Labour’s ‘mission-driven’ government

The five missions of a Labour government. Leader of the Opposition Sir Keir Starmer explained Labour’s “statement of intent to how we intend to govern” through five missions, which will likely form the backbone of their election manifesto. Their priorities are: securing the highest sustained growth in the G7, a zero-carbon electricity system in Britain by 2030, an NHS “fit for the future”, making Britain’s streets safe and breaking down barriers to opportunity (through childcare and education reform).

• Ending ‘sticking plaster politics’. Starmer argues that a “mission-driven government” is required to end what he called ‘sticking-plaster politics’ in his New Years speech; a term to describe the government’s consistent failure to solve complex challenges plaguing the UK economy due to being overly focused on short term solutions to neutralise immediate political challenges. For instance, Starmer quoted the energy price freeze as “an expensive, last-minute fix” for the cost of living crisis, “papering over cracks in our energy security that have been on display for years”.
• Light on detail? The speech has had a mixed reception, with some criticism that it is ‘light on detail’ or that it doesn’t constitute a ‘retail offer’ for voters at the next election. In fairness to Labour, they have said that they will be fleshing out these missions between now and the election, and as former Labour advisor Tom Hamilton argues, the missions will not necessarily form the basis of the ‘pledge card’. 
• The benefits of a ‘mission-led’ approach. IPPR’s George Dibb explains why we need ‘missions’ to drive the UK’s economic renewal: “A mission should provide a clear and measurable goal that shapes the action of a government. It should be an ambition that different parts of government can align around and provide a clear steer for collaboration and partnership between business and government.” 

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Clarifying Labour’s new role for the state. The mission-led approach has received some criticism for being ambiguous about the role of state intervention in markets, which some argue risks an overreliance on private sector delivery. Starmer said he is “not concerned about whether investment or expertise comes from the public or private sector - I just want to get the job done…Mission-driven government is a different way altogether. Not state control or pure free markets, but a genuine partnership”. Interestingly, the refrain of “get the job done” seems to echo the New Labour slogan“what matters is what works”, but with an important difference: in the late 1990s this apparent ambivalence between public and private sectors was used to justify more market involvement in public services, whereas Starmer is using the phrase to justify more state involvement in markets.

• Concerns about a ‘partnership approach’. Private Eye’s Solomon Hughes questioned whether Starmer’s approach goes far enough to ensure the state has a “firm element of control, so public investment doesn’t just flow into private profit” IPPR’s George Dibb argued that “putting in place structures to guarantee public return on public investment is essential” through policies such as a citizen’s wealth fund, state purchasing of equity stakes in businesses through a British Business Bank or UK Investment Bank type structure, or public ownership of public intellectual property. 
• Ensuring government shapes (and doesn’t just serve) markets. To be fair to Starmer, his speech argued that “there is a massive role for the private sector in mission-driven government but if the aspiration is merely to replace the public sector while extracting a rent to privatise the profits, while socialising the risk, that takes us nowhere”. Labour has also already announced policies like a citizens’ wealth fund and a publicly-owned energy generator, but Global Justice Now’s Nick Dearden argues “Starmer will need to go much further…state support must require business to behave very differently” through stronger use of conditionality, pointing to the Inflation Reduction Act in the US as an example of good practice in market shaping. IPPR’s George Dibb also argued that government support should also depend on firms' tax affairs, union recognition, dividends and share buybacks policy and more, as, ultimately “missions are an important part of the puzzle but can't do it alone. Missions have little to say to questions of ownership and power. That's why they have to be combined with other structural & institutional reform”, such as strong competition policy to avoid rent extraction.

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The transformative potential of a mission-oriented government. Missing from much of the commentary around the speech has been a sense of what it means for Labour to be thinking and talking in the language of ‘missions’- with little distinction being drawn between Labour’s ‘missions’ and the government’s five targets. But missions are much more than just targets. A mission-oriented approach to solve ‘grand challenges’ such as climate change is a seminal part of new economic thinking. The idea of using government to explicitly steer the direction of economic activity to achieve ‘missions’ was popularised by Mariana Mazzucato, founder and Director of the UCL Institute for Innovation and Public Purpose. By making strategic investments in particular sectors, such as green industries, an active industrial strategy from an ‘entrepreneurial state’ can kick-start the development and take-up of new technologies, develop new markets for UK companies, trigger greater private sector investment, and tackle major environmental challenges. 

• Labour is tapping into the new global consensus. The ‘Asian Tiger’ experience is often referred to as an example of how governments can steer the direction of growth and technological development to support domestic competitive sectors in the direction of desired goals, e.g. the Tiawanese government directly steered universities and firms R&D processes to become a global hub for computer chip exporting. Moving away from a laissez faire approach to economic development has been an emerging global consensus for years: 84 countries (accounting for 90% of global GDP) adopted formal industrial policies between 2013-2018. It is also important to note that the recent Conservative government has had a stop-start relationship with industrial policy, including policies such as the National Security and Investment Act, the British Business Bank’s Future Fund and the Advanced Research and Invention Agency. 
• Giving business what they want? While some might suggest that this emphasis on the role of the state to design economic objectives might be unwelcome to businesses- in fact this is exactly what many business leaders have been calling for. The CBI’s Tony Danker has been vocal in criticising the lack of economic direction from recent governments and the absence of a sense of partnership between state and private sector on joint challenges. Danker’s call for a long-term ‘economic vision’ isn’t a million miles away from the ‘missions’ approach Labour has set out.‍
• “Seize the interventionist moment”. The FT’s Martin Wolf recently warned that “the new interventionism could pose a threat to global trade”, referencing how Joe Biden’s plan for creating a domestic green industrial base centred around electric vehicle manufacturing has put the US at the centre of a major trade dispute with the EU and UK. However, Global Justice Now’s Nick Dearden argues “we should defend policies that allow all countries to develop their own industrial strategies to build fairer, more sustainable economies…it is the trade rules that need to give”. Economist James Meadway also notes that the EU’s “decades of dogged commitment to free-market rules are being shredded with surprising speed” and state-aid rules are “on the verge of being weakened” to allow more government subsidies and public ownership in the single market. It is in this context that “Labour has an important political opportunity to seize the interventionist moment and define its terms for Britain”.