy and rebuilding our economy.”

Brown is equally fierce on deregulation, arguing “a government that pursues purely free market policies like privatisation and deregulation claims to be liberating business from unnecessary red tape and taxation. 

“But it is really giving up any responsibility for an industrial policy, and so for where in the country or in which sectors of the economy growth is supported.”

So why the sudden rush to Thatcherism? 

Labour’s professed policy was to encourage economic growth by a mix of public investment — like the “National Wealth Fund” – and strategic deregulation, like planning. 

That’s quite a typically “New Labour” mix, an attempt to do both business-led renewal and some expansion of the social sector. But Blair did so on the back of a booming economy. Starmer is trying to do this after years of stagnation.

Their timidity has run up against an economy where redirecting money from big business and the rich to the welfare state or public investment is much less easy. 

So they are giving up on the social investment ambitions — the National Wealth Fund and “Green New Deal” are shrinking, benefits are being cut. In a panic rush they are pressing harder on “deregulation” hoping this will attract some foreign direct investment from the Middle East or other oligarchic states. Hence Labour pressing the Competition and Markets Authority, Financial Conduct Authority, Ofwat, Ofcom et al to prioritise “growth.”

You could feel some of this desperation when Jonathan Reynolds claimed on the BBC this week that Labour was “creating a sense of excitement and enthusiasm” with their announcement of a third Heathrow runway.

The BBC’s presenter challenged Reynolds, saying “people can’t pay their bills because they feel like they might be in a better mood.” Reynolds, clearly shaken, responded: “The animal spirits that govern an economy determine things like investment, wages, jobs and that’s what we need more of.”

This may have sounded like Reynolds was making some mystical call to animal gods to help him, but the quote actually comes from the economist JM Keynes. But Reynolds’s invocation of the spirits shows he misunderstands how they work. 

Keynes was arguing that the “market” isn’t as rational or mathematical as free marketeers claim, that sometimes economic ups and downs are moved by emotions and feelings of investors — the “animal spirits”: he was making the case that the “free market” would not balance out with “full employment” because whatever the mathematical model, it wasn’t a rational system. 

For this reason, Keynes argued the case for the government to step in with public investments and increases in demand. The volatility of the “animal spirits” are a reason for government action, not for Labour ministers to try look all smiley at CEOs while grimacing at those who need public services. 

Blue Labour 

Maurice Glasman’s “Blue Labour,”  founded in 2009, claims to be “economically left wing but socially right wing.” 

They periodically get promoted by the press, usually to use their “socially right-wing” views to attack the Labour leadership. This was true for Ed Miliband and Jeremy Corbyn. 

Now the right are starting to turn on the centrist Keir Starmer, they are back in the news. The attack only works under the cover of claims they are “economically left wing,” but these are ridiculously thin: Glasman made them even thinner when he was invited by US Vice-President JD Vance to go to President Trump’s inauguration. 

Glasman told the PoliticsHome website that Team Trump is “pro-worker, so they hate globalisation” and that “a big part of Maga square [meaning Trump’s “Make America Great Again” movement] is working-class, and people like Steve Bannon and [JD] Vance are very engaged with that.”

It should be obvious that anyone who can convince themselves that Trump, Vance and Bannon are out to do anything other than con American workers is not somebody who can convincingly claim to be “economically left wing.”