Mariana Mazzucato at the LDN Cop on Saturday

KEIR Starmer’s Labour Party must not make the mistake of repeating austerity if they win power in the next general election, economist Mariana Mazzucato told audiences at London COP on Saturday.

Ms Mazzucato is a professor in economics at University College London who described herself as “trying to do my best to help the Labour Party come up with really sensible economics”.

She joined the New Journal as the headliner for LDNCOP at the London Irish Centre in Camden Town straight from COP28 in Dubai. Ms Mazzucato was there to discuss her book, Mission Economy, which argues governments must take inspiration from the Apollo moon landing – a project that successfully coordinated public and private sectors to land a man on the moon – when tackling the biggest problems of our time, including climate change.

Investment in achieving certain “missions” will protect the environment, improve the lives of citizens and drive economic growth, Ms Mazzucato argues.

Mr Starmer, who is leading in the polls ahead of a likely general election next year, has adopted the language of “missions” to shape his policy programme.

But Ms Mazzucato suggested his aim to achieve the fastest growth in the G7 betrayed a misunderstanding of her core argument. Growth must be a by-product, not the end goal, of government policy, Ms Mazzucato said.

She told the conference: “I’ve been speaking to [the Labour Party], and it’s great that they’re starting to think this way, but if growth is the mission – that’s not understanding.” She said the Labour Party must instead focus on achieving specific targets – for example a “fossil-free welfare state”.

She said: “Social innovation, organisational innovation, also technological innovation will ultimately require investment and training that will help drive… growth.” She contrasted her mission-oriented approach to the haphazard way public money is currently given out to the private sector. “When you don’t have this kind of outcomes orientation, that’s like p***ing in the wind: spread a bit of money there, and then it comes back in your face.”

A focus on achieving specific goals and targets would foster mutual public-private collaboration – instead of the “parasitic [or] predator-prey” relationships that currently characterise the relationship between the public and private sectors.

She said: “Putting climate outcomes… at the centre of how we design our economic system must ultimately have to do with these governance principles: changing how we govern public institutions, changing how we govern private institutions, and how they relate to one another.”

She said a future Labour government needed to set clearly defined, ambitious targets. Ms Mazzucato, who recently worked with Camden Council and its leader Georgia Gould on ideas to tackle inequality, quoted John F. Kennedy on the moon landing: “Kennedy said: ‘We’re doing it because it’s hard, not because it’s easy.’ That means embracing uncertainty, experimentation.”

She said of the Labour Party: “It’s not much harder to be better than the Tories given what they’ve done in the last 10 years, so I do compliment them for having come up with some good ideas in the context of a desert that we’ve had. Just think of all the austerity that we had after the financial crisis.”

But she said new ideas and ways of working were needed in the next parliament.

“It’s very important to realise that austerity failed, so let’s never do that again, because it only killed the social fabric… we need a Labour Party that doesn’t make the mistake of being Tory-lite, of saying: ‘Oh no, we’re not like the Tories, we do climate, but not too much, because we don’t have the money’,” she said.