Stability or change: How will Starmer manage these competing directions?

When Sir Keir Starmer delivered his first speech as Prime Minister after winning the general election last year, he told the country he stood for “stability and moderation”. Referencing the political chaos that unfolded in the last few years of Conservative government under Boris Johnson, Liz Truss and Rishi Sunak, Starmer said that Labour would “tread more lightly on your lives” after an “era of noisy performance”. Last week’s scenes of the Chancellor in tears at Prime Minister’s Questions would suggest the government is struggling to uphold this promise. 

The Conservatives’ stint in power was a particularly chaotic period in our politics – four Prime Minister’s in the last five years, ‘partygate’ and Liz Truss’ mini budget – and there is no doubt this sense of chaos contributed to their downfall at the last election. 

Theresa May’s repeated description of her government as “strong and stable” became a source of ridicule as it faced increasingly difficult circumstances, and although May wouldn’t have provided much inspiration for this Labour government, Starmer was also keen to pitch his party as providing stable leadership.

However, Labour also made a contrasting pledge at the election; they promised to be the party for change – it was even the title of Labour’s manifesto. During their first year in office Labour have looked to combine these apparently contradictory aims while managing a large and unruly majority – and unsurprisingly, it all came to a head during last week’s vote on welfare reform.

A Parliamentary majority of 174 after the election initially seemed like the perfect base Labour needed to avoid the political chaos the public saw under the Conservatives. This hope hasn’t come to fruition. In the space of the past month, there have been U-turns on the winter fuel payment for millions of pensioners and on the decision to hold a statutory inquiry into grooming gangs, the government having previously said one wasn't necessary. Most recently, the government was forced into not one, but two, climb-downs on the Universal Credit and Personal Independence Payment Bill. 

Labour backbenchers made it clear they would not be taken for granted and reminded Starmer that any reform his government plans to bring through must meet their standards. What will worry the government most is the number of new MPs who now have a taste for rebellion. 18 new MPs voted against the Bill at second reading and 52 signed the Bill’s ‘wrecking amendment’, before being won over by the government’s concessions. 

Future headaches are likely to come with the government’s plans for special educational needs and disabilities (SEND) reform. Yesterday, Downing Street refused to rule out cuts to education plans for children with special needs. Reports over the weekend also suggested plans to look at the two-child benefits cap are unlikely to materialise following the welfare reform U-turn. 

Apart from political stability, Labour also promised economic stability; Labour prioritised their relationship with business during their time in opposition and were keen to provide reassurances over what a Labour government would look like. 

Following the fallout of Liz Truss’ mini budget in 2022, Labour have attempted to doggedly stick to their fiscal rules in order to avoid ending up on the wrong side of the bond markets and Reeves’ fiscal caution has caused much frustration among Labour MPs. The welfare reforms were meant to save £5 billion, but this money will need to be found elsewhere now to fill the black hole in the public finances. After her first budget in October 2024, which delivered the biggest tax increases in three decades, Reeves said, “This is not the sort of Budget we would want to repeat”. The Chancellor is also bound by a manifesto pledge not to increase taxes on working people – income tax, National Insurance or VAT – leaving her with little room for manoeuvre. Speculation over potential tax rises at the Budget continues with The Times reporting that Downing Street and Treasury officials have refused to rule out a wealth tax on Britain’s wealthiest individuals.

In opposition, Reeves was keen to rebuild Labour’s relationship with the business community and went into the election having made great strides in this area, however this relationship has come under increasing strain recently and, of the tax rises announced last autumn, the increase in National Insurance contributions (NICs) paid by employers was by far the most significant – raising around £25 billion. A recent article in Bloomberg said that the “initial optimism has been replaced by discontent over tax increases, persistent red tape and a lack of dialogue with the government”.

Stability appears increasingly out of reach for Labour and polling by ‘More in Common’ for The Sunday Times found that the vast majority of the public (72%) think Starmer’s government is at least as chaotic as the previous Conservative one. This includes more than a third (37%) who think it is more chaotic. It remains a rule of political life that division does not go down well with the public and this increasing sense of chaos will erode public and business patience with the government. 

Labour will be keen to shake off the ‘divided party’ tag as soon as possible and present a united front over summer and heading into party conference season. In order to do so, Starmer must now work to keep his voter coalition, party base, and backbench MPs aligned.