As Labour MPs returned to their constituencies over the weekend to recover and reflect on a torrid week in Westminster, one question dominates their ruminations: will the events of the past few days mark the low point of Keir Starmer’s term in office or were they a warning of worse to come?
Last week Starmer’s authority faced its toughest test yet, and the Prime Minister has not emerged unscathed. The Government’s shambolic handling of its attempt to cut disability benefits, followed by the spectacle of the Chancellor of the Exchequer crying in the Commons, threw up a series of questions about Labour’s competence and cohesion. Many troubled Labour MPs, ministers and advisers see the fiasco as a sign of three main problems blighting Starmer’s Government.
First, the origins of this week’s mess: the Treasury’s decision to use welfare cuts to try to balance the books. For many Labour MPs, this is a sign of an infuriating timidity in the Treasury team when it comes to policy.
Rather than take bold action to reform the tax system and raise money from those most able to afford it, Reeves instead turned to the favoured option of many a former Conservative chancellor needing to stump up some cash: cuts to benefits. In doing so she put the Government on a direct collision course with many of the party’s MPs, members and voters.
Now, according to Downing Street sources, any hopes of scrapping the two-child benefit cap are “dead in the water” due to the extra £5bn now needed to fund the Government’s retreat on welfare.
Labour MPs want the Chancellor to be bolder and more radical as she prepares for the autumn Budget. Options for raising some much-needed revenue include increasing capital gains tax, making permanent the windfall tax on energy giants, changes to pension tax relief and even introducing a wealth tax. Backbenchers may have left Reeves with little choice but to increase taxes as she desperately tries to find some more money: after this week, further attempts to cut welfare spending are all but impossible. MPs are not afraid to rebel again.
Secondly, the past week has highlighted this worsening relationship between the Government and its own MPs. The rebellion over welfare reform was the eruption of a long-running grievance and resentment about how several Labour MPs feel they are treated by the party leadership.
Eager MPs who arrived in Westminster with ambitions of ministerial offices and the trappings of power have instead found themselves wandering forlornly around Parliament waiting to be told how to vote. Some of those elected last year recall being excited to meet the Prime Minister at Downing Street events, only for it to quickly become apparent that Starmer had no idea who they were.
More seasoned hands, overlooked for ministerial jobs, hoped the Government would still draw on their experience; instead, they feel they have been sidelined and shunned. As one senior MP put it: “All people really want is to be treated well and listened to, and they just don’t feel that No 10 is listening to them.”
As the opposition to benefit cuts grew, concerned MPs were called into Downing Street for round-table meetings with senior members of Starmer’s team. Many of them left feeling that their views had been summarily dismissed, leaving them even more determined to stick to their guns. The Government’s charm offensive with rebels was notable for its distinct lack of charm.
Starmer has learnt the hard way that even a significant parliamentary majority is no guarantee of being able to steamroll your plans through the House of Commons. Downing Street has already responded by stepping up its engagement with MPs but it may have come too late. Labour backbenchers have learnt a vital lesson this week: if they just hold firm, eventually the Government will cave.
Still, massaging backbenchers’ bruised egos will be easier than solving the third problem that many in Labour think afflicts the Government: a lack of political foresight and judgement in both Downing Street and the Treasury.
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Much like the attempt to restrict the winter fuel allowance, the Government was unprepared for the level of opposition to its welfare changes. Critics say Starmer and his team spend too much time scrambling to respond to events rather than deal with problems before they arise.
Even when the scale of the backlash over benefit cuts became clear, Downing Street refused to accept the Government was in trouble and was far too slow to act. One Labour insider with knowledge of the discussions says: “The whips were feeding in weeks ago that there was a problem. It was flagged that there was an issue with the numbers and the response was just “plough on”. And that was coming from people very high up in Downing Street.”
Even his allies accept that Keir Starmer is not a political animal; the Prime Minister is still a novice when it comes to manoeuvring the chessboard of Westminster politics. He relies on others for political advice and guidance – guidance that many in his party fear has too often let him down.
His team has struggled to foresee obvious problems, while others have been needlessly created through their own clumsiness. This is particularly true of the Treasury. As the post-mortem into the events of this week continues, more questions are being raised about Starmer’s Chief of Staff, Morgan McSweeney, than about the PM himself.
Where Labour goes from here remains unclear. The debacle over welfare reform was not a one-off but a sign of problems that have blighted the Government’s first year. Labour MPs are restless for change and say they want to see obvious signs of lessons being learned even before they depart for their summer break at the end of July.
But while many would like to see Starmer’s political team beefed up, talk of major Cabinet changes is overblown: despite fevered speculation, few insiders think the Chancellor is going anywhere any time soon.
Starmer enters his second year as Prime Minister with his reputation and authority at its lowest point so far. The question now is whether the events of the past week will prove to be a turning point for his Government or an early milestone on Labour’s path out of power.
Starmer is a man who prides himself on his ability to learn from his mistakes and improve. That skill will now face its toughest test yet.
Ben Kentish presents his LBC show from Monday to Friday at 10pm, and is a former Westminster editor
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