From mandate to mutiny: Can Starmer survive year two?

Is Sir Keir Starmer doomed? Cabinet ministers and backbenchers are increasingly concerned that the first year of Starmer’s premiership has gone so badly that his hopes of a second term are already evaporating.

That the question is even being asked demonstrates just how far Starmer has fallen. The prime minister was elected with a landslide majority and stood outside Downing Street promising a decade of national renewal. At the time, he appeared unassailable as he pledged to end the turmoil that blighted successive Tory governments.

But since then, he has suffered the biggest fall in public support for any newly elected British government in history, a direct result of its tone and policies during the early stages of his premiership.

The prime minister had ended any semblance of a post-electoral honeymoon, warning that he and his chancellor, Rachel Reeves, had discovered a £22bn black hole in the public finances. He used a speech in the Rose Garden in No 10 to tell voters that things would get worse before they got better. Just how much worse they soon discovered as Reeves announced huge tax increases in her first Budget.

The approach, Starmer himself admits, was a mistake. Labour, he said, “squeezed the hope out" of people who had just elected the party with a mandate to change the country. "We were so determined to show how bad it was that we forgot people wanted something to look forward to as well," he said.

But it was not just the pessimism that was the issue. It was also a question of judgment. Starmer's tenure in office has been dominated by a succession of expensive U-turns, hitting both his authority and political capital.

The decision to strip about 10 million pensioners of winter fuel payments was a case in point. In the wake of Labour's poor showing in the local elections in May, both Cabinet ministers and MPs came back with the same message: the decision had backfired and was still being met with real anger on the doorstep.

MPs who had hoped for 10 years in office found themselves increasingly concerned that they would lose their seats at the next election. The scale of the backlash was such that for many in marginal constituencies it was existential.

In the end, Starmer bowed to the inevitable and backed down, reinstating winter fuel payments to seven million pensioners at a cost of around £1.5bn.

One climbdown led to another. Within a few weeks, Starmer found himself facing a revolt from 120 Labour MPs over the government's welfare reforms. The prime minister spent months arguing that the reforms were an economic and moral necessity. Some ministers even argued that without cuts to the soaring benefits bill there would be a run on the pound.

The policy did not survive contact with reality, in this case, the voters. But to the astonishment of the rebels, Starmer refused to back down until the last moment – even when whips had been advising him to do so for weeks. Reeves now finds herself with another £5bn black hole in the public finances, which she will need to fill at the autumn Budget.

The pressure on the chancellor is particularly intense. Her public breakdown in the Commons may have been the result of personal issues, but it also had much to do with the challenge of trying – and failing – to face down the welfare rebellion. The chancellor was a direct target of backbench discontent amid accusations that she was attempting to balance the books on the backs of the poor.

The only saving grace was the reaction of the markets. The price of government borrowing surged amid speculation that she was about to be sacked. It was only when Starmer gave an unconditional guarantee that she would stay in office that the market turmoil abated.

For Starme,r the problem now is one of authority. Ministers and backbench MPs are freely briefing against him, Reeves and the wider No 10 team. Talk of the need for “regime change” is in the air. Some are even speculating that Starmer will not survive to lead Labour into the next election.

Lord Blunkett, a former Labour home secretary, believes there has been a fundamental change in the balance of power and that the party increasingly holds the whip hand, an assessment that many in No 10 privately agree with. Starmer has in effect made a rod for his own back, and backbenchers will push him hard on anything they disagree with or to force through their own interests.

Starmer finds himself trapped in a vicious cycle. The collapse in his poll ratings is leading to a collapse in his authority, with backbenchers in marginal seats increasingly emboldened. Retaining discipline will only become harder as this Parliament goes on.

Many of the backbenchers – and indeed some ministers – are concerned that Britain is effectively being governed by the Office for Budget Responsibility, the official forecaster. The decisions on welfare, tax and spending are all made with the forecaster's scorecard in mind as the government seeks to balance the books. The chancellor believes that doing so is critical to maintaining the confidence of the markets and keeping the cost of government borrowing under control.

Ultimately, the criticism of the OBR is inherently unfair: it makes its forecast based on the government’s fiscal rules. Reeves’ decision to leave just £9.9bn worth of fiscal headroom – effectively spare money – means that the smallest changes in economic circumstances can have disastrous consequences for fiscal policy. There is almost no margin for error.

Tax rises look inevitable and, as Reeves has acknowledged at Cabinet, they will be hard. The chancellor said that the "low-hanging fruit" was picked at the last Budget. The Treasury is drawing up a list of unpalatable options for tax rises as it seeks to balance the books.

So where does Starmer go from here? The prime minister has thrown his weight behind Morgan McSweeney, his chief of staff, after a series of bitter briefings. Losing one chief of staff – the prime minister sacked his first, Sue Gray, last year – is unfortunate. But to lose two would only add to the questions about Starmer’s vision and direction.

Like Sunak before him, Starmer is betting the house on delivery. That if he can reduce the cost of living, cut NHS waiting lists and bring down illegal immigration, voters will reward him at the next election.

But given the inherent uncertainty about hitting those pledges – many of the factors driving the economy are out of his control, there is intense scepticism that he can hit his waiting list target and the small boats keep coming – Starmer has alighted on another strategy.

The prime minister is promoting Nigel Farage, the leader of Reform UK and the man who commands just five MPs, to the role of official opposition. The Tories, he argues, are irrelevant. Reform is the real threat.

The polling suggests that he is right. Reform is now routinely top of most national polls and Farage appears to be gaining genuine traction with millions of voters. The realpolitik behind the strategy is that Reform’s success comes predominantly at the expense of the Tories. Divide the right and there is a chance that Starmer and Labour can come through the middle.

It is a strategy that is fraught with risk, and not just for MPs in red wall seats facing a direct challenge from Reform. But Starmer believes that there is a chance it will work. Given his current predicament, he will grab any cause for hope with both hands.