Keir Starmer said he would not be “ideological” about nationalising public utilities, after the shadow chancellor, Rachel Reeves, prompted a backlash by suggesting Labour had ditched plans to take rail, water and energy back into public ownership.
On the day when Starmer gave a keynote speech highlighting his intention to focus on “growth, growth, growth”, a shadow cabinet row broke out about the party’s policy on renationalisation.
The shadow transport secretary, Louise Haigh, tweeted: “Labour is committed to public ownership of rail,” after both Reeves and Starmer appeared to back away from the policy.
Asked on BBC Radio 4’s Today programme on Monday whether Labour supported the nationalisation of rail, water and energy, Reeves pointed to the fact that Starmer had scrapped the 2019 manifesto, and suggested the policy would conflict with her determination to balance the books.
She said the policy was “a commitment in a manifesto that secured our worst results since 1935”, adding that “to be spending billions of pounds on nationalising things, that just doesn’t stack up against our fiscal rules”.
The shadow transport minister Sam Tarry echoed Haigh’s message, retweeting footage of a recent speech from the dispatch box at which he underlined the case for rail nationalisation. “Just to be 100% clear, this is the Labour party position,” he tweeted.
When Starmer was challenged about Reeves’s remarks, he said: “I take a pragmatic approach rather than an ideological one. I agree with what Rachel Reeves said this morning. Having come through the pandemic, it’s very important we have very, very clear priorities and that’s why we’ve set out fiscal rules already as an opposition.”
“That is what I mean about not being ideological about it,” he added.
Starmer later clarified his position in an interview with the Mirror, saying he agreed with Reeves but “rail is probably different from the others because so much of our rail is already in public ownership”.
The leftwing campaign group Momentum claimed nationalisation was popular with the public, and pledged to support a Green New Deal motion at Labour’s annual conference that would include public ownership of key assets.
“As the cost-of-living and climate crises bite, public ownership is a vital and popular policy – it is self-defeating for Rachel Reeves to reject it in favour of a failed status quo,” a Momentum spokesperson said.
In Starmer’s keynote speech, delivered in Liverpool, he promised that Labour would not be “trapped” in its history and would focus on growth rather than redistribution.
Starmer has asked the former prime minister Gordon Brown to look at new forms of economic devolution and Jim O’Neill, the former chief economist of Goldman Sachs, to look at how Britain “could be made the best country in the world to start a new business”.
He evoked the 1996 Blackpool conference speech when Tony Blair said “education, education, education” would be at the heart of Labour’s time in government. This time the three words were “growth, growth, growth”.
The Labour leader said the UK economy was “weaker than our competitors. Less resilient. Brittle. And ultimately we’re all poorer for it. That’s why I’m clear. Labour will fight the next election on economic growth. There is no task more central to my ambitions for Britain than making the country and its people better off.”
Starmer called the former chancellor Rishi Sunak “the architect of the cost of living crisis” while Liz Truss, Sunak’s Tory leadership rival, was “the latest graduate from the school of magic money tree economics”.
He said that under their watch the average British family was £8,800 poorer than their equivalents in advanced economies. “That’s not just a failure of policy, it’s a failure of philosophy. Both Rishi Sunak and Liz Truss rage against the dying of the Thatcherite right. They don’t understand that economic strength in the 21st century needs partnership,” he said.