Labour risks descending into factionalism

The Labour Party has found itself in treacherous waters after just a year, with a febrile atmosphere and factionalism already breaking out at the party’s conference, Paul Montague-Smith, lead counsel – public affairs at MRM writes.

The Labour Party conference this week shows what a difference a year can make.

Last year’s jamboree was a celebration of a huge election victory. Ministers, MPs, advisers and delegates were all smiles and full of optimism. This year is a much more muted, tense affair and no wonder. The Government’s back is well and truly against the wall.

Three separate polls (from YouGov, Electoral Calculus and More In Common) suggested Reform UK could win a parliamentary majority were there to be a general election.

To rub salt into the wound, polling from Ipsos also suggests that Keir Starmer is the most unpopular Prime Minister in British history. According to the survey published as the conference started, just 13% of voters are satisfied with the job he is doing, compared to 79% who are not. His net rating of minus 66 is the lowest for any PM recorded by Ipsos since they started in 1977.

Similarly, Rachel Reeves’ personal satisfaction rates have also reached a historic low with a net rating of minus 56 – worse than Kwasi Kwarteng’s under Liz Truss after their ‘KamiKwasi’ budget.

With talk in the party of it being likely, if not inevitable, that the PM will have to step aside before the next election – and recent polling of party members suggests this is what they want – things are becoming more febrile and factional by the day.

Increasingly – November’s Budget aside – the local government, Welsh and Scottish parliamentary election results next May are seen as a crunch point for the party.

Much of the conference coverage has been dominated by the perceived manoeuvres of the ‘King of the North’, Manchester mayor Andy Burnham, who has criticised the Labour leadership over its direction of travel and its desire to close down debate over how to turn things around. Over 40% of Labour members say they would support Burnham in a leadership contest.

It was against this backdrop that the Chancellor gave her set-piece speech on Monday. Both she and the Prime Minister have been at pains to stress that their manifesto commitment not to increase taxes on working people still stands, while avoiding specifically committing to not increase VAT or the other big taxes.

Her speech was essentially a plea to her party to ‘stay on course’ and ignore the siren calls of those who would borrow even more (meaning Burnham and Reform), which she argued would lead to markets losing confidence in the government’s commitment to fiscal responsibility. She argued that on entering office the government was faced with a choice of investing or overseeing more decline. Reeves also made the case for an active, strategic state and for her decision to change the fiscal rules so that she could increase capital investment across the country. She called on party members to be proud of what they have achieved to date.

Her doubling down on the importance of investment to chase growth suggests that any savings at the Budget won’t come from scaling back those spending plans.

Politically, she had both the Conservatives and Reform in her sights. Reeves repeatedly highlighted reasons why activists should reject any suggestion that there’s no difference between a Labour and Tory government, while also rejecting the politics of isolationism and division. Reflecting the political challenge they face from Nigel Farage & co., she argued that Reform’s ‘reckless promises’ poses the biggest threat to the real interests of working people.

The main new policy announcement she made was a commitment to abolish long-term youth unemployment through a new Youth Guarantee, which would guarantee young people a place in further education, an apprenticeship or a work placement.

Outside of the conference hall the Chancellor made clear her desire to move to just one report on the economy and public finances by the Office of Budget Responsibility (OBR) per year, as opposed to the current two. You can understand why.

If things are bad, you either feel compelled to take immediate action – promptly spun as an ‘emergency budget’ by your opponents – or face months of damaging uncertainty and speculation until measures are announced at the next annual budget.

Keir Starmer’s own speech had a central clarion call beseeching the country to unite to build a better Britain. He framed the challenge as a choice between decency or division and decline, as well as a test and fight for the soul of the country.

But his pleas for steadfastness and unity were aimed as much at his party members and backbench MPs as to the wider country. It was a pitch for centrist patriotic politics – including an explicit thank you to the private sector for bearing the weight of tough decisions to try and stabilise the public finances. It was as much directed against the left and its solutions like a wealth tax as to the right.

Next week the Conservatives have their turn to make their pitch to the public via the media. I expect their conference will be muted and reflective too. Both the YouGov and More in Common surveys had the Conservatives in fourth place, behind the Lib Dems.

Reform are posing an existential threat to their future, with growing impatience and fear within the Conservative party membership. Kemi Badenoch will need to reassure her troops just as much as Keir Starmer needs to reassure his. Right now – and despite a very warm reception for  Keir Starmer’s speech amongst Labour members – the chances are that both will fail and eventually fall.