After a stormy week in Westminster, the clouds parted and, barring the small matter of a by-election, Andy Burnham seems set to become prime minister.
The Mayor of Greater Manchester commands support among all wings of the Parliamentary Labour Party – from the hard-left Campaign Group to natural allies of Wes Streeting on the right; who concluded letting him run for leader risked putting in Ed Miliband or Angela Rayner.
Among some Keir Starmer loyalists, there is a conviction that Reform will derail the Burnham bandwagon in the Makerfield by-election. They may be right. But this is Andy’s backyard – and pollsters who have made the trip to the North West have long predicted that the local hero can triumph on home turf.
Despite the drama of recent days, choosing a new leader is, however, the easy bit. The harder question is the one posed by Wes Streeting when he confronted Starmer over the world’s quickest coffee last week: how will you get us out of this mess? And for Labour, there is also the question of whether the party wants to, or can, be led?
On projections poured over by former colleagues during my time in 10 Downing Street, pensioners are the only group who will be better off by the end of this Parliament. That should strike fear in the heart of anyone presuming to lead the country. After almost two decades of stagnating or declining living standards, the public’s patience is understandably wearing thin.
Complaining about the state the last lot left the country in worked for David Cameron and George Osborne, but not for Labour, even though the inheritance – crippled public finances and services – was so much worse. And thanks to the US-Israeli war with Iran, we are in a “Road Runner” cost of living moment – we have gone off the cliff, but gravity has not yet kicked in.
Labour has yet to solve the riddle of how the party governs when there is no money. Tony Blair and Gordon Brown used tax credits to redistribute money to their natural supporters, funded from the brimming coffers which also paid for new schools and restored the NHS to a source of national pride.Under the Conservative and Liberal Democrat coalition, income tax thresholds were hiked, with much of the benefit going to their middle class supporters.
This Government has lacked a plan to put money directly into the pockets of the “hero voters” identified by Morgan McSweeney – older, working-class and currently Reform-sympathetic. One advantage of being so unpopular is that it should give you permission to do bold things, with hope you will be rewarded at the next general election.
Secretary of State for Work and Pensions Pat McFadden’s plan to get young people into jobs is vital, but pro-employment policies should not be confined to so-called NEETs. As Labour’s election manifesto said: rebuilding Britain will take the skills and talents of the whole country.
Labour has talked a great game on using AI to transform public services, but, in contrast to the dizzying advances in the other sectors, progress has been glacial. The Treasury badly needs tax receipts, not least to fund promises already made on investment in defence and help with people’s energy bills.
Yet, we are still awaiting the outcome of the “quasi-judicial process” on drilling in existing oil fields that Starmer stood so firmly behind in a clash with Kemi Badenoch at Prime Minister’s Questions. Meanwhile, Norway runs on more than 90 per cent renewable energy, but unashamedly taps its North Sea reserves.
Wes Streeting did the honourable thing by sticking to his word and not triggering a leadership contest. But the broad contest and “battle of ideas” proposed in his resignation letter is very unlikely to help the Government. Instead, it could make things far, far worse.
Just look at the policy platform that got Starmer elected leader. It included a pledge to nationalise not just rail, but mail, energy and water – the last of which would cost tens of billions alone. And he was not even the left’s candidate.
Starmer had years to unpick these policies and make Labour electable again, while the country was distracted by Covid. To win in a Labour leadership race, any candidate would be tempted to make rash promises that they would now have to immediately follow through on as PM.
Then, there is the question of whether Labour MPs, and the wider party, are ungovernable.Only two Labour leaders, Starmer and Tony Blair, have won power in more than half a century. Both faced MPs determined to bring them both down.
The current crop held their noses, and their nerve, until last May’s election losses. Then they rose up and scuppered the Government’s welfare reforms. Since then, MPs have refused to take yes for an answer, seeking to topple Starmer despite getting their way on everything from the recognition of Palestine and scrapping the two child benefit cap, to reversing farm taxes.
The extent of the problem has been shown by Labour MPs, who accused the Government of “appeasing” voters over immigration and suggested the bond markets will have to “fall into line”.
The same set of problems Keir Starmer has faced would confront any new Prime Minister. How can you reconcile the irresistible force of the Parliament Labour Party and voters’ demands with the immovable object of the bond markets? It will take huge skill, judgement and luck to avoid getting crushed.
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