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  1. The Staggers
3 January 2024

Labour must prepare for a grim inheritance

A stagnant economy and a fractious geopolitical climate won’t disappear with a change in ministers.

By Freddie Hayward

This may be the year in which more than a decade of Tory rule ends, when Keir Starmer could be in No 10, hosting cabinet, attending the National Security Council and negotiating with foreign powers. But what obstacles lie ahead?

Business confidence and the government’s grip on parliament might be better under Labour but the country’s fundamental problems will be the same whoever wins the election. A stagnant economy, struggling public services and unstable foreign affairs won’t disappear with a change in ministers.

The international context is growing more fractious. Conflict between states, as Adam Tooze notes, was rising even before the 7 October Hamas attack and Israel’s subsequent invasion of Gaza. This year will see elections in Pakistan, India, the US, South Africa, the European Parliament and Taiwan. Starmer could be facing a resurgent hard right across the Channel and Donald Trump across the Atlantic if he becomes prime minister.

On the home front, prospects for economic growth remain bleak. In the FT’s annual survey of economists, the prognosis was that stagnation will continue without high levels of investment. While the standard of living will improve for homeowners, pensioners and those on the minimum wage, people with mortgages and who are on benefits will suffer. Amid a general economic malaise, industrial disputes persist. In what is expected to be the longest strike in NHS history, junior doctors in England left work at 7am this morning to force the government into giving them an inflation-adjusted pay rise. Meanwhile, local councils are grappling with funding gaps and bankruptcy.

This is the headwind into which Labour turns. It must write a manifesto that resolves the tension (as perceived within the party) between winning a mandate for radical economic change and reassuring voters that it won’t stage an insurrection and abolish private property. At the same time as writing policy, the party needs to prepare to deliver it. That will depend on access talks with the civil service starting soon so it can implement Labour’s programme swiftly.

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Politically, party unity will be important in preventing the media and the government from picking apart Labour’s message. It would help if the relationship between Labour in Westminster and its metro mayors (who will face their own elections in May) and party leaders in Wales and Scotland were smoothed out. Reports suggest the party will have to fend off a flurry of Tory attacks grounded in Starmer’s time as a defence lawyer and as chief prosecutor. Labour figures I’ve spoken to are confident that Starmer’s legal career makes victory more likely, not less.

As for the Conservatives: they need to move beyond their failed “autumn reset” and quickly decide which issues will distinguish them from Labour. The subtext to the Autumn Statement was the government’s claim that taxes will be higher under the opposition. This is a tricky line to take when it raised taxes in the first place, and when Labour voted for the National Insurance cuts. Will this become No 10’s mantra for the election, or will it be immigration?

I still think the general election will be called in the autumn because prime ministers don’t choose to be forced out of office after two years on the job. Labour will keep briefing about a spring election so it can push the narrative that any delay means Rishi Sunak is scared to face voters. Nonetheless, it would be a waste of time if speculation over the date of the vote overwhelmed discussion of what a future Labour or Conservative government would do.

This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here.

[See also: What are the key questions Labour needs to answer in 2024?]

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