Whoever picked D-Ream’s Things Can Only Get Better for Tony Blair’s 1997 election campaign soundtrack, deserves a medal. Even now, the early days of New Labour embody a spirit of optimism and renewal encapsulated in that song. With Barack Obama, it was a chant that captured the mood. Yes. We. Can.
Keir Starmer and Rachel Reeves are beating a very different drum. The UK is a busted flush. It’s broken and will take years to fix. It’s going to get worse before it gets better.
Whether these things are true or not, should a leader say them?
One of the strongest tools in the leadership box is the ability to spread hope and belief about the future. It does more than earn support. As any successful turnaround leader will tell you, it motivates people, and unites them around a shared purpose.
On an economic level, optimism from the top gives people confidence to spend and invest. It can make the economy grow faster, and if it’s absent it can have the reverse effect — indeed, the negative messaging about the UK’s fiscal situation coming from Downing Street has directly led at least one economic model, from Oxford Economics, to cut its GDP growth forecast by 0.2% for 2025.
That growth forecast was for 2% next year. Inflation has fallen to its target level, consumer spending is recovering and interest rates are falling slowly but steadily. The indicators are quite good. So why would Starmer et al. play the UK down?
The limits of optimism
Belief cannot be grounded in fantasy. Insisting you have the best engineers or marketeers in the world or that you’ll grow 50% next year doesn’t make it true. The money will not ‘just come from somewhere’, as your finance director will no doubt remind you.
Leaders therefore need to ground optimism in realism, which is easy to say but in practice often hard to get right. You can’t just swing between the two depending on your mood: it has to be consistent.
CEOs incidentally have a somewhat harder job than Prime Ministers in this respect — their daily actions and interactions with colleagues at all levels will signal their true sentiment far more than a town hall speech or all-company email; politicians’ communications are more scrutinised but also more stage-managed than is possible in a business.
The need to balance optimism with realism consistently doesn’t mean things can’t change, however.
It’s the narrative, stupid
Like any leaders embarking on a long-term transformation, Starmer and Reeves are telling a story, with a beginning, middle and end.
We’re in the beginning now, which is all about the mountain we have to climb and the treasures that await at the summit. Things are broken, more than we ever thought. Fixing society and the economy will take years, full of hard choices and sacrifice, but it’s vital for us to have a decent future.
When we hit the middle, you’ll start to hear more about how things are improving thanks to everyone’s hard work and willingness to suffer, but not too much. There’s still a long way to go, they’ll remind us, knowing that progress could be undone by just giving people a tax break as soon as they can afford it.
The end is when, they hope, people will start to see a real improvement and thank the government. That may be wishful thinking, ironically – governments take far too much blame when the economy does badly, but far too little credit when it does well – but the narrative is the right one for a leader in a turnaround.
It won’t be easy to pull it off, not least because events may change the story as we go along, and there will be numerous counter-narratives that tell it very differently.
Pacing is important too. If Starmer cranks up the optimism too soon, it will jar with the previous gloomy messages and people will stop believing him. But if he talks down the UK for too long, the mountain will seem too big, and the summit too far.
That’s why I’d like to see more hope for the UK coming from its political leaders, even at this early stage, reminding everyone that there is great potential and untapped opportunity, and that we’re building a future rather than just cleaning up a mess.
In the meantime, businesses can start to show their own grounded optimism by their actions: the striving for growth, the internal positivity, the investment in people and capital projects, regardless of what’s said in Downing Street.
