Labour has been in power for a year, but Keir Starmer is not having a good time. Even before this week’s disaster over welfare reform, his personal approval ratings had fallen dramatically. Although polling shows him still the most popular choice for ‘best Prime Minister’, some commentators are already writing his political obituary.
But he has performed miracles before. In 2019, when the Labour Party suffered its biggest defeat for a century, the same people assured us that it would be a decade before we saw another Labour government. But last year, they won the second largest Parliamentary majority in their history. So, it would be unwise to assume he can’t recover, especially when facing an Opposition in disarray.
Government is difficult
But he faces a financial environment far worse than predicted before the election. The fiscal rules which Labour adopted to create economic stability have proved incompatible with growing demands to spend on the things which people hoped for. And measures designed to tackle the ballooning costs of welfare are costing the support of the party’s natural constituency and their own MPs.
And big problems take time to fix. If we build enough houses and green our energy use, life will be better. But interest groups will seek to block the necessary steps, and most people will not notice small incremental improvements. Reducing our dependence on imported gas may cut 5% off energy bills at some point, but that does not transform most people’s finances in an appreciable way.
And our media does not help. Bad news gets more attention than good, and speculation about personalities – who is up and who is down – is always more interesting than the detail of policy change. The print press is instinctively hostile to the egalitarianism which drives many people on the left. And, of course, social media amplifies and distorts.
So what has really happened?
There has been no shortage of activity. Forty four Bills have been launched, 38 of them likely to become law in the current session. At least 15 new organisations have been created. A series of major, and often rapid, policy reviews have been undertaken.
To correct a historic vice of short-termism in UK government, there has been a focus on long term benefits and employment by boosting capital spending while day-to-day spending has been severely constrained. So, £39bn is being invested in affordable housing, and £13.2bn will be invested to cut household energy bills by better insulation, heat pumps & solar.
Many manifesto promises have been kept. Long running industrial disputes were resolved. The railways are coming back into public ownership and private schools now pay VAT on fees. After almost a thousand years, hereditary peers will no longer play a part in Parliament. The Employment Rights Bill, due to complete its progress in July, will significantly extend workers’ rights, reversing decades of Conservative lawmaking. The Planning and Infrastructure Bill, now in its final Parliamentary stages together with additional funding for affordable homes, aim to dramatically increase housing supply. But the biggest challenge comes from the manifesto promise not to raise income tax, national insurance or borrowing, which has acted as a severe constraint on policy-making.
As always there have been unexpected pressures. The election of Donald Trump has made economic planning more difficult and imposed a heavy, though perhaps necessary, pressure to raise defence spending. Race riots in Southport heightened political tensions and called for urgent government action. The unexpected threat of closure of the UK’s last virgin steel plant at Scunthorpe was only averted by emergency legislation.
Space is limited, but here are a few examples of activity:
Children: many small, but significant steps have been taken to support children and parents. Free School Meals are being extended to 500,000 more children by 2028-29, and free Breakfast Clubs are being rolled out to every primary school. The cost of school uniforms has been capped. Childcare funding is being boosted by £1.6bn a year by 2028-29 to provide more places for working parents.
Devolution: a major thrust to devolve power from central to local government is under way. A single pattern of local government is being created across England, and next year six new areas, including most of the Eastern Region, will have elected mayors with substantial powers.
Defence: the ten-year Strategic Defence Review has overhauled policy, and in the light of growing Russian aggression, government has agreed that defence spending will rise to 2.7% of GDP by 2027, with an aspiration to rise to 5%.
Crime and Justice: to address an immediate crisis in prison capacity, rules on time served were revised. An independent review of sentencing policy has been completed, and government has accepted many of its recommendations. 14,000 new prison places are to be built by 2031. A real-terms annual increase of 2.3% in policing budgets aims to fund 13,000 extra police officers by 2028-29.
Water: the Water (Special Measures Act) has strengthened regulations on water quality and created new penalties for companies which breach them.
The global stage
Arguably, the government has done better on the international front than the domestic one. International commentators agree that Britain and our Prime Minister are once again seen as stable and competent partners, and even, once again, as leaders. Modest trade deals have been secured with India and the USA. And as the political heat of the Brexit debate diminishes, relations with the EU have warmed, with modest but positive steps to ease some of the trade barriers Boris Johnson created.
What voters care about
For over a decade, YouGov has regularly asked, “What are the three most important issues facing the country at this time?” The top two have always been the economy and health.
For most people ‘the economy’ means living standards, which have stagnated for over a decade. One of the government’s first steps was to improve the incomes of many of the poorest by raising the ‘National Living Wage’ and the State Pension by more than inflation. Average wages have risen faster than inflation, and a recent survey shows business confidence in future growth at a ten-year high.
On health and social care, the government inherited a backlog from the impact of Covid on an already underfunded service, and faces constantly growing costs from an ageing population and improving (but expensive) new treatments. In real terms, NHS funding has been restored to its highest level since 2010, bringing it back as a proportion of GDP to the average level since 1980. For the first time in 17 years, waiting lists fell in April 2025. And a real terms boost of £2.3bn capital investment creates the largest ever budget for hospitals and equipment by 2029-30.
But the repeated failure of governments to create a coherent policy for social care means that as many as a third of all hospital beds are occupied by people with no medical need, but nowhere else to go. An independent review of social care has been commissioned, but meanwhile, a Better Care Fund has been created to address this by better integrating health, housing and social care.
The immigration issue
Net migration is now the third highest concern for voters, replacing Brexit (for which it was always a proxy). This is a serious challenge, because of a massive disconnect between public attitudes and reality. For most people, and much of the media, ‘immigration’ is synonymous with entrants in small boats. But, although overloaded small boats make good photo opportunities for politicians, they represent under 3% of all arrivals. Most people support admitting immigrants who come to fill vacancies in the labour market, as (fee-paying) students, for family reunion or on humanitarian grounds.
The overall number of immigrants is falling, and the number of people being returned has risen, following bilateral agreements with several countries. The fall is predicted to continue, but government remains anxious not to appear weak on the issue, with the new Border Force and restrictions on foreign students and their families. But ironically, with small boat numbers continuing to rise, cutting net migration means tighter control on precisely those migrants who most people welcome.
A verdict?
In Labour’s first year, there has been no shortage of activity. Much of this would be broadly popular if widely reported, but government has not been good at selling it. Much is boringly technical, and will only produce change in the medium to long term. And change is slow and difficult to see. Statistics may show improvement, but experience is individual and personal. The waiting time for a particular operation may have been reduced from a year to six months, but when a consultant tells me I will wait six months, I see only the delay and not the improvement. So people’s views are heavily influenced by media and personal experience.
Two challenges
People are impatient. After fifteen years of stagnant living standards, most of us, on left and right, are angry. We see the decay of the public realm, and growing inequality, and are desperate for some hope of a better world to come.
Two big challenges face Labour as it enters its second year. The first is its fiscal straitjacket. As the recent welfare reform debacle shows, the determination not to raise the major taxes or borrowing for day-to-day expenditure is increasingly forcing policy choices which are deeply unpalatable to its MPs, supporters and the general public. Most believe that the rules will be abandoned in the next year. We have reported on tax reforms which might help. Heavier taxation on wealth could help reverse growing inequality, but would be difficult to implement. Ultimately most people will probably have to pay more for what they think they want from the state.
The second challenge is the lack of a coherent story. In its first year, the government has identified many problems and found quite a lot of solutions. On key issues it has clearly made different choices from its Conservative predecessors. And after a chaotic decade, a long list of small changes may be an improvement. But, of itself, good things happening to other people is not enough. Without a unifying story about how all these small steps are going to make life better for all of us, people can’t see the wood for the trees. And that leaves the field open for opponents and the media to pick individual policies as high-profile battlegrounds.
In 2024 people voted for change, but despite many achievements, they remain unconvinced that Labour is delivering it. In the next year, Labour will need both an appealing story of hope for a better future, and specific improvements which people can see.
The alternative is dangerous. Growing numbers believe that, having tried both major parties and found both wanting, things could not get worse with a radical alternative. They could.
This is inevitably a selective view. You might also be interested in Bylines Times’ account of some other important areas of government activity.
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