Labour's reform agenda is over. The rebels are in control

The Herald Scotland

2 days ago

It is one year today since this country elected the Labour Party as the antidote to what had become a chaotic Tory term in office. The idea, which seemed fairly sound at the time, was that Ms Reeves and her Prime Minister, Sir Keir Starmer, were so boringly competent that we could all get on with our lives and not really worry about what was going on at Westminster.
Read more by Andy Maciver
How wrong we were. How many people could honestly make the case for this being a more stable foundation for growth than that which was being provided by Rishi Sunak and Sir Jeremy Hunt, the Tory predecessors in these posts? The money markets certainly do not seem to be convinced of that particular case.
Generally speaking, three things have conspired against Sir Keir and Ms Reeves. The first is that Labour's win 365 days ago was far more slender than its parliamentary majority would suggest. At only a little over one-third of the vote, this was no great endorsement of Labour by the British people. Indeed, fewer people turned out to vote for the party than had done so in 2019, when Jeremy Corbyn was leader. Sir Keir polled over four million votes fewer than Boris Johnson in that election. Indeed, it is fair to say that if it had not been for Nigel Farage's Reform party eating so much of the Tory party's lunch, Sir Keir may not have had a majority at all.
Secondly, Mr Farage has become Sir Keir's worst nightmare. Britain is no different, really, from the other liberal democracies around the world who are being gripped, to one degree or another, by global populism. Trust in the Tories and Labour has effectively evaporated, for perfectly understandable reasons. This country has never recovered from the financial crisis of 20008/2009 in the ways that matter to real people. There has been no meaningful economic growth for over 15 years, and a very meaningful rise in the cost of living in that time. Brits are completely out of hope, and we can hardly blame them for turning to someone who – love him or hate him – talks straight.
Those two characteristics are outside of the direct control of Sir Keir and Ms Reeves, but the third characteristic is not; they have made a rotten job of government during this first year. Indeed, it is hardly a stretch to wonder whether this government is already broken beyond repair, whether Ms Reeves will last the summer, whether Sir Keir will make it to the end of year two, and whether Labour will see out a full term of office.
It is important to Britain that Labour spends time in government. In particular, at times when either we need to tighten our national belt, or when we need to reform our public services, Labour is best placed to do it. The Conservative Party often has the political will to do both, but has long lacked the political permission, particularly when it comes to public service reform. The Labour party normally has the political permission to do both – with the NHS in particular generally considered to be safe in the hands of the party which invented it – but often lacks the political will.
It appeared, on July 4 2024, that much like at the outset of the Blair/Brown era 30 years ago, we had a Labour leadership which had both the permission and the will to rewire the country. A year later, it is in tatters to such a degree that it can most likely never be remade.
This will have consequences.
The Government has spent the year proposing a series of relatively mild welfare reforms, albeit often badly targeted and always badly communicated. We can debate until the cows come home about whether or not Sir Keir emphasised the moral imperative of welfare reform more than Ms Reeves emphasised the financial imperative, but that doesn't matter now.
When I was growing up, we had the working class and the middle class. I never really understood which of those baskets I fell into, and perhaps that was prescient, because they have effectively now been merged. In today's Britain, we have the working class and the welfare class. Not so much haves and have nots, but works and works not.
Can Wes Streeting hold firm? (Image: PA)
What Labour appeared to be attempting to do was to distinguish between those on welfare who needed it, and those who simply wanted it. There are plenty of the former category, and they are the essence of why we all pay tax. Most of us contentedly provide a safety net for those amongst us who cannot provide it for themselves, whether because of age, or illness or disability, or indeed because their genuine attempts to find work have not yet yielded success.
What few, if any, of us consented to, though, was paying for a system which incentivises often young, often able people to seek benefit dependency, from which evidence shows they will likely never recover. International evidence shows us that this is a peculiarly British problem, and a very expensive one at that.
That agenda is now over. What's next? Wes Streeting, the Health Secretary, appeared to be the most reform-minded of the new Cabinet. Ruthlessly honest in opposition about the scale of change needed for a taxpayer-funded health service to survive, the reality of government has hit hard. There have now been two fiscal events, both of which ploughed tens of billions into the NHS black hole, and which Mr Streeting knows as well as anyone is effectively money down the drain.
I would like to think that Mr Streeting will hold firm, but I doubt it. The Labour rebels are in charge now, and the same people who said no to welfare reform will also say no to healthcare reform.
I am predisposed towards optimism, but the outlook for the public finances and the public services is so bleak that I can muster absolutely none.
Andy Maciver is Founding Director of Message Matters, and co-host of the Holyrood Sources podcast