Two new events, as well as mounting apprehension about the Budget in a month, signal a chilly autumn for Keir Starmer.
The Caerphilly by-election trouncing behind Plaid Cymru and Reform has prompted comparisons with the nadir of Starmer’s opposition leadership, the Hartlepool by-election in 2021, which nearly caused the anxious then-opposition leader to throw in the towel.
Even the Prime Minister admits to being winded by a 27 per cent swing against his party, ruminating: “We need to reflect and regroup and double down on delivery in Wales, and we clearly need to do much more.”
But do more of what, to turn a popularity slump into a stick-with-us mood and buy time to deliver an uptick in national feeling – and see off Reform’s challenge.
This uncertainty dominated an ill-tempered deputy leadership race, which saw Lucy Powell easily beat the education secretary Bridget Phillipson. Powell, ousted as Commons leader in the reshuffle last month, ran a campaign accusing Starmer of running a poor show, which makes repeated “unforced errors” and deploys brittle, top-down techniques which exclude MPs.
That impression of a not-nice insider Labour culture was hardly diminished by an overly flinty campaign from Phillipson, a key Cabinet ally of Starmer, who sounded as if she thought it was temerity on Powell’s part to run at all. So the result went to the underdog. It has unleashed a new volley of euphemistic calls from Powell this weekend for changing “how we are doing things to turn things around” and “boldness in everything we do”.
Powell’s role may be limited in impact, but it does provide a megaphone and it will rally colleagues to share her “constructive criticism” approach to No 10, which in practice turns quickly into turf wars with the bosses.
With a tax-raising, spending-cutting Budget looming in a month, the headache for No 10 (and the Chancellor battened down in No 11) is that the new “boldness” Powell cites may well see Labour as the party of higher taxes, greater protection of benefits and not “out-Reforming Reform”.
The latter point sounds decorous. But it is not clear what that would involve, other than not being as raucous on deportations and identity issues as Farage, while often moving in a similarly stringent direction in practice.
The answer in vogue right now among some Starmer advisers is to rebuild a coalition on the Left, wooing Greens and Lib Dems. But are those who flock to these parties really going to fall into line with an incumbent government which can satisfy only a small slice of their passions and aversions? – And will a distancing from Brexit cut much ice with the voters of Caerphilly (57.6 per cent for Leave in 2016) without a good chunk of these voters getting deja vu about being told they had got it wrong the first time?
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Chancellor Rachel Reeves’ Budget will be the first test of the Government’s ability to bring some clarity to this muddle of signals and hints. The difficulty she faces is that on everything from ditching and then restoring winter fuel allowances to failing to drive through welfare and disability cuts, she looks to be at the mercy of ministerial colleagues and MPs telling her how to tax and spend the country’s resources. Ideally, as Chancellor, it should be the other way round.
The danger of vague formulations like “those with the broadest shoulders” carrying more of the tax burden is that it depends on whose shoulders you are measuring. It gives no clue as to whether this would mean just the very wealthiest, who already contribute large sums in tax and may reduce their income, investments, or spending if they feel too much shoulder-strain.
Some weight would certainly fall on upper-middle-income professionals and higher-earning public sector employees caught in the inevitable marginal tax traps along the way.
If the tax bit is hard, so is the benefits part, where the party is now badly disjointed on what it wants. While Powell speaks for many in her party and beyond in disliking the two-child benefit cap as a remnant of an austere Tory policy which punishes vulnerable children, the £3.6bn cost of a full reversal of the policy (according to the Institute of Fiscal Studies) looks unmanageable.
That pushes the burden of delivering a meaningful change onto the Chancellor, who could exempt from the cap only families where one person is in work, and save the best part of £1bn. Alas, that would not answer the moral challenge to the policy for children in the worst circumstances.
In short, it is getting hard to figure out what Labour wants us to know about its priorities; instead, it is ducking, weaving and course-correcting. When Wes Streeting, the best communicator on a poor bench, says the party needs to take the Caerphilly result “to heart, not just on the chin,” does he mean that a lot of furious voters simply feel poor and want more money spent on their public services?
That puts Labour into targeting handouts in parts of the country in difficult circumstances, which is fine when public finances are OK, but hard to achieve without ending up in a variant of “pork-barrel politics” where the loudest complainants get more funding at the expense of national priorities.
Some of this comes with the turf of running the country when the growth recipe remains foggy. But a lot of it is about sounding like Labour in power has a more focused purpose than distributing a slow-growing pie.
Right now, it’s a cacophony, not a choir. And the dissonance is growing uncomfortably loud for Labour’s leaders.
Anne McElvoy is executive editor at POLITICO and co-host of Politics at Sam and Anne’s
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