Those panic alarms in MPs’ welcome-to-Westminster packs may have been eyed nervously by some on the Labour benches in the past week. The shock of Donald Trump’s victory makes many uneasier about the next election, even if they are not exactly panicking. It’s five years before voters pass judgment on Labour’s successes and failures, but talk of a 10-year programme of renewal suddenly feels to them a tad hubristic.
Thundering great damnations against social democrats of the Joe Biden/Kamala Harris type have rained down from all sides. Predictably, the right caricatures them as virtue-signalling liberal elites who lost touch with working-class values, preoccupied as they were with incomprehensible woke identities, sneering at uneducated fools who were tricked by the demagogue Trump. There’s never any shortage of unhelpful blame within Labour’s palisades echoing the charge that it’s out of touch with ordinary people, as Reform threatens many seats. But hey, Labour just won a huge majority with its most working-class frontbench ever. Fascinating though the US election was, there are limited lessons from that alien country. Why trash Harris’s not-bad campaign, or wrongly assume that social-democratic Bidenomics must have been an electoral loser?
Look around the world. Everywhere, incumbent governments of every hue have taken a beating from angry voters. For the first time in almost 120 years of records, every government in 10 major countries being tracked by a research project with elections this year suffered an unprecedented reversal. The Financial Times’s data cruncher, John Burn-Murdoch, calls this year “the graveyard of incumbents” across the developed world. Emmanuel Macron’s Ensemble coalition, Japan’s liberal democrats and Narendra Modi’s Bharatiya Janata party were among ruling parties given a kicking. Right, left, extremists and moderates, down they all tumbled, with the Canadian and German governments due to fall next. The post-Covid cost of living crisis and the invasion of Ukraine sent prices soaring. Never mind if world events are beyond incumbents’ control: governments get the blame. Voters take indiscriminate revenge for stagnant wages and soaring prices when they are surrounded by rising obscene wealth.
Labour may escape that plague on all incumbents in a Britain still queasy from political rollercoaster rides, with fresh memories of Brexit, Boris Johnson, austerity and Liz Truss’s mortgage injury. Hurling the Tories into their worst ever defeat was a moment of national catharsis. Even if Labour is less than loved, it’s perverse to make comparisons with the Democrats’ fate.
Last Friday, the cabinet gathered at an away-day (only across the road in the Treasury). Though the US election was not on the agenda, naturally the shadow of Harris hung over their discussions on how to motor on with Keir Starmer’s five missions. Lest you forgot, these are economic growth, clean energy, crime and justice, opportunity through education and the NHS. If they aren’t exactly embedded in the public imagination, it hardly matters: these are engines for working across departments. What matters in 2029 will be offering the right answers to simple questions: do you feel better off? Is the NHS visibly recovering? Are fewer migrants arriving in boats without visas?
But government is more than Deliveroo. “Delivery” is essential, but so is a sharp sense of political identity to take the credit for it. That first budget was Labour to its core: after decades of money flowing from workers, it took from bosses and capital owners while lifting the minimum wage, creating a steep graph that shows the rich paying most, the poorest least. It introduced VAT for private school fees. It raised capital gains tax for the very richest. Polluting private jets will eventually pay £1,000 per passenger on intercontinental flights. Non-doms will no longer shelter tax-free. The super-rich avoiding tax by sequestering money in farmland will start paying inheritance on anything over £3m. As farmers ride into Westminster next week, remember they are “still better treated than anyone in terms of inheritance tax”, according to the Institute for Fiscal Studies.
But the backlash goes on, day after day. Businesses and the best-off protest with no suggestions for other taxes to pay for the NHS and state schools. Threats of the wealthy taking flight abound, but LSE evidence surveying the top 1% found none actually planning to migrate. After all, that top 1% have done astoundingly well, making 31 times more wealth than all the rest since 2010.
Voters – with their pay stagnant or worse – understand this unfairness by instinct, if not in numbers. That’s why measures in this budget have been popular, though you’d never know that from most reporting. Capital gains were in people’s top three choices for tax increases, alongside VAT on private school fees. Taxes on air travel and on energy and waste are not far behind. Those who earn more than £75,000 a year and second-home owners top the list of those who should pay most. True, people know next to nothing about how most tax is spent (they guess that spending on migrants is second-highest, even though it takes only 0.3%). Paul Lewis, presenter of BBC Radio 4’s Money Box, finds people are in favour of inheritance tax on farms when they hear the facts. YouGov finds the only item in the budget the majority rejects is the £1 rise in bus fares (and voters are right on that).
Britain’s gross inequality is well understood and a strong reason for the anti-politics mood. Although this budget slightly tilting things more fairly goes with the grain of public sentiment, ministers seem markedly reluctant to talk about social justice, as if their budget choices were only due to the £22bn black hole. Though Labour politicians have fairness in their marrow, they nervously refrain from voicing egalitarian instincts that would chime strongly with most people. Labour MPs are by their nature insurgent – combatants against the great social inequality ignited by Margaret Thatcher – and their leadership should let them off the leash to say it. Being a bit vanilla wins few hearts and minds.
Lucky in its opponents, Labour can relish Kemi Badenoch falling into every trap, defending every well-off interest, every private school and private equity owner against taxes that the public supports. The Tories learned nothing from their humiliation: public opinion rejects their small state. Watch her urge Starmer to speed up a US trade deal – hardly politic as the world awaits Trump’s trade war. Trade at any price? Kim Darroch, the former UK ambassador to Washington, warns that any US offer will be exactly as it was in 2017: only on the table if Britain opens up to cheap US farm produce, its chlorinated chicken and hormone-treated beef. If Badenoch backs that, she alienates the public and farmers. So bring on these battles: they will only sharpen Labour’s identity. If the US election has anything to teach Labour, it’s this: in a raucous social media world, be bold.
