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Labour’s caution won’t save Britain’s public services. Here’s what could.

Simon Wren-Lewis’s latest Mainly Macro post makes a simple but urgent point: incrementalism won’t work for Keir Starmers ‘Labour In Name Only’ government.

The crisis is too deep, the services too degraded, the voters too disillusioned.

And he’s right — up to a point.

But there’s something missing in his analysis, something evasive.

He floats the idea that Starmer and his Chancellor, Rachel Reeves, are caught in a bind between media, markets and economic orthodoxy, when the truth may be blunter: they’re not constrained — they just don’t want to do what needs to be done.

Labour is not preparing to govern radically.

It is preparing to manage decline slightly more humanely.

And that’s not good enough.

The NHS isn’t safe either

Wren-Lewis rightly points out that water, energy and transport are in a state of visible collapse.

But let’s add something critical: the NHS isn’t safe from market failure just because it hasn’t been fully privatised.

Contracting-out has gutted consistency and accountability.

Mental health care, social care, and diagnostics have become postcode lotteries.

It’s still free at the point of use, but the chances of getting timely, quality care depend increasingly on where you live, how much you can pay to go private, or who you know in the system.

A responsible government would say this clearly: healthcare fragmentation is already damaging outcomes — and reversing it is both urgent and popular.

Tax isn’t the problem — tax is the solution

Wren-Lewis thinks Labour’s refusal to raise taxes is a problem of misplaced political caution. But it’s more than that.

Labour has boxed itself into a fiscal worldview where wealth is untouchable, investment is unaffordable, and growth will somehow emerge from inertia.

Here’s what a responsible government would do instead:

• Equalise capital gains tax with income tax.

• Tax the profits from wealth at the same rate we tax work.

• Close the tax loopholes that let property and inheritance pass untaxed across generations.

• Stop pretending you can fix broken systems without taxing those who’ve benefitted from the breakage.

These measures don’t just fund investment – they re-balance fairness.

They address the deep anger in British society that the rich get richer while everyone else picks up the bill — whether through higher prices, longer waits, or crumbling infrastructure.

What’s missing from the Labour plan? Vision.

You can’t solve a national crisis with a fiscal rule. You need a vision of what public services are for.

Right now, Starmer and Reeves offer none.

They speak the language of business confidence, “hard choices”, and “restraint”.

But what the country needs is:

• A national rebuilding plan, starting with energy, water, transport and healthcare.

• Strategic public ownership of essential services — not for ideology, but because profit extraction is wrecking basic infrastructure.

• A green transition owned by the public, so the benefits aren’t just privatised again.

This isn’t about radicalism for its own sake.

It’s about solving problems that incrementalism has created and can’t fix.

The sticking-point: how to sell it

Critics will say: this scares off the markets. It punishes investors. It’s unaffordable.

The response is simple: nothing is scarier to markets — or the public — than managed decline.

If you want to bring energy prices down, secure water infrastructure, and deliver a functioning health system, you need long-term planning and stable institutions — not profiteering and patchwork contracts.

Investors lose less from nationalisation than from collapse.

The public loses far more from stagnation than from fairness.

And powerful interests can be won over — if they believe the future will be better, greener, and more stable than the volatile mess they currently have to navigate.

One hour before the Review

This piece goes out before Rachel Reeves delivers her first major spending review.

Wren-Lewis suggests she could still surprise us — that she might incrementally move toward something bolder.

She won’t.

Labour isn’t preparing to rebuild. It’s preparing to tread water.

We can’t afford that – and the public knows it.

So the real debate isn’t about what Labour will do — it’s about what we should demand, and how to build the pressure to make it possible.

Today’s economic orthodoxy is tomorrow’s failed government.

Let’s write the alternative while there’s still time.

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