Good morning from New Economy Brief.
In early 2023, Keir Starmer promised a mission-driven Labour government. He committed Labour to five missions: get the UK’s economic growth to the highest sustained level in the G7 by the end of Labour’s first term; make Britain a “clean energy superpower” by 2030; improve the NHS by reforming health and care service and reducing health inequality; create safer streets with 13,000 more neighbourhood police and police community support officers; and finally, create more opportunities for all citizens by improving childcare, schools, further education and lifelong learning.
But what does ‘mission-driven’ mean? This week, we explore whether the government has actually grasped the concept of missions, and what this can tell us about what to expect from Starmer’s government.
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What are missions?
‘Mission-driven’ might sound like classic political spin. But in fact, the idea has been percolating (at least in the wonk world) for a number of years. The academic behind the concept is Mariana Mazzucato, an economics professor and Founding Director of University College London’s Institute for Innovation and Public Purpose (IIPP). For Mazzucato, missions are a new way of governing in which everything is geared towards achieving an ambitious goal. She likens them to the ‘moonshot’ programmes of the twentieth century: large-scale efforts to solve problems so big they require the innovation and boldness of both the public and private sectors.
Old wine, new bottles? In a new report, the IIPP warns that mission-driven government could become a case of “old wine in new bottles” if not properly executed, with Mazzucato arguing that improving the NHS and achieving more economic growth should not in themselves be missions. Instead, individual strands or sectors of public policy should be seen as contributors to bigger missions such as tackling the climate crisis. As the report explains, “missions replace sectors as the vertical aspect of industrial strategy.”
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How do Labour’s plans hold up?
Some of Labour’s missions clearly don’t fit the IIPP’s definition, either because they concentrate on one particular sector or because they are, as with the growth, focused on the result rather than the mission itself. But another issue with Labour’s approach is how it plans to work with the private sector. Labour, like the IIPP, sees missions as a partnership between government and the rest of society, including the private sector. But the two approaches differ on how to do this.
Don’t de-risk, share risks. Labour’s flagship National Wealth Fund aims to boost investment (and therefore growth) by ‘crowding-in’ private investment. It seeks to do this by ‘de-risking’ investments (see more about this in our recent New Economy Brief on the subject). Instead, the IIPP argues that missions are inherently risky, because they are ambitious, and that the public and private sectors should share the risks (and rewards) associated with them. What’s more, government should partner with business only on the condition that it works in alignment with its missions. The IIPP offers the example of the CHIPS and Science Act in the US, which puts conditions on access to CHIPS funding, including limiting shareholder buybacks, requiring workforce development plans, mandating commitments to sustainability in construction and operations, and sharing profits.
Rewiring the Treasury brain. To be truly mission-driven, with missions rather than sectors the ‘verticals’ of public policy, the government must be structured accordingly. One infamous issue with current policy-making is the ‘Treasury brain’, whereby the Treasury’s influence over all types of spending restricts investment and innovation. The Institute for Public Policy Research (IPPR)’s Harry Quilter-Pinner has argued that public spending should go through a ‘missions test’ where policies must not only be fiscally responsible, but are also relevant to the government’s missions and make sense in the long term.
Mission boards. One indication that Starmer’s government is taking missions seriously is the commitment to setting up new ‘mission boards’. The IPPR has proposed replacing existing cabinet committee structures with mission councils chaired by the Prime Minister and with senior Treasury attendance.
Putting principles into practice. In a separate report published earlier this year with the Future Governance Forum, Mazzucato set out six principles for making mission-driven government work. Crucially, she argued that making a success of missions was not just about policy design and structure, but also about political will and fostering a sense of togetherness through “strong storytelling”. The words and phrases that pepper the recommendations include “courage”, “tolerance for disagreement” and “bold bets” which hint that, for Mazzucato, missions are as much about an attitude towards decision-making as about the goals themselves. How much the new government has taken this on board remains to be seen.
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What can we expect from mission-driven government?
By nature, missions are ambitious, long-term goals. They are presented as the antithesis to ‘sticking-plaster politics’. Most would agree that this is a good thing, but it also makes quick wins unlikely. Telling voters that things will be better in five or ten years time is a hard sell, and the temptation to return to the sticking plaster will be strong. Furthermore, missions require a different fiscal approach. The IIPP report argues that for missions to work, governments must not “fall into the trap of austerity”, and warns of the temptation to focus “on debt reduction… at the expense of investing in the long-run drivers of investment-led growth”. If done properly, mission-driven government will require a radical shake up of how government operates, how it works with business and how it spends money.
GB Energy partners with Crown Estate. The government launched GB Energy last week, appointed former Siemens boss Jurgen Maier as chair and announced a partnership with the Crown Estate, which owns a £15.5bn portfolio of land and seabed and returns profits to the government. The latter will give the Crown Estate new borrowing powers to enable more investment in green energy projects than the initial capitalisation allowed for.
Moving away from fossil fuels? Commenting on the government’s decision to drop its defence to a legal challenge over the creation of a new coal mine in Whitehaven and reversal of the decision to allow oil drilling in Lincolnshire, Uplift’s Tessa Khan reiterates the importance of ending more exploration and extraction of fossil fuels and praises the new government’s progress towards a faster energy transition, noting: “Together with its commitment to end new exploration licensing, our new government is starting to grasp the urgent imperative to curb new production, as well as the huge opportunities presented by the transition to renewable energy.”
Other ways to raise revenue. Following the Chancellor’s announcement on the public finances, many have speculated that tax rises may be coming in the Budget. Reeves reiterated Labour’s manifesto commitment not to raise income tax, national insurance or VAT, but Tax Justice UK’s Rachael Henry suggests Labour could find more money without breaking their pledge not to raise taxes on working people, because raising taxes on the super-rich could raise plenty.
Change fiscal rules. The Guardian’s Richard Partington suggests that the Chancellor could change her fiscal rules to exclude losses on the Bank’s quantitative easing programme, but argues she should go further and “change rules altogether to enable more borrowing to fix public services and boost investment in productivity-enhancing infrastructure”. Reeves also noted that the Budget (now scheduled for October 30th) will outline specific areas of capital investment to attract more private investment – will these be excluded from the government’s debt rule?
Redefining fiscal responsibility and retooling the OBR. The Invest in Britain campaign's Tom Railton has published an article in Labour List arguing that Labour should use their Budget Responsibility Bill to enshrine a more long-termist view of fiscal sustainability, including by integrating the Office for Budget Responsibility’s (OBR) fiscal risks work more into the Budget process. (Read last week’s New Economy Brief for more on the economic case for reforming the OBR.)
