Aafter a harsh winter, the accusations of ‘magic money trees’ are once again taking root. In the face of tens of billions of pounds of priceless tax pledges in the Tory leadership campaign, Labor leader Keir Starmer has promised there will be “no magic money tree economy” once his party comes to power. The Labor social media team also spread the word, including “shaking the magic money tree” in its “Tory leadership bingo” Map.
The line has traditionally been used against Labor by Conservatives, perhaps most famously by Theresa May in 2017 when she tried to discredit Jeremy Corbyn’s spending commitments. The adage speaks to the wider right-wing narrative that the Labor Party (or the left more broadly) cannot be trusted with the economy – a myth that has long been used effectively by right-wing ministers and media. Consider the role the ‘no more money’ note – a joke from Labor outgoing Treasury chief Liam Byrne to his successor in 2010 – played in anchoring George Osborne’s claim that the cause of Groot’s financial troubles Britain was not the global crash, but Labour’s ‘overspending’. ”.
Starmer’s desire to tackle this stereotype is easy enough to understand. It can be appealing to arm your opponent’s own lines of attack – a way to detoxify a problem in the minds of voters or completely shift the blame. But more often than not, you’re just repeating your opponent’s argument without ever shifting the knob. The Labor party raising the issue of fiscal responsibility to fight the Tories resembles a company displaying their rival’s inferior products in their shop window. It’s just free advertising. Within days of Starmer giving the ‘magic money tree’ speech, a Tory MP… using the phrase on LBC. That the line is now being used under Tory tax and spending plans does not mark progress. It simply shows how the framing of the right has been so successful that even the left has adopted it.
At its core, the magic money tree is an inherently conservative story. It deliberately promotes a misunderstanding of how the economy works, just as Osborne’s false framing of government spending as akin to a “household budget” was used during the austerity years to justify sweeping cuts in public funding. Above all, it tries to delegitimize public spending arguments and formulate policies that improve conditions for ordinary people as unrealistic and wasteful. It’s no accident that the “magic money tree” line is conjured in response to Social Security funding rather than tax cuts for millionaires. It was never just about disapproving of unpriced spending, but rather spending on areas the status quo deems frivolous.
If the magic money tree exists, it grows in the garden of the Tories. Among the conservatives, there is always money for the wealthy: the nominal corporate tax rate has been cut from 28% in 2010-11 to 19% in 2017-18, while the public was told to “cut down” on the benefits of the poorest. During the pandemic, the government found millions of pounds worth of PPE contracts to Tory friends and nearly £5 billion in written off Covid loans. Meanwhile, not investing in the social safety net only adds to the taxpayer’s bill. The impact of child poverty costs the UK £38 billion a year, according to research from Loughborough University.
It is entirely possible for Labor to point this out – to argue that the Conservatives are careless and wasteful of public funds, and that the government is austere more than it saves – but they will not achieve it with tricks, and certainly not with gimmicks. the Tories designed. We saw this recently when Labor tried to tarnish the Conservatives’ reputation for efficiency by attacking government policy to deport some asylum seekers to Rwanda because “it won’t work”, as if the problem of deporting torture victims is that the Tories’ aren’t very good at it. We witnessed it again last week, when Starmer fired a shadow transport minister for joining the picket lines, largely out of fear that the Tories and the right-wing press would reformulate the chaos as “Labour’s summer strike”. There was no victory for the left in either capitulation — it just pushed it further from its core voters and values.
What’s especially troubling is that, when it comes to the magical money tree, it’s not just that Starmer is breathing new life into a Tory story — it’s that he’s breathing life into a story that was already dead. Public concerns about debt and loans were always time-bound before the aftermath of the 2008 financial crash, and the pandemic has wiped it out well and truly. From the furlough to the vaccination program, the coronavirus has shattered the myth that large-scale government spending was not necessary, justified or possible. The cost of living crisis, on top of crumbling NHS services, just goes to show that smart public investment is not something to be feared – it is to be welcomed.
Rather than vent the Tory’s economic narratives, now is the time for Labor to advocate for a different kind of economic system. This is not a question of ideology or even left-to-right – it’s about understanding the pressures British families are now facing, and that the old established way of doing things won’t save us. The Bank of England has just forecast the UK to enter recession later this year and has raised interest rates. The weekly food store is about to hit its highest price in 14 years. A record 6.6 million patients are waiting for NHS treatment in England. Rising utility bills will push millions of families into poverty this winter. If Starmer can’t argue for bold economic thinking now, he certainly never will.