The pollsters basically called the election correctly, Labour got a thumping great majority while the Conservatives got a great thumping! Although the Labour lead was less than the polls suggested, a low turnout indicated a general lack of enthusiasm, voters were more interested in getting rid of the Conservatives than electing Labour.
A third of the votes on a turnout of under 60% meant that a fifth of the electorate put Starmer into No. 10 but, other than the usual suspects, few complained.
A modest increase in turnout with voters determined to get rid of Labour could make the majority disappear like the will o’ the wisp so a sensible strategy would be to win over those who didn’t support them. Labour, however, seem determined to alienate as many as possible and, unsurprisingly, both their and Starmer’s poll ratings have fallen.
There are a number of reasons for this, starting with Starmer.
In 2020 Labour were in the same mess as 1983. Kinnock dumped Foot’s policies, purged Militant and, despite trying twice, failed to win an election, probably not helped by the number of policy reversals. Had he lived Smith would have reaped the benefits, Blair certainly did.
Starmer is basically a technocratic middle manager who decorbynised Labour but attracted criticism for dumping the Corbynite policies he’d previously endorsed. Many expected him to emulate Kinnock by doing the necessary dirty work, losing an election and being replaced.
Covid was Johnson’s downfall, without it Cummings wouldn’t have gone to Barnard Castle and there would have been no Partygate. Three PMs in almost as many months in 2022 broke the Conservative brand and Sunak was, like Major after 1992’s Black Wednesday, unable to stop the ship sinking and the path to No. 10 was open for Starmer.
Starmer, like Sunak as his 2023 conference speech showed, hasn’t got an overall vision, a philosophy – and if he had he couldn’t articulate it. Few would object to cutting crime, NHS waiting lists, etc but without something more fundamental he’ll never be a visionary CEO.
It’s clear that he learnt the wrong lessons from his ascent. Dumping Corbynism, although criticised, was essential but he seems to believe that digging his heels in and doubling down is the way to prosper.
Most governments have some poorly thought out policies, the polls turn against them, so they modify or even drop them, and recover. Successful leaders know which battles to fight, Thatcher was for turning!
As DPP Starmer had professionals working for him, all with the appropriate qualifications and having been thoroughly checked. As PM he has a motley crew who joined Labour, were selected and then got most votes.
Ironically there are some good ideas, there’s nothing wrong with targeting a benefit at the poor or seeking to reduce tax avoidance, but the prevalence of identity politics means that pensioners are seen as rich Tories and farmers as rich, fox hunting Tories.
The arguments against means testing are:
the cost of administration
how many fall through the cracks
No impact assessment was undertaken on means testing the Winter Fuel Payment, although it was later concluded that 100,000 pensioners may be forced into relative policy.
This is supposed to raise c. £1.5bn, but reduces as the take up of Pension Credit increases, possibly to nothing.
Is the aim to target the benefit or save money? Considering that the government awarded large, no-strings, public sector pay rises an obvious conclusion is that pensioners’ pockets are being picked to pay off the public sector.
It would be better to tax the payment, although the rich might not lose it all the poor would keep it all. Other than Starmer believing that intransigence is good it’s difficult to see why they’d take so much pain for so little gain.
The Family Farm Tax, predicted to raise c. £500m, is another unnecessary mess. In agriculture the return on capital can be low, a farm worth millions might have an income in the tens of thousands. Even with ten years to pay, inheritance tax of 20% is unaffordable so part of the farm would have to be sold.
Accountants regularly send out briefings, particularly after “fiscal events”, a short email exchange would quickly establish whether a particular farm is liable and then emails start arriving at the National Farmers Union. Considerably more farms are liable than the government claims.
There has been some corporate abuse of the inheritance tax exemption but considering how much the government spends each year it’s not even a rounding error. A better solution would be to find a way of targeting corporates not family farms, and simply increasing the threshold would remove many.
Once again it’s continual negative headlines and protests, including targeting rural Labour constituencies, will continue in 2025.
There are hills to die on, but not these!
There were pre-election warnings that neither of the major parties’ plans really added up and both boxed themselves in by pledging not to raise income tax, national insurance or VAT. Every incoming government claims their predecessors left a mess – although Labour carefully avoid mentioning Covid or the Russian invasion of Ukraine! – but whether, or not, there was a £22bn black hole is less important than which narrative prevails.
Labour on growth is reminiscent of foreigners singing English songs, they know the words but do they know what they mean?
There’s a distinct lack of knowledge of business, it’s a fat Tory goose that can be indefinitely milked for golden eggs. The sophistry to justify raising employer NI, which Reeves previously opposed, might be amusing if the effects weren’t so damaging.
The increase in employer NI, coupled with the lowering of thresholds, extra regulations, more workers’ rights and a significant increase in the minimum wage are ill considered and inflationary. If employing people becomes more bureaucratic and expensive, employment is unlikely to rise, leavers won’t be replaced and the use of technology will increase
Supermarkets make large profits; although they don’t make much on a can of beans they sell massive quantities. Their suppliers’ costs will increase and they’ll pass this on, increasing inflationary pressures, and they’ll also install more self checkouts.
Let’s consider a counterfactual. Before the election inflation had fallen and the economy was growing, not spectacularly but fastest in the G7. It’s reasonable to assume that growth would have continued after a Conservative victory, resulting in increasing tax receipts.
The NHS and train drivers’ disputes would have been settled, but at a lower figure than Labour agreed, and with productivity improvements.
Less would have been spent on things like overseas aid and net zero.
It was planned to shrink the civil service, probably through natural wastage, whereas Labour are growing it.
The extra regulatory burden on business, more workers’ rights, etc wouldn’t have happened.
A Conservative chancellor may well have had to raise more money but it’s easy to see how this would have been somewhat less than Reeves.
This is all about balance, and whether the glass is half full or half empty. Swing the pendulum too far one way and employees are underpaid and exploited, the converse means that business stops investing and creating jobs.
It’s not surprising the economy has flatlined, business is battening down the hatches and trying to reduce costs, i.e., headcount, in anticipation of continued low growth or even recession. This was all predictable and avoidable but the full effects won’t be felt until April.
Reform of the planning system to make housebuilding, etc easier could help growth but Reeves has increased the costs of both labour and materials and it’s uncertain how soon this will happen.
Considering the mood music and direction of travel it’s certainly possible that growth will be elusive and Reeves will either have to raise more taxes or cut spending.
So, what’s in store?
Starmer is likely to come under internal pressure. The law was laid down early with the vote on the two child benefit cap, and lots of newly elected MPs kept their heads down in the hope of getting onto the payroll. Fast forward a few months, the government is polling badly, the economy looks to have stalled, they’re getting aggravation over things like the winter fuel payment and the media is full of negative stories that Starmer, et al can’t close down.
We know there’s opposition to the two child benefit cap but it’s not a running sore like the winter fuel payment, which can be resurrected by the opposition every winter, or the Family Farm Tax. It’s worth noting, as previously outlined, how easy it would be to extinguish these fires as there’s so little money involved.
If the numbers are there Starmer can be told that these have to be sorted out, and if Reeves won’t, she has to go, and if she doesn’t go, he has to. Labour, however, isn’t very good at removing lame duck leaders.
Government by headlines and opinion polls isn’t good, it’s about deciding which battles to fight and when to fight them, something Starmer is conspicuously poor at.
The Conservatives have a new leader in Badenoch, although how, according to lefties, such a hotbed of racism and bigotry could possibly choose a sub-Saharan African woman is a complete mystery!
Although having had some small poll leads – due to government failings – her problems are numerous. Two words sum up why the Conservatives were booted out; trust and competence. Johnson broke the first, Truss the second. They can be combined for things like immigration where despite repeatedly promising to reduce the numbers they actually presided over record figures.
Why she picked a fight over Reform’s membership numbers is another mystery, she also needs to learn which battles to fight.
There’s plenty to attack the government on but when she looks over her shoulder there’s Farage, with a pint in one hand and a cigarette in the other, saying “You had fourteen years”.
It’s not surprising that Reform have the wind in their sails, with a government beset by problems, largely of its own making, and the main opposition party licking its wounds after a historic drubbing, there’s a vacuum.
Every caricature starts with an element of truth and considering the number of “reviews” initiated by the government the “fourteen years” jibe can also be applied to them. Mass immigration started under Labour and increased under the Conservatives, hence the “Uniparty”. Time will tell if the narrative takes hold.
Reform aim to form a government, now have more members than the Conservatives, are establishing a nationwide infrastructure and intend to seriously contest local government elections.
Nothing guarantees success; Corbyn’s Labour was the largest party in western Europe, Harris outspent Trump and it’s not unusual for Westminster governments to be hammered in local elections and still win a general election. Notwithstanding that, a large membership, plenty of money and lots of councillors are worth having!
As we start a new year Labour, Reform and the Conservatives are all polling in the twenties, will any pull away?
Reform are in the ascendancy but there’s a massive amount of work required, and much that could go wrong, before Farage can enter No. 10.
He’s said that half of the Conservative MPs should join Reform, the others the LibDems. First Past The Post (FPTP) means that the major parties are “broad churches” to get the 40%+ usually needed to form a government. Under PR Labour would probably split into Blairite social democrats and Corbynite socialists, and the Conservatives would probably also split. After elections the parties would disappear into a smoke filled room for the sort of horse trading that happens on mainland Europe.
It’s uncertain how far “pure” Faragism can go under FPTP.
Although Farage and Reform are getting the headlines the LibDems are the third party at Westminster having finally shaken off the “coalition blues” with 72 MPs, the Greens have four and north of the border the SNP, although having suffered from self-inflicted wounds, isn’t going away. All will seek to take seats off Labour.
Somewhat of a surprise, although perhaps not in hindsight, was the Muslim Vote, campaigning on the Israel/Palestine conflict, which took four (five if Corbyn is included) seats off Labour and came close in others.
There are currently over a hundred constituencies with Muslim populations exceeding 10% but, again, lots of uncertainties. Are they, like Reform, going to try and establish a local government presence? How important is the “temperature” of the Israel/Palestine conflict?
Trump’s second term is imminent. He won the popular vote, swing states and the Republicans control the House and Senate. It’s probably a working assumption that part or complete control of Congress will be lost in the 2026 mid-terms so the new administration will probably hit the ground running and while de-woking the US will be positive the effects of his economic and foreign policies are uncertain.
Much of Labour despises him which could sour relations and the government is also likely to find itself an outlier as much of the world is moving right.
Many in Labour hoped the government would start 2025 on the front foot but, again, they seem to be on the wrong side over an inquiry into rape/grooming gangs.
In 2025, will Reform’s bubble burst, will Badenoch turn the Conservatives round, what will the effects of Trump be and will the Government stop shooting itself in the foot?
It’s far too soon to start thinking about the next election but, as per the ancient Chinese curse, we’re living in interesting times!
