Keir Starmer started in 2020 by offering “Corbynism in a suit”. Then, after election victory last year, he led a soft leftish but often directionless government. Now he heads an administration that is “more Tory than the Tories” and taking a “chainsaw” to the state.
Such is the popular media narrative about the Prime Minister. Downing Street, perhaps unsurprisingly, suggests the reality is more complex. “Ridiculous and wrong, we have never called it that,” is how one No 10 aide responds to “project chainsaw”, the nickname given to plans drawn up by the Labour Together think tank.
Rather than dismantling the state – in the manner of Elon Musk or the Argentine president Javier Milei – Starmer aims to give it a “new lease of life” by abolishing quangos such as NHS England. “I believe in the power of government,” he declared in his speech last week, having introduced or passed bills to expand workers’ and renters’ rights, take the railways back into public ownership and establish GB Energy.
But as he grows in confidence on the international and domestic stage, Starmer faces increasing internal resistance. Cabinet ministers, including Angela Rayner, Yvette Cooper, Ed Miliband, Shabana Mahmood and Lucy Powell, used last week’s meeting to protest against planned spending cuts (departments have been asked to model real-terms reductions of up to 11 per cent). Labour MPs are threatening the biggest revolt of Starmer’s premiership over reforms to health and disability benefits that some deem immoral.
And a wider question looms: how will a government intent on “a decade of national renewal” win re-election? Psephologists liken the broad but shallow coalition that elected Starmer last year to a Jenga tower or a sandcastle – one easily toppled. Private polling circulated by the “Unite the Right” campaign – which is discussing Reform-Conservative strategy – shows that a third of 2024 Labour supporters would consider voting Liberal Democrat or Green. Critics argue that recent decisions, such as cutting welfare, backing a third runway at Heathrow airport and reducing foreign aid by 40 per cent (to fund higher defence spending), risk unravelling the party’s delicate coalition.
In an era of electoral volatility, Starmer and his chief of staff Morgan McSweeney, who oversaw the party’s 2024 campaign, take this challenge seriously. But No 10 insists it has a plan – both for delivery and for re-election.
The cost of living – the issue that did so much to destroy the Conservatives’ economic credibility – is still identified as voters’ number-one priority. This, Starmer’s allies say, is precisely why the government is ignoring appeals – including from within the cabinet – to tax or borrow more. They see no evidence of a “large group of voters” willing to pay higher taxes or higher interest rates to fund an unreformed state.
As I first reported at the start of this month, Rachel Reeves does not regard Germany’s “war Keynesianism” as a model for the UK. While Germany has a national debt of just 62.4 per cent of GDP, Britain’s stands at 95.3 per cent. And Berlin’s €500bn fiscal expansion has had consequences – German borrowing costs rose by the highest amount since the fall of the Berlin Wall in 1989. Defending her fiscal plans at last week’s cabinet, Reeves pointed out that a similar rise in the UK would have increased debt interest costs by £4bn a year.
Whether Labour will tax or borrow more as a last resort, remains an open question. Without action, insiders warn, Starmer will soon lead an “austerity government”. In response, Treasury sources say they do not intend to write future Budgets now (next Wednesday’s Spring Statement will not be a full “fiscal event”). And having already increased taxes by £41bn and spending by £70bn – taking the UK far closer to social-democratic Europe – Reeves is determined to avoid higher taxes and borrowing being Labour’s first resort (cuts, notably, will allow the Chancellor to later argue that she has exhausted alternatives).
The NHS is identified by No 10 as voters’ other main priority – one of the reasons it received the most generous settlement in last year’s Budget (£22.6bn). But the flipside of this is the reform announced by Starmer and Wes Streeting – the abolition of NHS England, a radical attempt to ensure resources are not squandered on a broken system. For voters, Labour strategists emphasise, the ends are more important than the means. “If people are better off and able to see a doctor then we will go a long way to winning the next election,” one told me.
They reject the charge that green voters have been abandoned, pointing to the enduring commitment to deliver a clean power system by 2030 and the establishment of GB Energy. And they maintain that welfare reform is far less divisive among the public than some suggest. “The vast majority of voters will not be content with record numbers of young people being written off or an ever-rising welfare bill.” (New polling by YouGov shows that 68 per cent of the public believe the benefits system works badly and needs reform, while only 18 per cent believe it does not.)
Perhaps more than most recent prime ministers, Starmer is unconcerned by recurrent debate over his ideological trajectory. Those who know him well say he has a relentless focus on “what works”. He is prepared to embrace policies associated with both the left and the right – recognising that most voters do not view the world through this lens. Strategists point out that he has defied sceptics before – those who warned that accepting Boris Johnson’s Brexit deal in 2020 would deny him victory or who argued that Labour could not simultaneously regain support in England and Scotland.
But as Starmer strains the loyalty of both his cabinet and the wider party, a Prime Minister often portrayed as cautious is taking a great gamble. Should he fail, there will be no shortage of foes poised to take advantage. Should he succeed, he could yet secure what Johnson only dreamed of: a decade in power.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: Keir Starmer’s righteous war against the Blob]
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