How Starmer’s Labour Party went from victory to chaos - The Centre for Independent Studies

In modern British history, a party coming into government has never imploded with the speed of Keir Starmer’s Labour administration.

Elected on July 4, it is now routinely third in the opinion polls, trailing not just the Conservatives but also Reform – the party led by Nigel Farage to fill the vacuum left by a Conservative party that had failed serially to be remotely conservative. That party’s new leader, Kemi Badenoch, wants to change that, and a tussle is underway on the right for disaffected voters: but that it another story.

Labour won last July not because it had a compelling program – it didn’t, and daily it is more apparent it still doesn’t – but because of widespread loathing of the Conservatives. The dishonesty of Boris Johnson and the incompetence of him and Liz Truss, who lasted just 49 days and has a place in history as the shortest-lived British prime minister – propelled voters to dish out severe punishment.

Starmer won a majority of 174, with 411 of the House of Commons’s 650 seats; the Conservatives had just 121, the fewest in their history. However, thanks to the British first-past-the-post system, Labour’s massive haul required just 33.7 per cent of the vote.

The turnout, at just 59.8 per cent, was dismal, reflecting the British public’s attitude to politicians. That meant that Labour won its landslide with the support of barely one-fifth of the total electorate. Most majorities are shallow: the smallest swing at the next election would not merely wipe out Labour’s majority, but most of its MPs.

Nonetheless, Starmer is governing as though he had unequivocal mass endorsement, and appears bemused by the howls of dissatisfaction not just from his political opponents, but from much of the country. He has manifestly failed to tackle what many Britons consider the gravest problem facing their overcrowded country and its overstretched public services – high immigration, both legal and illegal. The other great difficulty is the lack of economic growth, which he and the Chancellor of the Exchequer, Rachel Reeves, have managed to make far worse.

Labour promised not to raise direct taxes: and so far, it has not. However, it raised employers’ National Insurance contributions – a tax on jobs – provoking firms to cut their costs by cutting payroll. BP, the oil company, soon announced 4700 job losses; Sainsbury’s, one of the leading supermarkets, 3000. The haemorrhage continues.

It is not a good look for a party that went through the election talking about standing up for working people to act in a way that ensures there are fewer of them. It has also followed through on shameful proposals made by the Conservatives to remove taxation privileges for non-domiciled residents, thereby driving a large number of rich people, their spending power and their knack of creating wealth in Britain, out of the country.

It also put a value-added tax of 20 per cent on fees at private schools for purely ideological reasons. Already over a dozen schools have announced they will be closing, and more will follow, loading pupils and costs onto an already creaking state school system. It has announced an increase in inheritance tax on family farms, causing outrage in the countryside, and threatening to cause the sale of many such concerns, which could compromise the food supply.

The threat of this tax caused thousands of protesters, accompanied by hundreds of tractors, to snarl up Westminster on Monday. The demonstrators made it clear it won’t be the last time, unless Reeves backs down from a policy they consider ignorant and class-based.

Inflation is starting to rise, and the amount of public borrowing – needed not least to fund pay rises for one of Labour’s most important client groups, highly unionised public sector workers – has driven up bond yields and therefore the cost of borrowing.

Although the Bank of England cut interest rates from 5 per cent to 4.75 per cent last week, it was accompanied by a warning from Andrew Bailey, the governor, that the bank’s growth forecast was being cut too, from an already dismal 1.5 per cent to a paltry 0.75 per cent. This news sent Starmer, Reeves and their comrades into a tailspin, and an emergency summit was convened in Whitehall last Friday to debate what to do about it.

The trouble is that the solution is, for Labour, entirely counter-ideological. Reeves, whose unpopularity is starting to rival that of a COVID super-spreader, is going to have to do one of two things: raise taxes or cut public spending, because Britain is living far beyond its means.

The former risks eliminating growth entirely and suffocating wealth creation. The latter means attacking welfare spending (which hints coming from the Whitehall summit say it plans to do) and state payroll, which would aggrieve millions of Labour’s remaining supporters.

Reeves will be lucky to survive beyond Starmer’s next major reshuffle, while Starmer himself, even though Labour has never deposed a leader in its history, is becoming vulnerable to the hard left within its own coalition.

Even perhaps four years before it happens, Labour’s next election already looks lost.

Image: Kirsty O’Connor / No 10 Downing Street – Prime Minister Sir Keir Starmer arrives at Number 10 Downing St, OGL 3, Link