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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
This Labour government is not popular. It is polling at 19 per cent on average, it is losing council by-elections essentially everywhere, it is third in the run-up to elections to both the Scottish and Welsh parliaments, and on course to be sharply repudiated in London as well, a stronghold. Nor is that midterm unpopularity the result of “difficult decisions” that will pay off later on. Quite the reverse, as it stands: by deferring tough decisions, Labour’s pre-election Budgets will be ones in which public spending falls and taxes go up, an unorthodox approach to fighting for re-election.
I say this because while most Labour MPs and government aides have absorbed the problem, an eccentric but influential minority talk as if Sir Keir Starmer’s first phase had been a success, and therefore that the recent removal of Starmer’s all-powerful second chief of staff, Morgan McSweeney, is an inexplicable tragedy. No one had a more laser-like focus on the voters Labour needs to win, I am told. That these voters have been in the rear-view mirror and getting further away for the past 18 months is apparently a minor detail.
At least, however, most of Labour’s upper echelons recognise that the government has been badly run and is drifting towards disaster (although some of their preferred escape routes are a combination of the odd and optimistic — suggesting that a government which has already hiked or introduced a series of wealth taxes can fund better public services with yet more, for instance). Both those warning against and wanting Labour to drift towards its soft left seem not to have noticed that the distance between the current Labour government and a soft left one is a very short commute indeed.
The average Labour MP understands that, so far, the government’s decisions since winning power in July 2024 have put them on the road to electoral extinction unless something changes. Parliamentarians from the UK’s other troubled legacy party, the Conservatives, are, for the most part, blissfully unaware. Kemi Badenoch’s leadership has been bolstered in recent months by morale-boosting performances in the House of Commons and by an improvement in her own personal ratings.
I have seen a lot of surprising things in British politics, but I never thought I’d hear quite so many grown-ups claim that the ability to skewer a prime minister, whose crisis-ridden government has blundered into not one but two child sex offender scandals in quick succession, was the sign of a leader of the opposition who contains the stuff of greatness. In fact, it leaves us some way short of what might once have been considered basic competence. That the Conservative Party currently trails both Reform and Labour in the polls rarely intrudes on conversations about the Tory party’s future.
In the past, to have only a small lead against a struggling government would, rightly, have been taken as a sign that not all is well with the main opposition. To not only be failing to establish a commanding lead but to be behind and in third place, and for this to be seen as not just an adequate performance but as a sign of a leader finding their feet is astonishing, to put it politely.
It’s true that Badenoch is less unpopular than her rivals — no one in British politics these days is popular — because she is less polarising than Nigel Farage. But many Liberal Democrat leaders have been more popular than their Labour counterparts: it hasn’t helped that party regain the status of the old Liberals as the main alternative to the Conservatives.
There is some kind of future for a shrunken Tory party as a way for respectable people to vote against Labour without voting for Reform, just as the Liberal Democrats have sometimes been a way for the well-to-do to vote against the Conservatives without having to put a tick in the Labour box. But it’s not a future that the Tory party should want, or accept without a fight as they are currently doing.
Labour’s delusion is based on a failure to see that its re-election hopes will be decided on its policy record and what it achieves. Chasing better opinion poll ratings leads to a bunch of “good-on-paper” attacks on businesses and inadequate tax rises. This means the party risks going into the next election with both underperforming public services and an ailing economy. Starmer does not need to shift to the left or be “bold” — he and the party need to think more deeply about the country’s problems and how to resolve them, something made easier if what one MP calls the “climate of fear and hostility towards new ideas” that has emanated from Downing Street dissipates.
The contrasting Conservative problem is that the party sees Labour’s downward trajectory all too clearly. But this lulls MPs into dangerous complacency about their own predicament. A common experience is to hear a Tory MP set out in lucid terms why this government is failing, only to turn into Dr Pangloss when talking about their own side. Labour failure is no guarantee of Conservative success, and wishful thinking of the “something will happen to Farage” variety is not a strategy to beat Reform.
Both parties need to change and change quickly. Labour needs to recognise that their re-election chances in 2029 hinge not on what is popular in 2026 but on what will have paid off by then. The Conservatives, meanwhile, need to accept that as Britain’s historically most successful political party, trying to transform themselves into an echo of Reform, an anti-system party, will never work. Both parties are running out of time to avert not just defeat at the next election but their destruction as major parties of government.