After a barren winter, accusations of “magic money trees” are taking root once again. In light of tens of billions of pounds of uncosted tax pledges in the Tory leadership campaign, the Labour leader, Keir Starmer, has promised there will be “no magic money tree economics” if his party gets into power. Labour’s social media team has been spreading the message, too, including “shaking the magic money tree” in its “Tory leadership bingo” card.
The line has traditionally been used against Labour by the Conservatives, perhaps most famously by Theresa May in 2017 as she tried to discredit Jeremy Corbyn’s spending commitments. The adage speaks to the wider rightwing narrative that the Labour party (or the left more generally) cannot be trusted with the economy – a myth that has long been effectively deployed by rightwing ministers and media alike. Think about the role the “no money left” note – a joke by Labour’s outgoing Treasury chief Liam Byrne to his successor in 2010 – had in embedding George Osborne’s claim that the cause of Britain’s financial problems wasn’t the global crash but Labour’s “overspending”.
Starmer’s desire to tackle this stereotype is easy enough to understand. Weaponising your opponent’s own attack lines against them can be appealing – a way to detoxify an issue in voters’ minds or shift the blame entirely. But more often than not, you just end up repeating your opponent’s argument without ever shifting the dial. The Labour party bringing up the topic of fiscal responsibility to fight the Tories is akin to a company putting their rival’s inferior products in their shop window. It’s just free advertising. Within days of Starmer making the “magic money tree” speech, a Tory MP was using the phrase on LBC. That the line is now being used in the context of Tory tax and spending plans does not mark progress. It simply shows how the right’s framing has been so successful that even the left has adopted it.
At its core, the magic money tree is an inherently conservative narrative. It deliberately propagates a false understanding of how the economy works, just as Osborne’s false framing of government spending as akin to a “household budget” throughout the austerity years was used to justify sweeping public funding cuts. Above all, it seeks to delegitimise arguments for public spending, framing policies that improve conditions for ordinary people as unrealistic and wasteful. It is not a coincidence that the “magic money tree” line is more likely to be evoked in response to funding social security than tax cuts for millionaires. It has never simply been about signifying disapproval for uncosted spending, but rather for spending on areas that the status quo deems frivolous.
If the magic money tree does exist, it is growing in the Tories’ garden. Under the Conservatives, there is always money for the rich: the headline rate of corporation tax has been cut from 28% in 2010-11 to 19% in 2017-18 all while the public was told there had to be “savings” on the poorest’s benefits. During the pandemic, the government found millions of pounds for PPE contracts to Tory chums, and almost £5bn in written-off Covid loans. Meanwhile, failing to invest in the social safety net only racks up the taxpayer’s bill. The impact of child poverty costs the UK £38bn a year, according to research by Loughborough University.
It is entirely possible for Labour to point this out – to make the case that the Conservatives are careless and wasteful with public funds, and that government cuts cost more than they save – but they will not achieve it using gimmicks, and certainly not with ones the Tories have designed. We saw this recently when Labour tried to skew the Conservatives’ reputation for efficiency by attacking the government’s policy to deport some asylum seekers to Rwanda because “it won’t work”, as if the problem with deporting torture victims is that the Tories aren’t very good at it. We witnessed it again last week, when Starmer sacked a shadow transport minister for joining the picket lines, largely out of fear the Tories and rightwing press would reframe the chaos as “Labour’s summer of strikes”. There was no win for the left in either capitulation – it just pushed it further from its core voters and values.
What’s particularly grating is that, when it comes to the magic money tree, it isn’t simply that Starmer is reinvigorating a Tory narrative – it’s that he’s breathing life into one that was already dead. The public’s concern about debt and borrowing was always era-specific to the aftermath of the 2008 financial crash, and the pandemic has well and truly eradicated it. From the furlough scheme to the vaccination programme, coronavirus killed the myth that large-scale government spending was not necessary, responsible or possible. The cost of living crisis, on top of crumbling NHS services, only shows that smart government investment is not something to be feared – it is to be welcomed.
Rather than peddling Tory economic narratives, this is the moment for Labour to make the case for a different type of economic system. This is not a matter of ideology or even left v right – it’s about understanding the pressure that British families are now facing, and that the old establishment way of doing things is not going to save us. The Bank of England has just predicted that the UK will enter a recession later this year, and hiked interest rates to boot. The weekly food shop is about to hit its highest price in 14 years. A record 6.6 million patients are waiting for NHS treatment in England. Soaring energy bills are set to push millions of families into poverty this winter. If Starmer cannot make the case for bold economic thinking now, he surely never will.