Saturday’s Labour in Government: one year on Conference, organised by Claim the Future, drew a packed attendance. Below we reproduce a presentation by Andrew Fisher.

Nine months before the last General Election, John McDonnell MP and I published a report called Labour’s In-Tray – looking at what the incoming Labour government would face when it was elected.

We estimated that across our public services, just to meet need, the Government would need to commit to an extra £70 billion extra in day-to-day spending.

Labour’s 2024 manifesto promised around £7 billion in additional spending. I said at the time, it was either embedding austerity (something the Party vehemently denied) or it was a work of fiction.

We also said, rightly, that “the inheritance of that Labour government will be the toughest of any incoming administration in living memory.”

The understaffing, the backlogs across public services (from the NHS to the criminal justice system to asylum), the financial crises in councils and universities – all came off the back on the worst cost-of-living crisis on record:

• Destitution has risen by 150% in the last eight years.
• Record numbers of children are growing up in poverty.
• Record numbers of families are homeless, living in temporary accommodation.
• Unemployment was rising and the number of vacancies was falling.
• And growth was weak.

And then there was the international context – the instability caused by the invasion and occupation of Ukraine and the ongoing genocide in Gaza and regional conflict and instability that has grown from that.

And now there is Trump’s sclerotic tariff policy too.

In the Budget last year, we saw relatively significant tax increases (far beyond what was in the manifesto), and before that we saw the cuts to Winter Fuel Payments. This year we’ve seen the attempt to cut £5 billion from the benefits of disabled people. None of this was in Labour’s manifesto.

• Not the cuts to Winter Fuel Payments..
• Not slashing international aid
• Not the increase in employers’ National Insurance (which is where most of the tax rises came from).
• Not the cuts to disability benefits.

That damages trust. It damaged the Party’s standing with pensioners, with disabled people and with progressive voters more generally.

And it also damages trust when Cabinet Ministers claim there would be a run on the pound if Winter Fuel Payments weren’t cut (they reversed it and there was no run on the pound), or when another Cabinet Minister tells us the whole welfare state will collapse if we don’t cut PIP – then they U-turned on that cut.

Welfare spending is not ballooning – it has been pretty constant as a percentage of our GDP for the last 15 years. And we spend less on social security, pensions and the NHS and care than comparable European countries.

And of course there’s no questions at all over the money being available to boost defence spending by £40 billion to 3.5% of GDP – no run on the pound foreseen, no collapse of the system prophesised.

And Labour, which won fewer votes in 2024 than it did in 2019, is now polling at around 22% – 12 points lower than at the General Election.

There’s no doubt Labour faced a tough inheritance. But there were other choices that could have been made in this first year:

One would have been a wealth tax, or closing the loopholes and increasing the rates of our existing wealth taxes (inheritance tax, capital gains). Another would have been cutting the cost of living by capping costs.

1. Capping water bills instead of allowing the water companies to hike bills by an average of 27%.
   1. Capping energy bills – because they’ve gone up by 18% in the last year.
   1. Capping rent increases because rents in England are still rising well above inflation at around 8%.
   1. Or putting a windfall tax on the banks, which made record profits in recent years, and using that windfall to cut mortgage rates.

Can you imagine where Labour would be today in the polls if Labour had cut the cost of energy, of water, of rents and mortgages by saying to the corporations: you are going to absorb the costs?

It would have sent a message that Labour is on your side – not the side of corporate profiteers.

It would also have had two other beneficial effects – fewer children would have been in poverty, fewer families might have become homeless; and it would have meant more disposable income for families to spend in local economies – boosting growth and helping to keep and create jobs.

It would also mean that Labour would be polling a lot better.

Because the polls are now clear: if there was an election tomorrow, Nigel Farage would be Prime Minister. He’s the leader of a party that offers no policy solutions to any of the problems facing the UK – but he’ll offer you someone to blame.

I cannot remember a time when frontbench politicians were not just expressing concern about immigration, but openly stoking racial division.

Chris Philp, the Shadow Home Secretary, the poster-child for failing upwards, tweeted recently, claiming 48% of London’s social housing was occupied by “people who are foreign”. That’s not true: it’s 14%.

What he included in that was where someone in the household was foreign-born, even if they were now a British national, say, like Boris Johnson or the late Prince Philip.

We have the Evening Standard and national newspapers publishing pearl-clutching pieces about the proportion of “British” people in London – which they define as someone who is white, with both parents born in Britain.

Under this definition, neither the King of England nor the former Prime Minister Rishi Sunak (born in Southampton), count as British.

This divisive, race-baiting politics is becoming mainstream. Politicians are not just talking about migration, but race, something we haven’t seen since the days of Enoch Powell.

And what’s even worse, in my view, is that there are people who claim to be on the left, who also peddle this mantra – so-called Blue Labour.

The lessons of our movement are told in the slogans of trade union banners and chanted on picket lines not just in the UK but around the world: “Unity is Strength”, “United we stand, divided we fall”, “The workers united will never be defeated” or in the original Spanish: “El pueblo unido jamas sera vencido”.

We win by uniting working class people – any time we are divided, because of race, age, gender, sexuality or whatever, we are weaker.

We don’t have the wealth, the corporate donors, the media barons – but we do have the numbers, so let’s look at a few.

According to polling by More in Common; 79% of the British public opposed the cuts to disability benefits originally proposed by Liz Kendall.

Polling showed 66% of people thought the Winter Fuel Payment should be reinstated.

A recent poll by YouGov found 76% in favour of a wealth tax.

And poll after poll for years has shown two-thirds majorities in favour of the public ownership of water and energy – even majorities among Conservative and Reform voters.

So we should not be disheartened; the circumstances that gave rise to the left winning control of the Labour Party a decade ago are still there – and in fact are in many ways greater.

And our solutions to many of the problems we face are attuned with public opinion.

Conclusion

But we are in a politically dangerous moment.

A Government with no policy mandate, no vision, no leadership, and little to no ability frankly, is crashing in the polls – while an insurgent right wing populist party is making the running and controlling the narrative.

Reform has no answers to Britain’s problems – but it has clarity, a message, it has a charismatic (and slimy) leadership. It offers scapegoats but no solutions.

But instead of challenging their xenophobic messaging, Keir Starmer’s Labour Party reinforces it: telling people we are an “Island of Strangers”. No, we’re not.

He’s going to ‘smash the gangs’ and ‘stop the boats’. No he’s not.

So he is setting himself up to fail just as his Tory predecessors did. You can’t out-Reform, Reform.

The political crisis facing us is the political ineptitude of the Labour leadership – which is heading for oblivion.

This Labour leadership is not going to change course. The recent suspensions of the whip show it has learned nothing. And it will learn nothing.

And it will not be allies in fighting the Reform surge, but handmaidens – paving the way for a Nigel Farage-led government.

And if we want to stop that we have to put forward a positive alternative, rebel, challenge and organise.

To fall in behind the current Labour leadership for fear of something worse would be the unity of the graveyard.

We can build an alternative, we can win the arguments, and we can shift this Labour government – as we did, to a large extent, on the welfare cuts.

So let’s be confident. We’re right and we can win.

 Andrew Fisher is a freelance policy researcher, columnist and trainer. He was the Labour Party’s Executive Director of Policy & Research from 2016-2019.

Images: c/o Labour Hub.