One year in, UK PM Starmer is in trouble without any likely exit

Key topics:Starmer's authority shaken by welfare cuts revolt and party infightingFiscal rules and no-tax pledge limit Labour’s ability to boost growthEarly Labour wins ignored as public disappointment and poor messaging grow.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Rosa Prince.The first anniversary of Keir Starmer’s election this week finds him at the nadir of his premiership . A bruising volte face forced by his own Labour MPs over plans to cut welfare has challenged his authority and hobbled future action. Even if he wins today’s vote on benefit spending, his struggle to corral one of the largest parliamentary majorities in history represents a humiliation.But bad as the outlook is, there’s no need for despair. With four years until another general election must be held, Starmer has plenty of time to turn the ship around — if only he can learn from his mistakes.From questionable decisions to accept donations of clothes and concert tickets, causing a furor that overshadowed his first weeks in office, to an ill-considered speech on immigration using nativist rhetoric he now disavows, these were missteps that wouldn’t have happened with a more competent operation inside 10 Downing Street.But the original sin, which has had a corrosive impact on Starmer’s entire premiership, came even before his election, when he and Chancellor Rachel Reeves agreed to rule out both tax rises on “working people” and any increase in borrowing. The promise was seen by Labour’s campaign chiefs as necessary to seal the deal with voters, but it had the effect of implying that intractable problems could be resolved painlessly.Reeves was further boxed in by her commitment to maintain self-imposed “fiscal rules” of reducing borrowing by the end of the five-year parliament, coupled with a self-denying ordinance on unfunded spending, discipline she considered necessary given Britain’s high debt of 100% of gross domestic product with repayment costs higher than much of the G7. Without raising taxes, that meant either higher growth or taking an ax to public spending. She has failed to deliver either. .Read more:.Keir Starmer’s managerial mindset collides with political and legal principles.Despite insisting growth was the government’s first priority, Reeves’ first budget virtually doomed it, by hiking employers’ national insurance, stifling investment and job creation, while Donald Trump’s tariffs, mitigated but not altogether swerved , finished it off. (The OECD forecasts the UK economy will grow by 1.3% in 2025 and an anemic 1% in 2026.) When the Office for Budget Responsibility demurred over the likelihood Reeves would meet her fiscal rules at the March spring statement, she rushed to announce major cuts to disability payments. A few months on, the chickens have come home to roost, as Labour MPs balked at the prospect of explaining why taking away benefits from people who can’t go to the toilet or dress unaided is the right project for a self-proclaimed Socialist government. A new black hole left by last week’s partial U-turn on the disability cuts (Labour MPs remain unhappy that under the compromise offered by No. 10, future claimants will still receive reduced benefits) is only around £3 billion ($4.12 billion) a fraction of the overall budget of just over a trillion pounds. But the reality now is that tax rises are almost inevitable. Some within Starmer’s fractious party are now demanding a full reset and a major shakeup of the team around the prime minister. Reeves and Labour’s campaign chief turned No. 10 chief of staff Morgan McSweeney are on the firing line. How else can Labour soften the blow of the tough measures and ensure their next four years in office don’t continue as a miserable slog toward defeat at the polls?They could start by being honest, to stop the cycle of overpromising then retreating. Starmer and his team generally need to become better at communicating — and at connecting with his MPs. If he can’t sell his vision to them, what hope does he have in taking the public along on the journey?The news isn’t all bad, however. The opposition is divided, with the once mighty Conservatives facing an existential crisis and Nigel Farage’s upstart Reform still untested at the national level. And there are successes from Labour’s first year they should be shouting about: An analysis by the Sunday Times shows hospital waiting times are down, employment is up, knife attacks are down. Net migration has halved. Public-sector strikes have been curtailed; massive infrastructure projects including nuclear power stations, railways and reservoirs, greenlit. Yet none of that is widely appreciated; a recent Ipsos poll found 56% of voters were disappointed by Labour.As Joe Biden discovered six months ago and former Labour PM Clement Atlee nearly 100 years before that, you can achieve plenty in government voters really like — reducing inflation, creating the National Health Service — but if they haven’t bought into your project, you won’t get the credit.To take advantage of the opportunity presented by the turmoil on the right and ensure Labour isn’t a one-term government, Starmer must avoid the own goals and focus on tackling the genuine problems facing the country, rather than constantly being distracted by those of his own making..© 2025 Bloomberg L.P.

One year in, UK PM Starmer is in trouble without any likely exit

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