A union chief has warned Labour not to become a “1990s tribute act” to Tony Blair if it wins the next general election.
Sharon Graham, general secretary of Unite, said the party needed to be bolder with its economic policies if it wanted to make a difference for working people.
Writing in The Sunday Times, she said Britain was in a “very different place” to when the party last came to power in 1997 – when there was money to spend and the economy grew “without having to do much except keep their hands firmly on the tiller”.
She argued that a “light touch” approach would not work during the cost of living crisis that has left working people “existing and not living” and some of Labour’s flagship policies – like it’s “diminished Green New Deal” don’t go far enough.
“For working people to share in the spoils and avoid the pitfalls, the future will have to be negotiated,” she wrote.
“That means, consigning 1997 to the history books.”
Ms Graham called for “serious intervention underpinned by a strategic plan” – arguing bold policies like nationalising energy should be put on the table if Labour is “serious about changing society”.
In a lengthy critique, she said refusing to tax wealth or excess profits and a lack of a coherent industrial plan were “all severely limiting Labour’s options” and economic reform was needed.
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In a warning to Sir Keir Starmer, she said: “If Labour is intent on becoming a 1990s tribute act in an age where laissez faire does not belong, big questions will remain unanswered.
“Where will the money come from? What are we going to be left with? If it ends up being austerity by another name plus the hyping of comparatively small-scale investment, it won’t be an enticing prospect.
“Better than the other lot? For sure. But a government to lead Britain out of decline and make it work for everyday people? Probably not.”
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0:51
Starmer addresses new shadow cabinet
Ms Graham’s piece came after a shadow cabinet reshuffle saw those on the more Blairite wing of the party, including Liz Kendall, Pat McFadden and Shabana Mahmood, rewarded with promotions,while some associated with the soft left were purged.
Sir Keir’s spokesperson has denied acting ideologically, saying he has assembled a top team that is ready to govern if it wins the next election.
After more than a decade out of power, Sir Keir is hoping to become the first Labour prime minister to win at the ballot box since Tony Blair – who won two terms after his landslide victory in 1997.
He has sought to rebuild the party focusing on a more centrist style than his predecessor, Jeremy Corbyn, with a focus on fiscal Conservatism.
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Labour’s policies are likely to come under further scrutiny in the coming days, as unions convene in Liverpool for the annual TUC conference.
Issues being debated this week include employment rights and the cost of living crisis.
Writing in the Sunday Mirror, deputy Labour leader Angela Rayner promised the “biggest upgrade to workers’ rights in a generation”.
She said this included beefing up laws that ban firms from blacklisting union workers.
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Labour will win Tamworth seat, poll suggests
Ms Rayner, who will give a speech at the TUC conference on Tuesday, wrote: “Blacklisting doesn’t just ruin livelihoods, it ruins lives. It’s a destructive practice that leaves people locked out of work, often facing poverty as a result.”
Officials say the new law, requiring minimum service levels during industrial action, is unnecessary and unworkable and will do nothing to resolve disputes.
Unions, including the RMT and Fire Brigade Union, will call for a legal challenge to the legislation during debates at the conference.
The government’s decision to slash foreign aid will lead to unrest, further crises and threaten UK security, a group of cross-party MPs has warned.
A report by the International Development Committee found the decision in February to reduce aid to 0.3% of gross national income (GNI) by 2027/28 – coupled with the US cutting its aid budget – is having a severe impact.
The foreign aid budget was cut to invest in defence from 0.5% of GNI, which was meant to be an interim reduction from 0.7% to cope with economic challenges caused by the pandemic.
Total aid spending is set to reduce from £14.1bn in 2024 to £9.4bn by 2028/29.
The committee, chaired by Labour MP Sarah Champion, said spending is being prioritised on humanitarian aid over development, which “builds long-term resilience and should lead to reducing the need for humanitarian aid”.
They said the international development minister, Baroness Chapman, has made it clear “the UK will remain a leading humanitarian actor”.
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But the committee said while they are glad those in “desperate need of aid will be prioritised, particularly in the regions of Ukraine, Gaza, and Sudan”, they are concerned about the long-term effect of pulling development aid.
“We are concerned that slashing development aid will continue to lead to unrest and further crises in the future, presenting a threat to UK security,” the MPs said.
Image: David Lammy, when he was foreign secretary, on a visit to Chad to see how aid agencies are dealing with the humanitarian crisis. Pic: PA
Risk to UK’s national security
They said a reduction in foreign aid will have “devastating consequences across the world”.
The committee said it recognises an increase in defence spending is needed, but “to do this at the expense of the world’s most vulnerable undermines not only the UK’s soft power, but also its national security”.
They said the government must make “every effort” to return to spending 0.5% of GNI on foreign aid “at a minimum, as soon as possible”.
The committee also found long-term funding for development is “essential” to ensure value for money is achieved.
However, they accused the government of seeing value for money only in terms of the taxpayer, saying that downplays “equity and the importance of poverty reduction” and causes tension.
They agreed accountability to the taxpayer is “key to reducing poverty globally, and maximising the impact of each pound to do so, must remain the Foreign, Commonwealth and Development Office’s central tenet for official development assistance spending”.
Image: A Foreign Office team member helping evacuees in Cyprus in 2023. File pic: Reuters
Spending on migrant hotels
Spending on migrant hotels in the UK was also criticised by the MPs, who said while international aid rules mean they can cover refugee hosting for the first 12 months in the UK, given the recent cuts, that is “incompatible with the spirit” of the UN’s OECD Development Assistance Committee rules.
“Excessive spend on hotel costs is not an effective use of development budget,” they said.
The committee recommended costs of housing refugees should be capped “at a fixed percentage” of total foreign aid spending “to protect a rapidly diminishing envelope of funding”.
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6:09
Inside Afghanistan’s hunger crisis
‘Short-sighted’
Reacting to the report, Timothy Ingram, head of UK advocacy at WaterAid, said: “The UK government’s decision to cut the aid budget was one that defied both logic and humanity. Aid when delivered effectively in partnership with local communities is not charity – it’s an investment in a safer and more prosperous world.
“Undermining it, especially vital finance for water, weakens the world’s resilience to climate shocks, pandemics, and conflict – impacting the one in 10 people without access to clean water, and ultimately making us all less safe.
“This is a short-sighted political decision with long-term consequences for the UK’s stability, economy and global standing. We join with MPs in urging the government, once again, to urgently reconsider.”
Lack of transparency over private contractors’ spending
In the report, MPs said it is worried the Foreign Office has not reviewed aid spending on multilateral organisations, which allows the UK less direct influence over spending, such as the World Bank or vaccine organisation Gavi since 2016, despite spending nearly £3bn on them in 2024.
They said the use of private contractors does not offer inherently poor value for money, but a lack of transparency and data can mean under-delivering and a loss of “in-house” expertise.
Image: Palestinians carry aid supplies that entered Gaza. Pic: Reuters
‘Tragic error’
Sarah Champion, chair of the International Development Committee, said: “Ensuring aid delivers genuine value for money has never been more important. As major donors tighten their belts, we have to ensure that every penny we spend goes to the people most in need.
“The former Department for International Development was rightly seen as a world leader in value for money; the FCDO is broadly hanging on to that reputation. But it must make some urgent improvements.
“Reducing poverty must be the central aim of the development budget. While accountability to the taxpayer is an important consideration, the FCDO’s current definition of value for money risks diverting focus away from improving the lives of the most vulnerable – the very reason the aid budget exists at all.
“The savage aid cuts announced this year are already proving to be a tragic error that will cost lives and livelihoods, undermine our international standing and ultimately threaten our national security. They must be reversed.
“Value for money is critical to making the most of a shrinking aid budget. While this report finds some positives, the government must take urgent action to wipe out waste and ensure the money we are still spending makes a genuine difference.”
Rachel Reeves has said she is determined to “defy” forecasts that suggest she will face a multibillion-pound black hole in next month’s budget.
Writing in The Guardian, the chancellor argued the “foundations of Britain’s economy remain strong” – and rejected claims the country is in a permanent state of decline.
Reports have suggested the Office for Budget Responsibility is expected to downgrade its productivity growth forecast by about 0.3 percentage points.
Image: Rachel Reeves. PA file pic
That means the Treasury will take in less tax than expected over the coming years – and this could leave a gap of up to £40bn in the country’s finances.
Ms Reeves wrote she would not “pre-empt” these forecasts, and her job “is not to relitigate the past or let past mistakes determine our future”.
“I am determined that we don’t simply accept the forecasts, but we defy them, as we already have this year. To do so means taking necessary choices today, including at the budget next month,” the chancellor added.
She also pointed to five interest rate cuts, three trade deals with major economies and wages outpacing inflation as evidence Labour has made progress since the election.
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Chancellor faces tough budget choices
Although her article didn’t address this, she admitted “our country and our economy continue to face challenges”.
Her opinion piece said: “The decisions I will take at the budget don’t come for free, and they are not easy – but they are the right, fair and necessary choices.”
Yesterday, Sky’s deputy political editor Sam Coates reported that Ms Reeves is unlikely to raise the basic rates of income tax or national insurance, to avoid breaking a promise to protect “working people” in the budget.
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This, in theory, means those on higher salaries could be the ones to face a squeeze in the budget – with the Treasury stating that it does not comment on tax measures.
In other developments, some top economists have warned Ms Reeves that increasing income tax or reducing public spending is her only option for balancing the books.
Experts from the Institute for Fiscal Studies have cautioned the chancellor against opting to hike alternative taxes instead, telling The Independent this would “cause unnecessary amounts of economic damage”.
Although such an approach would help the chancellor avoid breaking Labour’s manifesto pledge, it is feared a series of smaller changes would make the tax system “ever more complicated and less efficient”.
It emerged over a series of days that the so-called “Prince of Darkness” had maintained his relationship with the disgraced financier following his first conviction, and had told him to fight it in the courts.
It led Sir Keir Starmer to dismiss him, just one day after he had publicly backed the peer in the House of Commons at Prime Minister’s Questions.
Sir Keir said new information had come to light, which showed Lord Mandelson’s relationship with Epstein was “materially different” to what he had told the government.