Defeating far-right populism will require Labour to radically overhaul its “arid” approach to raising living standards in left-behind communities, the former Bank of England chief economist has said.
Andy Haldane warned that Labour’s growth plans were failing to support parts of the country where voters feel neglected and disenfranchised.
With ministers under pressure to respond to a summer of unrest, he said the “single most important thing” Keir Starmer’s government could do was to rethink its economic approach before the autumn budget.
He said: “We need a story of growth that isn’t aridly told from 30,000 feet, but speaks to the lived experience and to the prospects and opportunities of workers in the everyday economy.
“A sense of people progressing in their lives, of being invested in, is the absolute foundation stone of curbing disaffection with the incumbent parties – and therefore doing something to turn the tide of populism.”
Calling on the government to devolve more power to regional mayors and prioritise investment in skills, training, transport and affordable housing, Haldane said it was “self evident” that a change in course was required.
No governing party since 1983 has seen its polling fall so far in its first year in power. Support for Nigel Farage’s populist Reform UK has surged, with backing from more than a quarter of voters.
Earlier this year Haldane told the Guardian that the Reform leader was the closest Britain had to a “tribune for the working class”, as he warned Labour to do more to invest in struggling local areas.
Starmer has said Britain will “never surrender” to far-right protesters who use the English flag as cover for violence and intimidation, after Saturday’s march in central London and a summer of flag demonstrations.
Haldane was speaking to the Guardian to mark the launch of a report for Claire Ward, Labour’s directly elected mayor of the East Midlands, which urged the government to hand more power to the region to boost the local economy.
Ward said events at the weekend showed many people were “simply fed up with not getting change” a year into a Labour government.
“They are fed up with not seeing delivery on the ground, of not having opportunity to access skills, good jobs, and the public services they want to see. And I understand that. It is the reason why government and ourselves in the region have to go and make sure we are delivering as quickly as possible.
“We have an opportunity to do that at local level in the region and I expect government to lean into it and give us the support to do so. And that will help people.”
Setting out 10 recommendations for Derby, Nottingham and the surrounding area, the report found that closing an investment gap between the East Midlands and the rest of the UK could unlock £200bn in economic benefits by 2035.
The report from the Inclusive Growth Commission – chaired by Haldane and produced by the Royal Society for Arts thinktank – called for more investment in social connections, skills and transport links.
Using an “opportunity escalator” toolkit to analyse the strengths of the local economy, it said the region’s top 18 new industrial sites could boost 30,000 low earners’ wages by £6,700 a year.
Haldane said Labour had done “precious little” to invest in skills in its first year in power. In Starmer’s reshuffle earlier this month after the exit of Angela Rayner, the brief of overhauling the skills system was handed to Pat McFadden, the work and pensions secretary.
Haldane said: “We need to think completely afresh about our skills infrastructure, from early years to adulthood, to give people sense of not being afterthoughts, of them not being left out.
“Without that people’s sense of dissatisfaction will only continue and possibly even grow. A sense of people progressing in their lives, of being invested in, is the absolute foundation stone of curbing disaffection with the incumbent parties and therefore doing something to turn the tide of populism.”
The government was approached for comment.
