One of Labour’s rising stars has said the party will have failed in government if it does not reduce inequality, even as the prime minister faces a bitter internal battle over a key poverty-reduction measure.
Torsten Bell, the former head of the Resolution Foundation turned Labour MP, said Britain’s longstanding economic problems could not be solved by economic growth alone.
His comments come amid a row over whether Labour should end the two-child benefit cap immediately, with seven MPs losing the whip on Tuesday night after voting for a Scottish National party amendment to do so.
Bell was not one of those to rebel, despite having criticised the cap both as an independent economist and as a Labour candidate.
Speaking to the Guardian about his book Great Britain?, Bell said: “Everybody in the labour movement thinks that a world where half of children in larger households are growing up in poverty isn’t what success looks like.”
But he defended his decision not to vote for the SNP amendment on Tuesday night, saying: “What matters, and has always been my focus, is actually reducing child poverty – not parliamentary game-playing.”
He added that his broader economic message was that the government needed to focus both on boosting growth and cutting relative poverty.
“You won’t be able to claim success if you haven’t both got wages up and leaned against inequality and poverty,” he said.
He added: “My view is that everybody should care about growth and the inequality … If you’re not seeing wages growing, that’s a very, very significant problem. And the old world of politics saying. ‘We just assumed that wages are growing, we’ll just worry about other stuff,’ is like long gone. Both are important.
“Both of them are the routes to higher living standards for poor Britain, for low and middle income Britain. If there’s one single objective, it’s higher living standards for low and middle income Britain. High growth – or some growth – and lower inequality directly delivers both.”
Starmer has described growth as his “single defining mission”, with the word appearing 49 times in the Labour manifesto. The government has a suite of pro-growth policies, including planning reform and government investment in green technologies.
In contrast, the party has said less about reducing inequality, with the word appearing once in its manifesto and the Labour leadership embroiled in a row over the two-child benefit cap.
Paul Johnson, the head of the Institute for Fiscal Studies, argued in the Financial Times this week: “Labour’s manifesto may barely mention it, but consideration of inequality must nevertheless be at the heart of its agenda.”
Bell, mooted in Labour circles as a future chancellor, argues in his book that Britain’s economic problems began earlier than the pandemic, Brexit or public spending cuts from 2010 to 2015.
Instead, he says the UK has for years suffered an almost unique combination of high inequality, thanks to the Thatcher years, and sluggish wage growth, which crashed in the 2008 financial crisis and has not recovered since.
His solution to those problems include many proposals already being pushed through by Labour, including reforming the planning system to encourage housebuilding and boosting investment from both the private and public sector.
But he has also argued for policies that are not part of current Labour thinking, including raising wealth taxes and raising national insurance in return for cutting income tax.
Asked whether he would push for those policies now he has a government job, Bell said: “I’m not going to get into micro policies on tax – that’s for Rachel Reeves [the chancellor].” But he added: “As a point of principle, the more that we treat otherwise similar activities the same the better.”
Bell won his seat of Swansea West with a majority of more than 6,000. But the seat was one of many in Wales and elsewhere in the country where Reform UK came second – a level of electoral success being watched carefully by senior Labour officials. Some in the party argue Reform poses as much of a threat to their chances of a second majority as the Conservatives.
Bell agreed, warning his party: “We are in a phase of social democracy where the basic fault-line is between the kind of nativist-populist right and social democracy, and that is a battle we have to win.”
Speaking about the rise of the hard right across Europe, he added: “It’s not [centre-right] Christian Democrats v [centre-left] social democrats – that isn’t what is on offer.
“In all of our lifetime, the Conservatives have been the dominant governing party in Britain … [but] they are the closest they’ve been in 100 years to ending that position as the natural party of government.”
