Latest news with #Uturn
The Independent
04-07-2025
- Business
- The Independent
A year of Keir: It has ended in tears, but here's why he might be doing better than you think
Keir Starmer's first anniversary as prime minister arrives at a very bad moment. He will not be remembered for what he achieved in the past 12 months, but will be overshadowed by a humiliating double U-turn over £5bn of cuts to disability benefits which wiped out any savings from the reforms. It severely dented his authority and left him looking not in control of his rebellious MPs. In a week when he hoped to talk up the government's achievements, Starmer had to try to stabilise the financial markets after Rachel Reeves shed tears sitting next to him at Prime Minister's Questions. Although the chancellor insisted this was due to a 'personal matter,' Starmer's initial failure to guarantee she would stay in her job until the next general election sparked a wobble in the markets. Later he made clear she would remain in her post 'for many years to come' but that did not quell speculation at Westminster that she would not. The anniversary will also be remembered for Starmer's unusually frank admission of his mistakes. He took full responsibility for last week's welfare climbdown, admitting he had been distracted by the G7 and Nato summits. He regretted his controversial speech on immigration in which he unintentionally aped Enoch Powell by saying the UK risks becoming 'an island of strangers'. Remarkably, I'm told Starmer's mea culpa was his own work and not discussed with his closest advisers. This is rare for such an important intervention. All prime ministers need a sounding board; perhaps Starmer lacks one. Some allies insist his two admissions are a refreshing change from the macho politics shaped by Margaret Thatcher's 'there is no alternative' mantra, saying it showed a human side his critics often accuse the seemingly dull, technocratic PM of not displaying. (He and his family were distressed on the day of the immigration speech because his former family home in Kentish Town, London, had just been firebombed). But other Starmer allies were shocked and appalled by his move. 'Insane,' one told me. 'With zero charisma, the one thing he is supposed to be is competent. He admits he didn't read his immigration speech properly before making it. How competent is that?' Downing Street's plan was for the anniversary to mark a change of gear: the government's first year was about 'clearing up the mess' left behind by the Conservatives. Year two is supposed to begin the 'renewal of Britain' and for the public to start to see the difference Labour rule makes. However, the volte-face over welfare was Starmer's third U-turn in a month: he also diluted the ill-fated decision to means-test the pensioners' winter fuel allowance and accepted a national inquiry into the grooming gangs scandal. The U-turns reinforced the image of a prime minister not in control of events. But they were better than ploughing on and making a political problem even worse. Aides make a virtue of Starmer's pragmatism. As one puts it: 'If plan A doesn't work, he will try something else until it does. He is a problem solver. He learns from his mistakes, and is a quick learner.' Critics dispute the latter point, saying No 10 was painfully slow in spotting and ending the row over 'freebies' for Starmer and his ministers. Starmer's U-turns are not the whole story of his first year in office. The bad headlines they inevitably attracted epitomise how a relatively small number of damaging events can drown out real achievements. The media's maxim that bad news trumps good could also have been written for Starmer's government. Even Starmer's critics acknowledge his strong performance on foreign affairs. The most difficult in-tray of any MP since the end of the Second World War has dominated his first 12 months in Downing Street more than he could have expected. Foreign diplomats say Starmer's serious, grown-up approach has mended fences after the instability of the Tory years, especially with EU countries. The PM has confounded critics who warned that hugging Donald Trump close would not work. Starmer aides are adamant the US president did not sideline him over the bombing of Iran, despite appearances to the contrary. The UK secured the best deal of any country on US tariffs, as well as trade agreements with India and the EU. However, there are few votes in foreign affairs and Labour strategists believe the government's fate will be decided on three domestic issues – the economy/living standards, public services and immigration. True, mistakes have been made on the economy. On taking office, Labour was too obsessed with a revenge mission: in 2010, David Cameron and his chancellor George Osborne pinned the blame for the coalition government's austerity measures on the previous Labour government's overspending. Even though the real cause was the global financial crisis, the public bought it and Labour's economic credentials did not recover until Starmer became leader. So Reeves was determined to blame Labour's admittedly rotten fiscal inheritance on the Tories. In doing so, ministers now admit they overdid the gloom, suppressing business and consumer confidence and destroying the optimism and hope that normally greets a new government. Even after Labour's 'loveless landslide', the party should have been able to capitalise on many voters' relief at kicking the Tories out. Reeves's decision on winter fuel, announced three weeks after the election, was designed to show the financial markets that Labour could make 'tough decisions'. But it was very unpopular and became emblematic; voters judged it odd that this was the first thing Labour did. The long gap between the announcement and the chancellor's first Budget in October prolonged Labour's agony. Its honeymoon, always likely to be short, became even shorter. Although the economy grew by 0.7 per cent in the first three months of this year, Reeves's hope that this meant things were 'turning a corner' may prove to have been premature. Most experts have downgraded their growth forecasts for this year. Job and investment prospects were not helped by her £25bn hike in employers' national insurance contributions. Starmer might now find it hard to move Reeves from the Treasury; the markets wobbled on Wednesday because they feared a more left-leaning chancellor would change her fiscal rules to allow higher borrowing. The prime minister and chancellor now face a nightmarish dilemma as they work out how to fill a black hole estimated at between £20bn and £40bn in the Budget this autumn (including the £5bn of lost welfare savings). The markets don't want increased borrowing. Labour MPs clearly don't want spending cuts. The only other avenue – tax rises – is inevitable, but the options are limited by Labour's manifesto pledge not to raise income tax, national insurance for employees, or VAT. While plenty of good things have been done, Labour has often not received much credit – partly because it has not always shouted them from the rooftops. The national minimum wage was raised by 6.7 per cent, boosting the wages of a full-time worker by £1,400 a year. Renters' rights have been enhanced through legislation, including a ban on no-fault evictions. State-funded childcare will increase this autumn, when the first 300 school-based nurseries will open. Half a million more children will be eligible for free school meals from September next year. Reeves's fiscal rules will allow £113bn of investment in building projects. Other pro-growth measures include setting up GB Energy to invest in renewables and a national wealth fund to stimulate private capital. When the history books are written, perhaps the most significant change will prove to have been the new planning rules designed to allow more housebuilding. The target of 1.5 million homes in five years will be hard to hit, but Labour deserves credit for trying. The symbol of public services is the NHS, and in last month's spending review, the government prioritised it with a £29bn-a-year injection. With defence also getting a boost, other departments were squeezed by Reeves's fiscal rule to balance income and spending by 2029-30. 'We have placed a big bet on the NHS,' one Labour MP said. 'We've got to pray it works.' There are some small rays of hope for Labour. It has provided for 4 million more NHS appointments, and waiting lists have fallen by 5 per cent since their September 2023 peak, to 7.39 million. The number of people who think public services are in a bad state has dropped from 68 per cent in October to 55 per cent, according to More in Common. 'Delivery' is seen by Labour strategists as the best way to combat the growing threat from Reform UK. After appearing to ape Nigel Farage's party, Starmer now wants to go head-to-head against him at the next election. 'We have to be the progressives, fighting against the populists of Reform,' he told The Observer. But the government has not yet delivered in one area Nigel Farage is well placed to exploit – illegal migration. The small boats crisis that bedevilled the previous government now haunts Labour, with crossings at a record high. 'It's very visible; we need to do better,' one loyalist MP said. Starmer hopes closer cooperation with France will soon pay dividends. He will need it to. Can Starmer turn things round? After the shambles over welfare and his surprising mea culpa, even some natural allies are starting to doubt it. 'I'm no longer sure he has it in him,' one told me. To succeed, Starmer knows he has to deliver what he promised the country – change – and replicate his success on the international stage in the domestic arena. But his friends play down the idea of a 'big bang' reset or a single big idea. Tom Baldwin, his biographer, told me: 'The classic Starmer way to do this is not with cymbals crashing and a grand vision, but getting on with the job and doing more things in better ways.' I think Starmer will need a stronger team in Downing Street, with more experienced heavy hitters like Jonathan Powell, an undoubted success as his national security adviser. A long-promised economics adviser is required to keep a closer eye on the error-prone Reeves than Starmer has been able or willing to do. A beefed-up policy team is seen by some insiders as necessary. Some think the PM needs more advisers willing to 'speak truth to power' and tell him when the government makes mistakes – or better still, before it makes them. They say he is too reluctant to sack long-time aides who share his worldview. Morgan McSweeney, the chief of staff, has become a lightning rod for criticism of Starmer himself, as he knew he would when the going got tough. 'Part of his job is to be a human shield,' one friend said. McSweeney is in a powerful position. He was the architect of last year's landslide and, as one insider put it: 'Unusually, he chose Starmer to front his campaign to take back the party from the left's control, rather than Starmer choosing him.' Labour figures find it hard to imagine the PM without his longstanding consigliere. But McSweeney might walk out, or a plan mooted this spring for him to return to being a campaign strategist might be revived. McSweeney's detractors concede he has improved the No 10 operation after taking over from the former civil servant Sue Gray, who was forced out only three months after the election. She is blamed for Labour's uncertain start. 'We had a plan to win the election but no plan for government,' one minister admitted. But Gray did ensure that Starmer talked to his ministers and MPs and reached out beyond his trusted advisers; a failure to do that contributed to the welfare rebellion. The PM needs to rebuild relations with his unhappy backbenchers. In mishandling the welfare issue, he blew up his strategy of marginalising the 35 Corbynista MPs, who joined forces with the much bigger soft left contingent to defeat the cuts. Some soft left rebels now want to rally behind Starmer to unite a divided party – but, having tasted power, others will want to wield it in future. Starmer has acknowledged the need for a coherent narrative that sets out what his government is about. 'We haven't always told our story as well as we should,' he told Sky News on the margins of the G7 summit. Although he recoils from 'performative politics', it is his duty to become a better communicator. 'He needs a project, a plan,' one adviser told me. 'He has to learn you can't govern without an agenda. He now needs to pin down what he believes in, what he wants his legacy to be, and what he fights the next election on.' After the welfare debacle, Starmer's government ends its first year looking battered and bruised. It feels much older than 12 months. Labour trails Reform by five points in the opinion polls and has had the worst start of a newly elected government in history. With Starmer's personal ratings dire, it is no longer unthinkable that his party decides he is not the right leader for the next election. The unhappy anniversary week has fuelled such chatter among Labour MPs. His internal critics will look for progress by what will be difficult elections for Labour next May, for the Scottish and Welsh parliaments and local authorities, including in London. But, unlike the Tories, Labour doesn't do regicide, and we are not there yet. Starmer has a ruthless streak, and opponents underestimate him at their peril. 'I am hugely competitive – whether it's on the football pitch, whether it's in politics or any other aspect of life,' he told the BBC this week. The PM has been here before: he also had a bad first year as Labour leader. He believes people were wrong to write him off after Labour lost the 2021 Hartlepool by-election, and that they are wrong today. In 2021, he shook up his team, fought back, and against the odds won a landslide. In his next fightback, Starmer again intends to do whatever it takes. But don't expect a fireworks display. He will do it his way.
The Independent
03-07-2025
- Business
- The Independent
Every Labour U-turn after PM reverses welfare cuts
Sir Keir Starmer has announced his latest U-turn: a £5bn change of course over his flagship welfare bill. With just minutes to go before MPs were set to vote on an already watered down welfare bill, he confirmed plans abandon a key plank of the reforms in order to get them through parliament and avoid a mass rebellion from his own MPs. The U-turn left the prime minister's authority battered and left the chancellor with a gaping hole in the public finances. As Sir Keir marks one year in office, The Independent looks at all the times he has U-turned on his promises or let voters down. Sir Keir suffered the biggest blow to his leadership since coming into power a year ago after he was forced to abandon a key plank of his controversial benefit cuts in order to get them through parliament. Just 90 minutes before voting began, ministers announced that plans to restrict eligibility for personal independence payments (PIP) – which had been the central pillar of the government's reforms – were being dropped. Sir Keir had already been forced into a U-turn the week before when more than 130 Labour MPs signed an amendment that would have effectively killed the bill off. Among the concessions announced then was a plan to impose tougher eligibility rules only on future PIP claimants, leaving existing recipients unaffected. Winter fuel payments In July, the chancellor announced that pensioners not in receipt of pension credits or other means-tested benefits would no longer receive winter fuel payments - a £300 payment to help with energy costs in the colder months. After spending months ruling out a U-turn, the prime minister in May told MPs he now wants to ensure more pensioners are eligible for the payment – something he claimed has come as a result of an improving economic picture. After weeks of speculation over what the changes would look like, it has now been confirmed that 9 million pensioners will be eligible for the payment - a huge uplift from the 1.5 million pensioners who received the payment in winter 2024-25. Grooming gangs Sir Keir spent months brushing off calls for a national inquiry with statutory powers into grooming gangs as unnecessary. As Elon Musk launched himself headlong into the debate, calling for a fresh probe into the scandal, Labour's refusal looked increasingly unlikely to hold. But Sir Keir stood firm, and even accused those calling for an inquiry, including Tory leader Kemi Badenoch, of ' jumping on the bandwagon of the far-Right '. But in yet another screeching U-turn, after months of holding out, Sir Keir in June accepted the recommendation of Baroness Casey to hold an inquiry. In a 2022 interview, Sir Keir said: 'All your working life you've got in mind the date on which you can retire and get your pension, and just as you get towards it, the goalposts are moved and you don't get it, and it's a real injustice. 'We need to do something about it. That wasn't the basis on which you paid in or the basis on which you were working.' But, in a familiar change of tune since becoming prime minister, Sir Keir last year sent his work and pensions secretary out to tell Women Against State Pension Inequality, Waspi women, they would not be getting any compensation. National insurance Labour's pre-election manifesto promised not to increase national insurance. It stated: 'Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.' But, Sir Keir and Chancellor Ms Reeves used the ambiguity around whether they meant employer or employee national insurance contributions to steamroll the pledge at Labour's first Budget in power. The pair argue that they only promised to keep employee contributions frozen and instead landed firms with a 2 per cent increase to employer national insurance contributions. Tractor tax Farmers have also said they feel betrayed by the PM, after a 2023 National Farmers Union (NFU) speech in which he promised to have 'a new relationship with the countryside and farmers'. Sir Keir claimed to be concerned that 'each day brings a new existential risk to British farming. He added: 'Losing a farm is not like losing any other business, it can't come back.' Going even further, then shadow environment secretary Steve Reed said it was 'desperate nonsense' to suggest he would scrap tax breaks for farmers, just weeks before the July 4 poll. But, in another hugely unpopular Budget bombshell, Sir Keir slashed agricultural property relief, meaning previously exempt farms will be his with a 20 per cent levy on farming assets worth more than £1m. Critics have said it will see family farmers forced to sell up, ripping the heart out of countryside communities. And other times the PM has rowed back on his words... Two-child benefit cap Promising in 2020 to create a social security system fit for the 21st century, Sir Keir said: 'We must scrap the inhuman Work Capability Assessments and private provision of disability assessments... scrap punitive sanctions, two-child limit and benefits cap.' But before the election, Sir Keir said Labour was 'not changing' the Tory policy if Labour were to win power. He has stuck to his guns, even suspending seven Labour MPs for rebelling against his King's Speech in a bid to have the policy scrapped. And now, it looks like the prime minister is gearing up to row back on the position. While nothing has been announced, the prime minister is privately said to be in favour of lifting the cap. He has refused to commit to anything until the child poverty strategy is published in the autumn but has insisted he is 'absolutely determined' to 'drive down' child poverty and has repeatedly sidestepped questions on the issue when pressed on it. £28bn green investment pledge As shadow chancellor, Rachel Reeves announced the party's plans for an extra £28bn a year in green investment at Labour's conference in September 2021. But before the election, Sir Keir ditched the £28bn a year target and said instead that he would spend a far smaller sum on Great British Energy, a national wealth fund for clean investment and pledges on energy efficiency. Bankers' bonuses Strict regulations on bonuses, which limit annual payouts to twice a banker's salary, were introduced by the EU in 2014 in a bid to avoid excessive risk-taking after the 2008 financial crisis. Former prime minister Liz Truss and chancellor Kwasi Kwarteng scrapped the cap in 2022, in a bid to encourage more investment in the UK. Sir Keir had previously vowed to reinstate the cap, saying in 2022 that lifting it 'shows the Tories are absolutely tone deaf to what so many people are going through'. But in another major U-turn, Ms Reeves announced before the election that the party 'does not have any intention of bringing that back'.
Telegraph
30-06-2025
- Business
- Telegraph
Starmer has shredded Reeves's credibility – how long can she last?
Rachel Reeves has a major credibility problem. Having been forced into a U-turn on the winter fuel payment by the Prime Minister, she has now been forced into another one on disability benefits by her parliamentary colleagues. Labour rebels may not yet be satisfied with the concessions on personal independence payments (PIP) and a different set of MPs are now also apparently considering forcing changes to the farm tax. The issue for Reeves is that everyone in the Labour Party now knows that if they apply enough political pressure, the Chancellor is made to fold. At the moment the damage done by these changes of heart is confined to a loss of authority among Labour MPs rather than the markets, and a fiscal hole in the Chancellor's books. Along with the Prime Minister's chief of staff, Morgan McSweeney, she has been the main target of attacks from disgruntled Labour backbenchers who blame her for being captured by Treasury orthodoxy or hamstrung by her own fiscal rules. These rules though are going to require more tough decisions come the autumn and at least one more major U-turn from the Chancellor. With most economists agreeing that her fiscal headroom has gone and she will be in negative territory at the next Budget, the Chancellor will regret saying she won't be 'coming back with more borrowing or more taxes'. She will have to do one or the other. Tax rises seem the more likely choice at the moment. Depending on the amount of revenue needed we may see higher taxes on banks, property, gambling companies and dividends in the 'best' case scenario, or manifesto breaking hikes in corporation tax, income tax, VAT or national insurance in the worst case. Either way such changes will amount to yet another humiliating U-turn for the Chancellor. But what if the Prime Minister baulks at these options? I could see him and the parliamentary party being on board with the 'best' case I've set out above. But he may well draw the line at clear manifesto breaches. And it can't be that long before MPs start saying that they will not vote for any increase in the big three personal taxes. Now that new MPs and those on the soft Left have got a taste for rebellion, another well-organised campaign could make it clear that no such measures would survive contact with Parliament. Especially as the decision for the Conservative Party of whether to back tax rises or not should be straightforward. At this point the PM might well tell the Chancellor to change her fiscal rules and increase borrowing. So what should she do? Faced with this nightmare scenario I think the Chancellor has one last throw of the dice to regain what credibility she can and in the process do the whole country a favour by ensuring the bond markets do not turn against the UK. Because changing the fiscal rules is not cost-free. So if they really are as 'non-negotiable' and 'iron-clad' as she says they are, she really must mean it. She has to spend the summer actively and repeatedly setting out the dangers of changing them. She needs to persuade her parliamentary colleagues that changing the fiscal rules to increase borrowing will hurt working people by keeping interest rates higher for longer. It will lead to an increase in our debt interest payments that are already sky-high at more than £100bn a year. And that ultimately the damage more borrowing will do to growth and living standards will be fatal to the Labour's electoral prospects. This is a tough ask. So, if necessary, she should go further than she has done on how determined she is to stick to them by publicly conceding that, if she can't reform welfare or cut spending, she would rather increase tax than increase borrowing. And her allies should let it be known that whilst some of her colleagues won't countenance any increase in personal taxes, changing her fiscal rules would be a resigning matter for the Chancellor. Because although it doesn't feel like it at the moment, she still has more political strength than most realise. Recent history has shown that losing a chancellor does not not save a prime minister. And however much the PM can try and blame being distracted by international events, he is tied to the economic decisions his Government has made. And although he is obviously ruthless when he needs to be, Sir Keir Starmer will be reluctant to lose his Chancellor this early on into his premiership. Ultimately, if he chooses to appease his Left-wing MPs with more borrowing over a Chancellor who has publicly made the case against such a move, then she can resign. She would do so on an important point of principle with honour and seek to cast herself as the standard bearer for fiscal responsibility within Labour. Sadly for the country, she will probably then watch as the markets react dangerously to the decisions of her successor, resisting the urge to say 'I told you so' to a party that doesn't want to hear it.
The Guardian
30-06-2025
- Politics
- The Guardian
How the welfare bill went wrong
Pippa Crerar and Kiran Stacey discuss how the government was forced into backtracking on its plans to cut disability payments. Will changes to the welfare bill be enough to win over rebels? And how damaging is another U-turn for Keir Starmer and his team?
Sky News
30-06-2025
- Politics
- Sky News
Does Starmer read his speeches?
👉Listen to Politics At Sam And Anne's on your podcast app👈 Sky News' Sam Coates and Politico's Anne McElvoy serve up their essential guide to the day in British politics. The prime minister has made significant concessions on the welfare bill after the threat of a mass rebellion from his own MPs. The changes have left Chancellor Rachel Reeves with another black hole in the public finances and some MPs are still planning on voting against the bill when it comes in front of the House of Commons tomorrow. Also, as Sir Keir Starmer celebrates his first full year in power, has this latest U-turn left him in a vulnerable position with his party and the wider public?
