Andy Burnham's honeymoon as Prime Minister is expected to come to a juddering halt after next week's Budget, with grim economic warnings, a worsening cost of living crisis and expected tax hikes providing a brutal reality check.
Despite the cheery message of hope, cracks are already appearing, with Cabinet infighting threatening to tear the Government apart. Senior ministers are locked in bitter splits across five major policy battlegrounds, which could leave No 10 paralysed at a crucial time.
Immigration and Border Policy
Perhaps the most explosive powder keg issue facing No 10 is border policy. Shabana Mahmood's tough immigration measures, particularly her measures on Indefinite Leave to Remain, are causing waves.
Both Angela Rayner, the Housing Secretary, and Energy Secretary Miatta Fahnbulleh clearly don't support them. Burnham is likely to water down the plans, which is likely to infuriate the Home Secretary and her supporters.
This looks like the first major test of team discipline for the fledgling Prime Minister, and how he handles it could set the tone for the rest of his time in Downing Street.
Brexit and the EU Customs Union
In a brazen attempt to re-tie Britain to Brussels, pro-EU Cabinet figures are pushing to drag the UK back into the EU Customs Union. Europhile ministers are quietly lobbying for regulatory alignment, sparking furious accusations from Brexit supporters who view any surrender on trade and tariffs as a fundamental betrayal of the 2016 referendum vote.
The Prime Minister has said he will stick to commitments in the last Labour manifesto not to rejoin the EU, the single market or a customs union during the current parliament. But both Ed Miliband and Defence Secretary Wes Streeting have previously said they want closer ties, particularly with regard to the customs union.
Beyond trade alignments, an even more toxic dispute is raging over rejoining the European Union altogether. Rejoiner zealots – of which Burnham is the chief – inside the Cabinet would ultimately like to frogmarch Britain back into the clutches of Brussels. More cautious Cabinet members, like Mahmood and Jonathan Reynolds, think that reopening settled Brexit arguments is an ideological mistake that will alienate millions of voters across the country.
Heathrow Expansion and North Sea Drilling
The ideological civil war over national infrastructure has erupted over plans for a third runway at Heathrow. Greener-leaning Cabinet ministers are furiously resisting expansion, claiming it completely undermines net zero targets. Meanwhile, economic realists are demanding an immediate green light to spur growth. This pitches Ed Miliband and Miatta Fahnbulleh at odds with Chancellor John Healey. Burnham finds himself trapped in the middle, paralysed by indecision while business leaders warn Britain is losing ground to international rivals.
After months of dither and delay, Burnham has finally given the green light to new drilling in the Jackdaw gas field. But the likelihood of this happening for Rosebank, an oilfield, is somewhat less likely – especially with clear opposition from the likes of Miliband and Fahnbulleh, plus a host of Labour backbenchers. A decision may have to wait until next month.
Capital Gains Tax Row
With the Treasury under pressure to plug a mounting deficit, a fierce row has broken out over tax hikes. Some ministers are insisting on a sharp increase in Capital Gains Tax to target wealth creators. Healey has rejected that, but this puts him on a collision course with Louise Haigh, the First Secretary of State and Burnham's right-hand woman, and Streeting. It would appear the Chancellor has won this battle, but long-term relationships could suffer.
