Department of Strategic Security and Military Research and Studies 11-10-2024

The United Kingdom’s Labour Party government, led by Prime Minister Keir Starmer, reaches its first 100 days in office on Saturday, a period marked by a flurry of domestic and international activities but overshadowed by mounting challenges and a growing sense of unease.

While policy decisions so far have largely adhered to election manifesto pledges, including promises to enhance relationships with key trading allies, particularly those in Europe, there have been alleged missteps, including contentious decisions on pensioner benefits and public sector pay, as well as resignations and criticism over gifts and donations.

However, the issue that has dominated all others during this first trimester is how the new government will address the public spending deficit in the budget on Oct 30.

UK media assessments of the government’s performance span the full spectrum of opinions, ranging from praise for decisive action, through concern over unfulfilled promises, and on to outright condemnation.

In his analysis for the center-left New Statesman magazine, political editor Andrew Marr put it bluntly.

“For Labour’s friends, these have been miserable weeks. After an election campaign to celebrate, the next 100 days were anything but. There has been no catastrophe, just grubby, embarrassing stories,” Marr wrote.

“Policies which have enraged vocal groups, from pensioners to investors, a breaking wave of unforgiving media hostility, and above all, a sense of drift at the center; confusion, hesitation, uncertainty. Political authority rests on faith, so this has been a dangerous autumn.”

Appraisals from right-leaning media have been brutal. In its leading article, The Spectator magazine, which is known for promoting a conservative viewpoint, said: “The promise of dramatic change has been overshadowed by a series of errors, misjudgments and scandals that one would associate more with an administration in its dying days than a government enjoying a fresh mandate, a massive majority and an absent opposition.”

After bringing the Labour Party to power for the first time since 2010, Starmer first turned his attention to the international stage, flying to Washington DC for a NATO summit on July 9.

Flurry of activity

The summit was a chance for Starmer to establish himself on a global platform and reaffirm the UK’s commitment to NATO. He announced military aid for Ukraine, reset UK-US relations, engaged with world leaders, and pledged to increase UK defense spending to 2.5 percent of GDP.

Soon after, on July 18, he hosted leaders at the European Political Community summit at Blenheim Palace, near Oxford, where he emphasized his government’s dedication to improving relations with the European Union, post-Brexit.

Starmer focused on defense and security cooperation, while also conducting bilateral meetings with key European leaders, including plans for future engagements.

He also unveiled a new strategy to combat illegal migration that will increase collaboration with European partners.

The plan includes enhanced Europol involvement, new cooperation agreements, improved intelligence sharing, and 84 million pounds ($109.6 million) for projects in Africa and the Middle East, to address root causes of migration.

Planning reform, a key plank of the Labour Party’s manifesto proposals to significantly increase UK GDP growth, was the focus of a series of summer announcements by Deputy Prime Minister Angela Rayner.

In his first month in office, Secretary of State for Energy Security and Net Zero Ed Miliband initiated several key measures, including legislation for a new public power company, lifting the onshore wind turbine ban in England, approving large solar farms, and establishing a “mission control” unit to drive Labour’s ambitious goal of decarbonizing the UK’s power system by 2030.

Foreign Secretary David Lammy this month defended the UK’s decision to return the Chagos Islands to Mauritius while maintaining control of the Diego Garcia military base, arguing that the status quo was not “sustainable” and that the deal “benefits us, the UK, the US and Mauritius”, despite criticism from opposition lawmakers who accused Labour of giving away a key asset.

Chancellor of the Exchequer Rachel Reeves delivered her first announcement on public finances in late July, revealing what she described as a 22-billion-pound “black hole” in the public purse, setting the stage for “tough decisions” to be made in the upcoming budget.

A pressing resolution for public sector pay loomed, and Reeves confirmed the government would accept recommendations from pay review bodies for various public-sector employees, typically suggesting a raise of around 5 percent, which is above inflation.

An agreement was reached with junior doctors, offering a 22.3-percent salary raise spread over a two-year period.

These wage agreements, with an estimated price tag of 9.4 billion pounds, are likely to be a major factor contributing to the budgetary shortfall, according to a report from UK law firm Simmons and Simmons.

Echoing this perspective, Conservative Party former chancellor of the exchequer Jeremy Hunt disputes the 22-billion-pound “black hole” claim, asserting that a significant portion of the deficit is attributable to the new government’s decision to fund public-sector pay increases.

To address overspending, Reeves has announced immediate cuts of 5.5 billion pounds this year and 8.1 billion pounds next year, while pledging to adhere to fiscal rules and prepare for a challenging budget on Oct 30.

Cost-cutting measures announced include 3 billion pounds in departmental savings, terminating the Rwanda migration program, canceling elements of education reform and select infrastructure projects, reassessing the initiative to build 40 new hospitals, and limiting winter fuel payments to only the most financially vulnerable pensioners.

Difficult choices

The government also intends to add 20-percent VAT to private school fees across the UK and remove tax breaks for private schools in England, with the new rules set to start on Jan 1.

To further address the deficit, political observers speculate that the Oct 30 budget may include tax increases beyond those in the manifesto, particularly changes to capital gains tax and inheritance tax exemptions, which could potentially raise up to 9.5 billion pounds annually, according to the Resolution Foundation.

In addition, the former government’s fiscal rule that debt-to-GDP must be falling in the final year of the parliament may be modified to allow more borrowing, according to the Institute for Fiscal Studies.

At the 2024 Labour Party conference last month, Reeves promised an investment-focused budget, stating “growth is the challenge and investment is the solution” and that “it is time that the Treasury moved on from just counting the costs of investments, to recognizing the benefits too”.

In recent weeks, Labour’s senior figures, including Starmer, have faced criticism for accepting expensive gifts from party donors, a controversy that contrasts with their election campaign emphasis on “serving the country” and upholding high standards in public life.

The government encountered more tumult last week, when Sue Gray, Starmer’s controversial chief of staff and former Partygate scandal investigator, resigned from her role following infighting, and criticism over her salary and donations received.

She was blamed “for a disastrous start to Labour’s tenure in government”, reported Politico news website.

“Gray’s exit on Sunday from her role as the most powerful adviser in the British government followed weeks of poisonous briefings about her high salary and alleged poor performance, and a stream of dire headlines dogging Starmer’s new administration,” the digital outlet added.

Morgan McSweeney, her replacement, is said to be Starmer’s most trusted political advisor and the architect of Labour’s landmark electoral triumph.

“Starmer aims to use this appointment, along with a broader restructuring of his core team, to overcome the tumultuous beginning of his administration, which has resulted in a significant decline in his personal approval ratings,” Politico reported.

Despite Labour’s insistence on following rules and Starmer’s decision to repay 6,000 pounds worth of gifts, public opinion remains critical, with only 18 percent believing the party has behaved well since coming to office, while 63 percent have expressed disappointment in Labour’s standards, according to a YouGov poll.

In his analysis for The New Statesman, Marr concluded: “Overall, these have been days that shook Labour most, a brutal reminder that even a huge electoral victory on the back of a modest share of the vote doesn’t give you the right to be liked. There are months and years of very heavy lifting ahead. But these recent weeks have shown that Team Starmer has to do better.”