Without purpose, Labour will remain adrift

Keir Starmer has allowed others to define his government‘s project.

Labour’s first 100 days in office were supposed to mark a return to political stability. The party had been elected with the biggest majority of any government since 1997 (174 seats). After the destructive factionalism that defined the late Conservative years, Labour would “unite our country”, Keir Starmer promised in his first speech as Prime Minister.

In the event, he has failed even to unite the team at 10 Downing Street. On 6 October, after 94 days in office, the Prime Minister dismissed Sue Gray as his chief of staff. It was an inevitable and necessary decision. The Whitehall veteran had lost the confidence of special advisers, who were aggrieved by pay cuts, and failed to provide No 10 with clear direction. Having been tasked with preparations for Labour’s first 100 days, she lacked anything resembling a coherent plan. The media vacuum was filled by rows over government freebies and winter fuel payment cuts. As a consequence, Labour’s popularity plummeted.

Ms Gray’s replacement, Morgan McSweeney, will bring greater strategic focus. As an experienced political operator – he masterminded Mr Starmer’s selection as leader and Labour’s election campaign – he will balance the Prime Minister’s technocratic legalism. But Mr McSweeney alone cannot save this government.

After three troubled months in office, Labour’s problem has become obvious: it lacks an overarching purpose, as we have said from the outset. From this, policy, strategy and communications flow; in its absence, a government is left adrift.

Mr Starmer and Rachel Reeves, the Chancellor, have often suggested that higher economic growth is their ultimate mission. Improved living standards and better funded public services, they say, depend on this.

Yet Labour has lacked a single-minded focus on growth. Rather than expanding the economy, the emphasis has been on the “£22bn black hole” it inherited from the Conservatives. The aim – to toxify the Tories’ reputation – is clear, but at what cost to Labour’s? Business and consumer confidence have plummeted (the former to its lowest level since December 2022). The winter fuel payment cuts, under which pensioners will lose up to £300, have alienated voters and invoked memories of austerity.

In her Labour conference speech last month, Ms Reeves rightly signalled that she is prepared to revise her fiscal rules to enable more borrowing for public investment. But by failing to tell an attractive economic story, the government has deterred the private investment it needs.

Another plausible mission for Mr Starmer is the reconstruction of public services. Fourteen years of Conservative government left schools, hospitals, railways and roads in disrepair. But here Labour is also stumbling. The tax rises planned by Ms Reeves on non-domiciles, private schools and private equity investors are all mired in confusion. Implementation problems mean the Chancellor may be left with even less revenue than hoped.

In essence, the government is restricted by its pledge not to raise the three main taxes: income tax, National Insurance and VAT (which together account for almost two-thirds of revenue). Labour’s aim was to thwart Conservative warnings of a “tax bombshell”. But the government will now struggle to deliver the public service improvements that voters expect. Had Ms Reeves vowed to reverse the Conservatives’ 2p cut in National Insurance – which cost £20bn – her options would be far greater. Despite the overall tax burden nearing a postwar high, the average personal tax rate is now at its lowest since 1975. The government does not lack policy: the King’s Speech contained 40 bills (the highest number since 2005). Planning reform, stronger workers’ rights and tougher water regulation are welcome, but what is the collective project they amount to? By refusing to answer this question, Mr Starmer has allowed others to do so. To his indignation, his “government of service” has been branded a “government of self-service”.

The Prime Minister has defied his detractors before. After Labour’s defeat in the 2021 Hartlepool by-election, he boldly reshaped his team and began the long march towards victory. But to recover once more, Mr Starmer must first accept that his government needs a purpose. Without one, it will remain adrift.

[See also: Morgan McSweeney: the permanent insurgent]