U.K. Prime Minister Keir Starmer and his center-left/left Labour Party government are under great pressure.
You’d think that Starmer’s catastrophic approval rating (17% positive to 66% negative), the state of the U.K. economy (only 1.3% growth is expected in 2025, inflation is at nearly 4%, and unemployment is rising), and the soaring popularity of Nigel Farage’s Reform Party (leading Labour 7-10 points) might have jolted Starmer into a new clarity of purpose. Instead, however, the prime minister is acting as if the coming winter of discontent is a mirage that can be ignored into evaporation.
Although used poorly in reference to William Shakespeare’s Richard III source material, in U.K. politics, the phrase “winter of discontent” refers to the winter of 1978-1979, in which the Labour government of James Callaghan lost governing credibility. Callaghan soon thereafter lost an election to the Conservative Party under Margaret Thatcher. Today, Starmer faces a similar crisis.
Starmer’s challenge was underlined on Tuesday and Wednesday when his allies began orchestrating leaks to the media, accusing Health Secretary Wes Streeting of preparing a dangerous bid to challenge Starmer for the keys to No. 10 Downing Street (in the U.K. system, the leader of the party holding a parliamentary majority automatically becomes prime minister). Streeting denied any plots to remove Starmer but notably refused to rule out a future leadership challenge. And while Starmer condemned those leaking against Streeting, saying he had nothing to do with it, the chaos on display underlines his increasing political vulnerability.
Continuing rates of high illegal immigration are Starmer’s key problem. This has forced the government into expensive measures, such as renting entire hotels for asylum-seekers and accepting increasing pressure on already creaking public services like the U.K.’s socialized medical system, the National Health Service. Highly aggressive criminal prosecutions of various social media posts related to asylum-seekers have also led many U.K. residents to believe their interests come second to strangers. Recent incidents, such as the mistaken release of numerous prisoners, have also played into the narrative that Starmer’s government is incompetent.
Still, it is the weak economy that most informs public dissatisfaction.
It’s clear that the tax and spending binge embarked upon by Starmer and his Chancellor of the Exchequer Rachel Reeves (U.K. Treasury Secretary equivalent with far greater powers) since entering office last year has failed. The deficit remains stubbornly high, and Starmer needs to kick-start business and consumer confidence. He also needs to find ways to cut spending. Unfortunately, the prime minister isn’t willing to battle it out with his party’s far-left.
Earlier this summer, Reeves presented modest welfare reforms which, as I noted at the time, were “designed to reduce the deficit by $7 billion a year by 2030. The reforms centered on strengthened eligibility safeguards for those receiving generous incapacity benefits. The U.K. needs spending savings because its 2024-2025 budget deficit is predicted to come in at $187 billion.” The reforms were sensible if far from sufficient. But when Labour backbenchers revolted over even these modest reforms, Starmer simply surrendered. With that surrender went another crumb of credibility.
No serious economist believes the United Kingdom’s ballooning welfare budget is sustainable amid very poor productivity rates and an aging population. Consider, for example, that an extraordinary 1.7 million Britons are now receiving unemployment benefits out of a total population of 69 million. An increasingly large number of young people are now neither in work-related training nor seeking active employment. But with market confidence weakening as the deficit looms large, and spending cuts off the table, Starmer and Reeves are returning to the tax solution.
Outlining a new budget on Nov. 26, Reeves is widely expected to abandon Labour’s election manifesto pledges and introduce new taxes on income and investment. When that happens, it will be another blow to already stretched household wallets and to business confidence. Why, investors ask, would they take risks with new ventures when Starmer will simply tax gouge them in success today, tomorrow, or when the next budget comes calling? Why take risks when Starmer is happy to allow millions to sit idle on generous benefits and the unions to enrich their members at the expense of the public purse?
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All of this must leave Farage feeling pretty happy. Farage’s Reform Party has yet to produce a serious governing platform beyond its pledges to cut immigration. But at the moment, he is content to let Starmer sink deeper into the political abyss.
Starmer might well be replaced as prime minister before Christmas. But whoever replaces him is likely to pursue even more disastrous left-wing policies. And as public discontent grows, the pressure to hold a new election will reach a breaking point.