100 days that shook Labour

The government has already squandered the goodwill of voters. Can the Budget revitalise Team Starmer?

For Labour’s friends, these have been miserable weeks. After an election campaign to celebrate, the next 100 days were anything but. There has been no catastrophe, just grubby, embarrassing stories. Policies which have enraged vocal groups from pensioners to investors, a breaking wave of unforgiving media hostility, and above all, a sense of drift at the centre; confusion, hesitation, uncertainty. Political authority rests on faith, so this has been a dangerous autumn.

Keir Starmer is routinely described as ruthless. We see again what that means. It can’t have been easy exiling Sue Gray, given the effort he went to get her as chief of staff in the first place. But putting in Morgan McSweeney, chief strategist during the election campaign, means Starmer now has, by far, the sharpest, cleverest and the most loyal operator in his circle in the top job.

There has been a lot of talk about personal rivalries – though McSweeney never in my experience uttered a syllable against Gray – but what matters now are the political consequences. What differences will the country see?

Gray, a tough operator herself, has reason to feel aggrieved. She became the point of friction between a civil service – which, disorientated by the Tory years, was in a defensive crouch – and a new regime struggling to adapt to government. She wasn’t able, or willing, to give her own briefs to the press, and she had some poisonous briefings against her.

All that said, she seems to have lacked any real feel for politics, or a readiness to confront the Prime Minister with unpleasant truths. One person with close knowledge said of her that although she was efficient, she had a weakness for “telling the boss what he wanted to hear”, and promising others what she could not, in the end, deliver.

But a divided centre is always chaotic. The original idea had been that McSweeney would concentrate on getting Labour re-elected, and Gray would do the “governing” bit. But this was a false separation: if you don’t govern without thinking constantly about your impact on suspicious voters, you don’t win elections.

Unlike Gray, McSweeney isn’t marinated in Whitehall but now has a position of power almost unparalleled in Labour history. Married to the Chancellor’s parliamentary private secretary Imogen Walker, champion of Labour’s new general secretary Hollie Ridley, and with two long-standing allies, Vidhya Alakeson and Jill Cuthbertson as his deputies – so much for the “boys’ club” – he reaches everywhere.

This gives the possibility of a tighter centre than previous British governments have known. But what about the politics, its purpose? I suspect McSweeney will bring a more focused concentration on “working people’s” values. On issues such as pensioners’ winter fuel, he has conservative working-class views on welfare, crime and migration. The same can be said for his cultural caution towards, for instance, outdoor smoking bans and fashionable identity politics.

People in Downing Street in the early days of the Tony Blair government tell me they don’t see the problems of the first 100 days now as anything surprising. From serious tussles inside Whitehall between “team Tony” and civil servants suspicious of them, and rows about money and influence – above all the Bernie Ecclestone affair – it wasn’t so different in 1997. Blair, they point out, successfully regained his sense of balance and initiative.

That’s useful perspective. Still, Starmer has not had the “shield wall” around him his predecessor enjoyed. He has some excellent advisers. But he doesn’t have the pugnacious spear-carriers glaring out in each direction, the men and women who always have his back, and who are in constant debate with the rest of the political world.

Take the freebie stories, which are starting to frame how much of the country sees Starmer. On day one, an Alastair Campbell or Peter Mandelson would have been straight into action, deflecting, diluting and menacing where necessary. That was never pretty. As the then BBC political editor, I was on the receiving end of some of those late-night calls, and I know whereof I speak. Meanwhile, headline-grabbing government announcements would be landing hard to move the news cycle on.

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Now, all this might have worked, or not. My point is: there would have been a fast, determined, defensive operation to protect the leader. In this case, the impression has been of a Prime Minister being left to swing in the wind during crucial, damaging weeks.

Maybe this is simply Starmer’s fault. He is a bit of a loner in politics. He has never much liked Westminster. Taking the gifts was his own choice. But his political support operation has been remarkably slow and ineffective.

So, the appointment of James Lyons to head his new strategic communications team, shaping the news “grid”, is more important than it may seem. Matthew Doyle, the head of communications, seems to have been moved upstairs. Starmer has lacked an experienced political journalist in No 10, one who understands the lobby. Lyons was for many years a key member of the Daily Mirror team before going to the Sunday Times, then the NHS, then TikTok. That’s a big sweep of the modern media scene. He is trusted and liked.

“Comms” matter, because it shapes what the country talks about. The freebies stories knocked aside Starmer’s summit with Ursula von der Leyen, the president of the European Commission, which was intended to reset relations; they also produced an uncertain and downbeat Labour conference, and have made the Tory leadership contest bouncier than the Conservatives had expected. Again, you might say, this is Starmer’s fault. But a strong comms operation would have worked ferociously to turn that around.

Journalists love announcing that this or that is a “final opportunity” or a “last chance”. We are mostly wrong. The news cycle careers on at such dizzying speed that there is mostly another chance. But all that said, Starmer is recasting the core of his government with not a moment to lose, including the appointment for cabinet secretary to come.

Now comes something just as big: the October double. On 14 October, the UK is hosting the International Investment Summit, which is soon followed by the Budget on 30 October. Both offer a rare opportunity for a new start. Inside Downing Street this week, all the talk is of a new beginning.

Let’s go back to basics. This government was elected not just because of the failures of the Tory years, but because it offered a programme of reinvestment and the rebuilding of the public realm, as well as a shift in power and influence to working people.

It needs to re-find that clarity. This month offers its best chance. The Chancellor, Rachel Reeves, is being introduced inside the Treasury, day-in, day-out, to the slipperiness of all official statistics and to its institutional caution. She is trying to turn it from being a department that thinks its job is to write a Budget, acknowledge the reaction, and write the next one – ad infinitum – into a genuine growth department, ready to invest, and understanding the case for investment.

Given the solemn and entrenched self-belief of the Treasury – which has seen off so many bushy-tailed radicals, from George Brown and his short-lived Department for Economic Affairs to Liz Truss and Kwasi Kwarteng – changing its culture will be a lot harder to do than to say.

A Treasury research paper from December 2023, when Jeremy Hunt was chancellor, warns that loosening the fiscal rules by just 1 per cent of GDP “could lead to a peak increase in interest rates” of up to 1.25 per cent. Note the words “could” and “peak” and remember that the Treasury is under new management. But, in part because of the Truss disaster, Reeves will be walking a fine line when it comes to market confidence. Already there are the first quiet murmurs of unease from the bond markets.

At this juncture, let’s return to the big politics. Because these constraints on changing borrowing rules, advertised gleefully on front pages, come alongside all the other explanations of why any increase in any taxes will be completely disastrous for Britain, and will finally obliterate our economy.

This is what we are being told.

If Reeves goes ahead with the non-dom tax changes, she will send the entrepreneurs and investors she so desperately needs fluttering off through the winter skies to Switzerland or Italy. If she sticks with the VAT increase on private schools, hundreds of thousands of whey-faced urchins with only a smattering of Latin will present themselves at the gates of state schools unable to cope. Touch capital gains tax and business won’t come. So much as glance at inheritance tax and family firms will go under.

How much easier Reeves’ life would be had she not promised not to reverse the National Insurance cuts proposed by Hunt. But meanwhile, what so much commentary does not seem to have noticed is that Britain has had a general election and changed its government. This is quite a big deal. A Labour government is not a Conservative government. From the big tech firms to the parents of Etonians, from private equity to the wealth management profession, the world of the modern rich has been working on the assumption that it lives outside time, that nothing can change.

But it can – and it has. For years now, degenerating public services, underpaid workers, from nurses and cleaners to train drivers, and ordinary families unable to pay ordinary bills have been almost excised from the national conversation. The media, owned by the very rich, has – passionately, wittily and rather impressively – represented the very rich.

Now, change is rarely pain-free. There will be disruption, dislocation, loss in some areas, and gain in others. We call this politics.

It is already obvious that Starmer and Reeves will do their best to bring the social and economic changes they have promised without so disrupting the markets that they – we – suffer a net loss. The Business Secretary, Jonathan Reynolds, has been listening to business on the workers’ rights legislation. When it is published, it will be attacked by both some employers and the unions but seems likely to be a reasonable compromise.

Across the board the Chancellor will be making similar balancing adjustments. She needs to accelerate the investment cycle and raise sufficient funds to cover this year’s spending without sending the mysterious gnomes of London back to Zürich. This will be tricky. But the potential prize is enormous.

It does not mean simply “getting Britain building again”, something almost all sides in politics now seem to agree on, but politically, getting the rudder back in the water after weeks of wallow, setting a clear course just when it’s most needed, and reminding us what it’s all for.

Rachel Reeves and Keir Starmer are surrounded by haters, prematurely dismissing their young administration as a failure. In fact, these first 100 days have seen some solid achievements, not least Starmer’s decisive and effective response to the sudden shock of the anti-immigrant riots, and significant summits in Washington and New York. But overall, these have been days that shook Labour most, a brutal reminder that even a huge electoral victory on the back of a modest share of the vote doesn’t give you the right to be liked. There are months and years of very heavy lifting ahead. But these recent weeks have shown that Team Starmer has to do better.

On 12 October, Labour will be out campaigning, marking 100 days in office; activists and MPs may not find their reception on that day entirely friendly. All Budgets matter. But even after the necessary and brutal reshaping in No 10, seldom in Labour Party history has a Budget mattered as much as this one will.

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