A few weeks ago, I was with a Labour MP when news broke that mortgage rates had hit 5 per cent (they’re now well past 6 per cent). He looked at me and said, “Well, we’re definitely going to win.” And then he said, “but oh fuck.”
These mixed emotions are commonplace in the party. The worse things get for Rishi Sunak and the country, the greater the chance of a healthy Labour majority at next year’s election, but the more impossible the job of governing looks.
Right now, those mortgage rates are a nightmare for the government: it is polling at 22 per cent approval among those making monthly repayments, compared to 37 per cent for those who own their home outright. A potential recession over the next year would also make it harder to offer the tax cuts that are a key component of their election strategy without looking desperate and disconnected from the country. Meanwhile, NHS waiting lists continue to rise towards 7.5m, with the worst doctors’ strikes yet scheduled to take place as this column lands. The “small boats strategy” is in disarray. Brexit is widely seen as a failure, even by Leave voters.
In less than 18 months’ time, though, all these things will be Labour’s problem, and the party’s strategy of staying studiously quiet on the most difficult questions, while the government trips over every rake in sight, will no longer be available. Labour may benefit from low expectations, and it will be able to use the “we’re clearing up the Tories’ mess” line for a while. The Conservative party is unlikely to look ready for power again any time soon, which will also buy Keir Starmer time. But there is a growing risk that his team are simply overwhelmed by the scale of the problems.
Inevitably, after 13 years of opposition, there is little governing experience on the frontbench. Only two of the shadow cabinet spent any time in the real one last time Labour was in power: Yvette Cooper and Ed Miliband. Tony Blair, of course, had the same issue: few appointees, beyond old-timers like Jack Cunningham and Margaret Beckett, had had any ministerial experience. But he had some time in government to figure it out. He inherited a growing economy, in the middle of the global “NICE” (non-inflationary, consistently expansionary) decade. Britain was also benefiting from the Thatcher-driven arrival of the single market, which boosted the trade value of EU membership.
All this allowed for steady investment in public services and improvements in living standards, even while still operating under Tory spending plans, which they did until 1999. After that, spending was increased by annual amounts that seem fantastical today, while maintaining a lower tax burden than we currently have. It wasn’t until his second term that Blair really figured out what he wanted to do, domestically, and the big reform programmes in health, education and crime began.
Starmer will not have this relatively gentle start (and it’s only gentle retrospectively—it didn’t feel that way to Blair’s team at the time). He will be immediately confronted with a set of brutal choices. Labour will either need to borrow more, tax more or disappoint supporters who expect to see investment in the public sector after over a decade of austerity. It’ll probably be some combination of all three.
Shadow ministers are at pains to stress that improvement is about reform rather than money, but this is an obviously false dichotomy. Meaningful reform programmes, even if they produce long-term savings, require additional upfront investment. Labour’s frontbench know this full well: you can already see the frustration on the faces of those shadowing high-spending departments, desperate to announce substantive plans but unable to commit any money to them. It will be even more frustrating when they’re actually in charge. The 2025 Spending Review—where money is allocated to different parts of the government—is going to be an almighty bunfight, with the press looking to jump on any indication of a split in the cabinet and ministers trying to claw money out of a Treasury that has got used to lording its authority over everyone else.
Starmer will also only have 18 months before the formal review of the Brexit trade deal begins. Again, this will come with high expectations from Labour’s supporters, the vast majority of whom were Remain voters who will want to see steps towards closer alignment. Yet the EU is already playing down that prospect. “Make Brexit work” is a banality in place of a strategy: ultimately Labour will have to engage in the trade-offs that politicians of all parties have been pretending don’t exist for the last seven years, at great cost.
There is a growing risk Labour is overwhelmed by the scale of the nation’s problems
As well as a more benign inheritance, Blair had other advantages over Starmer. Those who were there in the 1990s point out that the party itself was in a stronger place financially, which gave them more capacity in opposition to build critical relationships for government and prepare plans. The network of centre-left thinktanks was also more flush and better able to fund policy development.
Even more importantly, Blair had access to a civil service that retained significant institutional memory and confidence about its role as the permanent part of government. New Labourites, with some justification, found many of the senior mandarins patrician and stuffy, but they knew how government worked. Blair’s first cabinet secretary, Robin Butler, had held senior jobs in Downing Street and the Treasury for 25 years. His successor, Richard Wilson, had been permanent secretary at two departments. Now Starmer is due to inherit Simon Case, who has never run a department and has struggled badly in the job, failing to stand up to Boris Johnson or to defend colleagues who have come under attack from ministers.
Under Case, and his predecessor Mark Sedwill, the morale of senior civil servants has slumped. Many of the most experienced officials, who were being lined up for big jobs at the centre of government or as permanent secretaries, have quit and taken roles in the business or charity sectors. The relationship between ministers and the civil service had been deteriorating since the Blair era, but Brexit turned cracks into a chasm.
As the grand schemes of the Brexiteers have faded away, the hardliners have unfairly taken out their frustrations on officials who have been trying to hold things together in the face of political turmoil. These attacks have widened into a generalised aggression towards an imaginary “blob”. Dominic Cummings may have planned to use withdrawal from the EU as a sledgehammer to knock the sclerotic Whitehall into shape, but it has had the opposite effect of smashing it to pieces.
So Starmer has to cope with a much harder set of problems, and with less infrastructure in place to support him. One suspects that Sue Gray, who would be the most senior former civil servant to enter Downing Street as a political chief of staff, was hired with this lack of institutional memory in mind. But while she was a formidable operator in the Cabinet Office for many years, she has never run a big department. She also has a poor relationship with Case, so one imagines the search for a new cabinet secretary will start quickly.
As if these challenges weren’t enough, Labour has to navigate them in a much tougher media environment than the one Blair faced. Back then, there was a news cycle. Newspapers could be briefed for their edition the following day, while unpredictable events that popped up on the news agenda could be controlled fairly tightly. The pace was quick but manageable. But now, with social media, there is no cycle, just a constant flow of new information putting immense pressures on rapid decision-making, which in turn makes mistakes likelier.
If Labour does fail, the costs for the country could be immense. Not only would it mean ongoing decline in the economy and across the public sector, it may be the breaking point for British politics. The public’s faith in politics is already close to gone: there is little sense of hope, or that any party can get us out of the ditch we’re in. Leave voters who thought they were being promised a new beginning feel betrayed. Remain voters feel like an avoidable disaster has been wrought on them for no purpose. For now, the electorate seem willing to give Starmer and his team one last try. If it doesn’t work out, they may start to look to the array of populist parties waiting on the fringes. “Oh fuck” indeed.
