Sir Keir Starmer is rapidly losing his authority

The first birthday of Britain’s Labour government on July 4th will be a miserable, cakeless affair. The party’s polling is dreadful, trailing Reform uk, an insurgency from the right led by Nigel Farage. Promises to cut hospital waiting-lists, build more houses and stop migrant boats are off-track. And on July 1st Sir Keir Starmer was humiliated by a huge rebellion, as Labour mps gutted a bill to cut sickness and disability benefits. In Parliament the next day his chancellor wept and yields on Britain’s debt soared. The prime minister has never looked weaker.

Labour came to power hoping to be a beacon for European and American centrists beset by populist merchants of division and chaos like Mr Farage. Sir Keir boasted that he would attack Britain’s structural crises by combining a technocratic cabinet with a mighty parliamentary majority. In place of Conservative gimmicks, he would engineer deep reforms. Growth would return, public services would stir and Britons’ faith in the political system would be restored.

The first birthday of Britain’s Labour government on July 4th will be a miserable, cakeless affair. The party’s polling is dreadful, trailing Reform uk, an insurgency from the right led by Nigel Farage. Promises to cut hospital waiting-lists, build more houses and stop migrant boats are off-track. And on July 1st Sir Keir Starmer was humiliated by a huge rebellion, as Labour mps gutted a bill to cut sickness and disability benefits. In Parliament the next day his chancellor wept and yields on Britain’s debt soared. The prime minister has never looked weaker.

Labour came to power hoping to be a beacon for European and American centrists beset by populist merchants of division and chaos like Mr Farage. Sir Keir boasted that he would attack Britain’s structural crises by combining a technocratic cabinet with a mighty parliamentary majority. In place of Conservative gimmicks, he would engineer deep reforms. Growth would return, public services would stir and Britons’ faith in the political system would be restored.

This week’s rebellion shows how Sir Keir has failed. True, Britain is more stable than when the Tories culled several prime ministers in a bloodfest to rival “Squid Game”. Yet even as Sir Keir has shepherded Britain back into the European fold, nannied President Donald Trump and backed Ukraine and nato, the crisis at home has only deepened.

Britain is stuck in its longest period of economic stagnation since the 1930s. The public finances do not add up. The cost of servicing debt as a share of gdp is the highest since 1987. In the 1980s only 12% of voters thought the prime minister would put party before country; today only 12% expect Labour to put country first. On election morning Sir Keir called trust in government “the battle that defines our age”; under Labour, trust is at a 40-year low.

One error has been for Sir Keir to court political pain for little gain, as the welfare debacle shows. Britain is suffering a steeper rise in benefits than other Western countries, owing partly to a surge in young claimants citing poor mental health. Labour should have dealt with the fundamental causes and managed the politics by offsetting cuts in one area of welfare with gains in another. Instead, the reforms were a cosmetic measure to flatter the public finances by trimming just £5.5bn ($7.5bn) of annual savings from an expected total of £66bn by 2030. Even that progress has been undone by the rebellion.

Across government, Sir Keir tweaks systems that need reinvention and shores up institutions that should be demolished. Labour’s reforms to the planning code, Brexit, the National Health Service, Whitehall and taxation are all too timid. As a result, the government has blown its stock of political capital on measures that are often sensible, frequently unpopular, but invariably too small, shallow and slow to make a difference.

Another of Sir Keir’s errors has been to shy away from making the big argument. The case for reforming welfare should come naturally to a leader who has preached blue-collar values of hard graft and minding the pennies. But the former star barrister instead fell back on the weak, contingent case that his hands are forced by the public finances—only then to destroy his credibility by backing down. Having run a “small target” election campaign that included as few details as possible, Sir Keir has never sought to tell voters why he wants power—at least not beyond saying that it should help him be re-elected.

And a last disappointment has been his failure to equip Labour to grapple with the mood in the country. Britons know that their economy is stagnant, but they also balk at attempts to fix it. They tell pollsters they want higher spending, but oppose higher taxes. They want lower welfare bills in general, but oppose benefit cuts in particular. Naturally, Kemi Badenoch, the Conservative leader, and Mr Farage play into this, with talk of a smaller, leaner state even as they line up to oppose cuts to goodies that voters treasure.

Labour mps were elected to resolve these contradictions. Under Sir Keir, they have been unwilling to confront their voters. Twice mps have shown they will not control spending—first by protesting against a cut to heating subsidies, and then by rebelling on welfare. Labour’s supposed “iron grip” on the public finances is feeble. Many mps talk about loosening the fiscal rules again, so as to borrow even more. They have learned the wrong lessons from Liz Truss, whose 49 days as prime minister in 2022 tanked the bond market. The conclusion should not be just that Ms Truss was a fool, but also that Britain, a country with high debt, weak growth and borrowing costs above the g7 average, will struggle to retain the faith of its creditors.

In theory, one year is too soon to write off Sir Keir. Even Sir Tony Blair in his pomp was dealt a bloody nose by backbenchers over welfare reform. The prime minister could yet confront his mps with the hard truth that, without a transformation in Britain’s growth prospects, the social democracy to which they aspire is a mirage. Britain is lucky that the solutions to many of its problems could be fixed by Parliament: deeper welfare reform; a predictable, rules-based planning system; a new property-tax and vatregime; and visas geared to productive newcomers. Such a course would bring growth and help refute Mr Farage’s argument that the old parties are inert in the face of decline.

That sinking feeling

More probably, Sir Keir will sink further. His government appears to have lost confidence among investors, and his chancellor’s credibility has vaporised: it is unclear how long she will survive in office. After this week, the prime minister will struggle to enforce discipline in Parliament. Rather than try to pass ambitious legislation, he is more likely to try to soothe irate mps and buy off his base with a thin smear of jam today.

A Labour Party that chooses popularity over hard reforms will end up with neither. Deeper crisis could shake Britain out of its stupor, but if the malaise continues it may well be Mr Farage who rides to power promising change. That should be Labour’s warning to centrists everywhere. 

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