Britain’s general election is set to be held this year, and given his dire polling, there is speculation Prime Minister Rishi Sunak could be rolled by his party before he even pulls the campaign trigger.

Labour is sitting pretty, with leader Keir Starmer near certain to inherit the keys to 10 Downing Street. So what can we expect from a Starmer government in office?

After initially promising party members he’d maintain much of previous leader Jeremy Corbyn’s anti-austerity manifesto, Starmer pivoted upon winning the leadership, ruthlessly quashing the left’s influence, asserting his faction’s dominance and crab-walking away from various progressive commitments.

Some on the left are despairing. Guardian columnist Owen Jones, for instance, publicly ripped up his Labour membership last week after 21 years of begrudging loyalty. His decision was reached, he wrote, after “a gradual, painful process of realising the party won’t even do the bare minimum to improve people’s lives, or to tackle the crises that have led Britain to catastrophe; and that it will, in fact, wage war on anyone who wants to do either”.

Concurrently, many pounced on reports that shadow chancellor Rachel Reeves was due to liken herself to Margaret Thatcher in a lecture to business executives. But the actual speech was hardly a homage to the Iron Lady, nor even her Labour progeny Tony Blair.

Indeed, Reeves repudiated Britain’s neoliberal experiments, both under the Conservatives and Labour. But she didn’t articulate a rediscovery of postwar social democracy, nor Corbyn’s left populism. Her vision, rather, borrows elements from her Anglosphere counterparts in Jim Chalmers and Janet Yellen, with a dash of colloquial British pessimism.

It is as instructive a blueprint of how Starmer’s cabinet will govern as we’re likely to see before election day.

Neoliberalism goes…

In some ways, Reeves’ speech seemed more geared toward Labour’s union backers than the business community. Despite unreconstructed Blairite Lord Peter Mandelson urging her to water down Labour’s commitment to industrial relations reforms, Reeves stood firm on her New Deal for Working People. It includes abolishing zero-hour contracts and guaranteeing all workers full rights from day one, including protection from unfair dismissal, sick pay and parental leave.

She also articulated a more active role for government in the economy, including via industry policy and (limited) public ownership. Labour’s plans include a National Wealth Fund, a publicly owned Great British Energy company, and the re-nationalisation of railways as private contracts expire.

The only similarity with Thatcher was a desire to refashion a flaccid economic stasis into something more virile. In substance, it sounded more like Bidenomics.

…But austerity stays?

But here’s the catch — Reeves also committed to strict fiscal rules imposed by current Chancellor Jeremy Hunt, which seek to balance the Treasury’s chequebooks. As the New Statesman’s Freddie Hayward wrote, “The decision piles pressure on Labour to deliver immediate economic growth. This is because [absent such growth] the spending cuts the government’s fiscal rules imply are brutal.”

The Guardian’s Will Hutton noted Reeves hadn’t technically signed up to all of the government’s rules –she would only aim to balance “day to day” spending and revenues, cordoning off certain public investments.

Nonetheless, agreeing to cut national debt within five years already appears to be constraining Labour’s spending commitments. Reeves recently dropped the party’s flagship £28bn green energy plan, instead promising to unlock billions in private investment.

James Meadway, an economist and former adviser to Corbyn’s shadow chancellor John McDonnell, thus depicted Reeve’s vision as ditching neoliberalism but keeping austerity. The government would impose costs on companies (higher wages) and coax them to invest in desirable areas like renewables, but wouldn’t spend too much itself.

More pessimistically, author Keir Milburn wrote that “the emerging Reeves agenda looks like social democracy for capital (industrial policy) and austerity for the rest of us”. Others dubbed it “Bidenomics without the money”.

More Albanese than Thatcher

This will all sound familiar to Australians. Anthony Albanese’s government has also prosecuted industrial relations reforms and sought to steer private investment to green technologies. It’s even modestly expanded certain social programs like childcare, while Reeves and Starmer have promised only the most urgent repairs of forlorn institutions like the National Health Service.

But amid heightened inflation and a pending revenue shortfall, both Labo(u)r parties are frugally counting their pennies. Absent Biden’s greater leeway with debt finance, neither party is brave enough to embark on tax reform to finance much-needed social spending… yet.

But for parties whose raison d’etre is expanding social well-being, not managing decline, a reckoning is nigh. As our societies age and the climate warms, spending pressures will only rise. If Chalmers leads, Reeves just might follow. Just as Australian Labor inspired British Labour’s small government turn, it ought to lead the way out.