Prime Minister Keir Starmer, who steered the Labour Party from the nadir of Corbynism to a landslide election victory, now confronts his most formidable challenge. He must tackle a drift within his party back towards old Labour refuseniks who are obstructing the pro-growth change he promised the nation.
From Pragmatic Triumph to Parliamentary Rebellion
Sir Keir Starmer's leadership, beginning in 2020, was built on pragmatic progressivism, a deliberate break from ideological dogma. His success lay in balancing social justice with economic efficiency, an evolution of the New Labour formula. He resisted internal calls for a 'tax and spend' approach, focusing instead on making Labour electable by listening to voters.
In power, he and Chancellor Rachel Reeves took hard decisions, declaring cuts to pensioners' winter fuel allowance and stating that lifting the two-child benefit cap was 'unaffordable'. Recalcitrant Labour backbenchers were suspended for rebelling. However, attempts at modest welfare and disability benefit reforms led to a humiliating parliamentary defeat for the government.
A Budget That Shifted The Goalposts
This defeat triggered a series of policy U-turns, culminating in Chancellor Reeves's last Budget. It boosted child benefits and delivered further personal tax hikes—a combination not explicitly endorsed by the 2024 electorate. The Budget was also marred by chaos over market-sensitive information from the Office for Budget Responsibility, leading to the honourable resignation of its chief, Richard Hughes.
The core criticism is that the government has lost its focus on growth, its stated 'No 1 priority'. Instead, headlines have been dominated by welfare and funding recent policy reversals. Coupled with last year's employers' National Insurance hikes, new employment regulations, and rising business costs, the administration struggles to live up to its claim of being 'the most pro-business in history'.
The Renewed Push for Reform and EU Links
In his latest speech, Starmer has tried to return to the growth and welfare reform agenda. He announced that Work and Pensions Secretary Pat McFadden and former Blairite minister Alan Milburn would lead a drive to tackle 'a cycle of worklessness and dependency'. The Prime Minister's aim is to boost productivity by getting more people into work.
Whether his MPs permit a more radical programme remains in doubt, especially after the previous botched attempt. Reform failed partly due to mishandling backbenchers who saw disability cuts as a panicky reaction to poor public finances. The government must plan more meticulously next time.
Starmer also renewed his drive for closer EU trading links, stating bluntly that Brexit has 'significantly hurt our economy'. He argued for reducing frictions with the EU, acknowledging it would require 'trade-offs' but was essential for economic renewal and tax revenues to fund a strong social security system.
In short, the Starmer project needs to re-emphasise a dynamic, wealth-creating economy—the 'change' Britain still yearns for. The Prime Minister's greatest test is whether he can transform his party once more to deliver it.
