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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Many of us, when we are struggling in one part of our jobs, end up retreating to our comfort zone. For some Labour MPs, examining a surreal week in which Downing Street appeared to have declared war on itself, the bizarre attack by “senior aides” (generally believed to have been Morgan McSweeney, Keir Starmer’s chief of staff) on the health secretary, Wes Streeting, was just such a retreat. McSweeney is generally credited with being an adroit campaigner and drawer of dividing lines, but he now appears to be picking opponents from within Starmer’s own government. As far as dividing lines go, “stick with Starmer or the bond market freaks out” is not a bad one, at least on paper.
The persistent problem for this government is the large gap between what works on paper and the real-world effect of its choices and decisions. If this month’s Budget is, in fact, a sensible mixture of broad-based tax rises and reforms to bring the public finances into surplus, then a markets dividing line works. But much of the plan has been thrown into doubt at the eleventh hour as a potential casualty of another one of McSweeney’s dividing lines, this time on avoiding taxes on working people. It is yet another idea that works on paper but dissolves upon contact with reality: all taxes, sooner or later, are paid for by working people.
And what is a good line now may turn out to age badly. Last year’s Budget was full of them — a higher minimum wage, a series of taxes that targeted Britain’s wealthiest residents, tax rises on farmers and money for the NHS paid for by raising employers’ costs. This year’s Budget is taking place against a backdrop of persistent inflation, particularly food inflation, an agricultural sector in acute distress and a construction industry that has slowed to a crawl due to reduced demand from buyers.
The fallout from the attack on Streeting is a lower-stakes demonstration of what happens when “good on paper” meets reality. What was meant to expose Streeting’s supposed deficiencies in any leadership stand-off instead reminded Labour MPs what Streeting can do that Starmer can’t. The health secretary can answer questions fluently and well on television, demonstrates a passing interest in the lives and concerns of his fellow parliamentarians, has a clear political project and keeps his staff under control.
Part of what keeps Starmer in place is a justified anxiety among Labour MPs that another dividing line separating Streeting from Starmer is that the health secretary cannot win a leadership election, given the need to win over party members — a similar concern that also hangs over another would-be candidate, Shabana Mahmood, the home secretary. These are, at least, “good on paper” for Starmer: that what Labour MPs and members might consider an upgrade is not aligned.
But if Labour’s dreadful first year has a theme, it has been that “good on paper” has consistently given way to “appalling in practice”. Attacking Streeting made Starmer’s potential rival stronger, not weaker. Popular measures to load more social obligations on to business and restrict immigration have created a situation where wages are rising and legal immigration is falling, but all the public really cares about is inflation and small boats. An unreformed NHS looks likely to need more money or to slam into more crises. The government has a housing target that no one expects to be met.
All this has left the party — and the country — with a leader who is as unpopular as Rishi Sunak before the 2024 rout.
Why is Labour struggling? Most governments stumble in their first year, because in the UK, where voters tend to stick with the incumbent barring a major shock, they come to power facing some kind of crisis. Tony Blair was the exception, in part because of the extraordinarily good inheritance he received from John Major: struggling public services and a booming economy are in many ways ideal, as you have been handed a problem to solve and the tools to do it. Starmer’s inheritance is more similar to that of Margaret Thatcher and David Cameron, who endured turbulent first years marked by blunders and reversals. But by this stage, both governments had begun to improve, finding their feet and learning the rhythm of government.
Part of the problem is that Thatcher, Cameron and Blair all conducted genuine projects of intellectual renewal and modernisation in opposition. It is revealing in hindsight that the first scandal that Starmer’s government blundered into, over ministers receiving freebies, would not have happened had the Labour party followed the same gifting policy that almost every modern organisation does. While some of Thatcher, Cameron and Blair’s ideas had to be finessed in office, it is easier to learn as you go when your party has some ideas, as opposed to this government, which appears to have none.
So, in their absence, what does this government do? Retreat to its comfort zone, drawing dividing lines and running campaigns. It appears oblivious to the fact that the lines it is drawing are not challenges it can meet in reality, that the campaigns it is running are against its own, and that far from providing the government with much-needed direction, all it does is accelerate the demise of a directionless and paranoid administration. The risk is that its only legacy will be a country where dynamism has been drained from every industry other than grievance.