A mixed report card: Labour’s first year
A bonus edition of Fair Comment to mark the anniversary of Labour's general election victory, looking at how the government has done against each of our 'fair necessities'
Today marks one year since Labour swept to power, winning a historic mandate for change. Central to the promises of that campaign were arguments about fairness, including a promise to break down the barriers to opportunity that prevent people across the country from maximising their potential.
It was a cause that Sir Keir Starmer led personally. At last year’s manifesto launch, the Labour leader promised “a fairer, healthier, secure Britain at the service of working people”, while the manifesto itself promised to give people a “fair chance to get on”. A few months later, when Starmer took to the stage in his first conference speech as Prime Minister, he asserted that the UK is “a country with fairness in the water”.
This morning, Starmer’s interview with Nick Robinson was published (it is written up here). When pushed on what story he is trying to tell, on what his guiding principle is, the Prime Minister replied:
The story of the government is a story of fairness - you’ve got… men and women, working people, who every day are putting in, and are entitled to, the fairness of getting back what they deserve… Improving the lives of working people, giving them respect, giving them security, giving them the opportunity to live their lives in the way that they want to live them…
The value of fairness, then, has remained a consistent refrain of Starmer’s rhetoric. He has referenced it nearly two dozen times in the House of Commons since taking office. Yet twelve months after that historic victory, can we really say that the government has succeeded in delivering on its promises? We assess the extent to which Labour has lived up to its pre-election pledges of fairness using our five principles, the Fair Necessities.
Little progress to date on meeting the cost-of-living challenge or tackling poverty
Labour came to power promising to help working people get ahead, but the picture is mixed. Although economic growth in the first quarter outpaced expectations, and the government has lauded recent significant investment announcements, too many people in society still can’t make the basic ends meet and improvements in living standards still feel out of reach for too many. Three in ten children and two in ten adults are living in poverty. Our report No Money, More Problems helps to explain the scale of the problem. The average level of financial debt among individuals with negative wealth has only grown in the last ten years, with nearly one-third of 25-to-34-year-olds having zero or negative wealth. Daily financial insecurity is characteristic of too many lives in Britain today, limiting the potential of both individuals and wider society. The government has fallen short of meeting this challenges and while ambitious housebuilding plans and the new plan to reform the NHS may eventually bear fruit, that will be little comfort to those facing such significant challenges today.
Green shoots emerging, but not enough ambition to tackle the underlying barriers
Labour’s mission to break the link between background and opportunity has yielded a number of promising policies. Chief among them were the rollout of free school meals for children in families on Universal Credit, expanded childcare provision that will begin in September, and the extension of breakfast clubs to 180,000 children. Each of these initiatives could make a meaningful difference in the lives of disadvantaged children and help to expand opportunities. Meanwhile, the Chancellor’s reform of the fiscal rules has unlocked billions in capital investment for regions outside London, representing an important step toward tackling long-standing regional inequalities. However, the economy remains stacked in favour of those with born advantage, with disadvantaged children remaining 19.2 months behind their peers by the time they take their GCSEs. While this is a challenge that will take time to address, it remains to be seen if the government’s reforms are ambitious enough to pass the test.
Solid progress on workers’ rights but huge imbalances remain in the labour market
In this area, Labour has made arguably its most significant progress with the Employment Rights Bill. Touted by supporters as the “biggest improvement in workers’ rights in a generation”, the bill will ban exploitative zero-hours contracts, introduce day-one paternity leave rights, improve access to flexible working, and strengthen protections against unfair dismissal. Yet the market overall remains deeply unequal, with the median FTSE 100 CEO paid 120 times more than the median UK full-time worker and the economy characterised by dangerously high levels of wealth inequality, wealth that is often based not on productive effort but extractive practice.
Small steps on tax reform have backfired, with social security changes poorly handled
Perhaps most controversially, Labour has so far shied away from introducing a fairer, more redistributive tax system and has failed to grasp the nettle on taxing the extreme wealth that still represents a strategic risk to our society, economy and democracy. Meanwhile, efforts to tackle tax injustice have faltered. Just days ago, Tax Justice UK highlighted the continued failure of offshore tax havens to clamp down on abusive practices. As the Budget approaches, pressure is mounting on the government to shift more of the tax burden onto those with the broadest shoulders. A truly fair exchange in society also requires a strong safety net, so we are all supported when we need it most. Yet the government’s recent Welfare Bill, framed as “anchored in fairness” by the Prime Minister, would have pushed 150,000 people into poverty through its cuts which, according to Trussell, were “cruel and unproductive.” The proposed social security cuts that were abandoned earlier this week clearly failed the fairness test. And as yet there are no concrete plans to scrap the clearly unfair two-child-limit on benefits.
Political decision-making continues to privilege the interests of wealthier people
In start contrast to its failure to consult disabled groups when planning cuts to social security, the government has been very attentive to the views of wealthier groups when planning or implementing policy changes. Climbdowns at the last budget on removing the carried interest loophole (a tax break that hugely benefits hedge fund managers) and wobbles on pushing through changes to the non-dom regime (which benefits wealthy people who are not permanently based in the UK) show that the ‘wealth defence industry’ has a huge amount of influence on government thinking and policy. This raises questions about whether we all have equal influence on politics. The widely shared (and not inaccurate) view that we do not have an equal say is deeply corroding public faith in democracy, and in the ability and willingness of politicians to act in their interests. Too many people feel locked out of our democracy, with 69% of people saying they do not have any say in what the government does. Young people in particular feel that the government is not doing enough to act in their interests and to take bold action to protect future generations.
In all, Labour can only lay claim to a mixed report card when it comes to fairness - something that mirrors the findings of our Fairness Index. The Prime Minister recognised there is still a way to go on this yesterday. At the launch of the NHS ten year plan, he said: “millions of people across Britain no longer feel that they get a fair deal”, going on to describe how it was “starting to affect the pride, the hope, the optimism that they have in this great country” and declaring that it was his “job to change that”.
We couldn’t agree more. As the team in Number 10 reflects on the lessons of their first year, it should redouble its focus on tackling the widespread loss of faith and hope felt by too many people. An uplifting and inspiring story of fairness, backed by a much bolder policy agenda, could begin to rebuild trust in politics, not only helping to heal the country’s frayed social contract but also giving the government a defining purpose as it looks ahead.
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Spot on. Starmer appears determined to occupy the middle ground, even as it becomes increasingly unclear whether that ground still exists.