After the initial glow of winning a landslide a month ago, Sir Keir Starmer’s government has just been forced to grapple with its most difficult week so far.
Rioting by far-right groups in the wake of the Southport attacks, a backlash from pensioners over Chancellor Rachel Reeves’ cuts to winter fuel payments and GPs taking national industrial action for the first time in 60 years has been a stark reminder to Labour of how tough governing can be.
But what lies in wait this winter could be more profound and longer-lasting – and may even overshadow Sir Keir’s entire first term.
A series of ticking time bombs across the domestic policy agenda could all go off within Labour’s first six months in office.
The Chancellor’s first Budget in October is expected to introduce tax rises and more public spending cuts – in addition to the cancellations of reforms and infrastructure projects that she announced in her landmark statement on Monday, as she claimed the Gvernment has been left with a £22bn black hole from the Tories.
Ms Reeves argued this week that the tough prescription for the public finances was necessary and responsible, and that the government would not be swayed from pursuing economic growth.
But the fallout from that determination could be tough. The Chancellor has cancelled the planned cap on personal care costs that was due to go ahead next year and council leaders are warning that there will be consequences.
They say that without more funding for social care in the Budget town halls will have to make even deeper cuts to services and more local authorities could be pushed to the brink of bankruptcy.
The Local Government Association has estimated there will be a gap of £6.2bn over the next two years between current settlements and what is needed to keep all council services – including social care – going.
Councillor Stephen Houghton, the Labour leader of Barnsley council and the chairman of the Sigoma group of mainly northern and urban English authorities, told i: “We need more funding in the system. Adult and children’s social care are both under serious pressure and as we get to winter in particular with older people that is going to become more intense.”
The funding squeeze was also beginning to cause a “postcode lottery” between councils in wealthier and less advantaged areas, he said.
“The big issue of the last few years is that we are being asked to provide that funding [for social care] through council tax, that is a huge problem because we have different council tax bases from which to pool that service from.
“A 5 per cent increase in council tax in Woking is going to raise twice as much as that same increase in Barnsley. But also the biggest needs for social care are in the poorest areas.”
Cllr Houghton said that councils would not be told what their Whitehall funding settlements were until December, two months after the Budget, meaning there is less certainty to plan ahead to fund services.
“We are trying to forecast our spending while doing that in the dark,” he said.
Connected to the problem of social care is the cut to winter fuel payments to all but the poorest pensioners who qualify for pension credit and other benefits.
In the wake of Ms Reeves’ statement, Age UK and other campaigners warned that older people just above the threshold for pension credit would be hardest hit by the loss of the £100-£300 payment, and that this could force more pensioners to choose between heating or eating, increase their risk of going into hospital and adding to the problem of the NHS backlog as a result.
Labour Party insiders fear that the backlash from angry pensioners is just one of the potential flashpoints this winter.
This list also includes fears over Thames Water collapsing, universities being put under huge strain due to a lack of funding, more councils going bankrupt and even possible blackouts in the winter due to a lack of energy security.
While Ms Reeves insists that there will be no tax rises for working people, people in ordinary households could still be left feeling worse off as a result of the Budget, particularly if there is not a second interest rate cut before its 30 October date and energy bills start to rise again.
The pledge still includes no increases in VAT, national insurance or income tax, but the Chancellor’s admission this week that tax rises are on the cards fuels expectations that inheritance tax and capital gains tax could be raised and there could be changes to tax relief on pensions.
There is a political way through for the government on the economy, if it can start to show voters it is making real improvements to economic growth, public services and energy security – and hold the line that the Conservatives are to blame for the mess.
But other problems loom. Ministers are also concerned about a fresh winter of discontent, particularly from unions representing NHS staff.
The 18-month dispute between the government and junior doctors looked to be at an end this week after the British Medical Association agreed to put a pay rise of 22.3 per cent over two years to its members. But in its response their union warned that this was seen as just the start of the doctors’ bid for the restoration of loss of pay over more than a decade.
But unions representing other NHS workers including nurses, ambulance drivers, and hospital porters are to ballot their members shortly on whether to accept or reject a 5.5 per cent pay offer.
The Royal College of Nursing, whose members last year rejected an offer of a 5 per cent pay rise plus backdated lump sum, despite it being recommended by the union, are seen in government as a potential strike risk.
On Monday the RCN issued a veiled warning to the government in response to the 22.3 per cent average pay offer to junior doctors, with the union’s general secretary Professor Nicola Ranger saying while they did not “begrudge doctors their pay rise”, “what we ask for is the same fair treatment from government”.
She said nurses would vote on whether the 5.5 per cent offer was “enough of a start on our journey”.
Relations between newly minted Labour ministers and the civil service expected to implement their new policies and reforms are said to be very warm after the Government’s first month.
But as the reality of governing kicks in, this might not last.
A Government source said: “We’ve actually been told that ministers are being too nice to the civil servants and that this might need to change.”
They added: “Many of the officials have been surprised to see ministers queuing up for lunch in the department cafeterias, because they are so used to [ministers] sending out their lackeys for a Pret lunch.”
A Whitehall official said: “I think all ministers have been told by the centre that they have to be very, very nice to civil servants at the start. It will be fascinating to see how the Sue Gray project plays out.”
The question is how much voters will tolerate a difficult first winter under a Labour government after 14 years of a Conservative administration that was so resoundingly rejected at the ballot box.
Key to this is whether Sir Keir, Ms Reeves and other Cabinet ministers can make their strategy of blaming the Tories for the £22bn black hole stick with voters.
Luke Tryl, executive director of More in Common, said: “I think the challenge is this – voters are definitely willing to give Labour the benefit of the doubt, and tend to say they have one to two years to improve things.
“But they are also desperately impatient to see change because they are so frustrated with broken Britain.
“If industrial action makes that worse, particularly on the NHS which is the top area the public say they will judge Labour’s success, I think it could get tricky quite quickly, as we have a very volatile electorate, much less willing to stick with parties through good and bad. The era of assuming parties will get two terms if they got a landslide is over.”
But Mr Tryl said the “Blame the Tories” strategy would work better if Labour had won around 40 per cent of the vote on 4 July – not 34 per cent.
He added: “They seem to be governing in the world they expected to be in – that is having got around 40 per cent of the vote, and facing the Tories as their only real opposition.
“In that world you can do a big ‘Blame the Tories’ strategy, say the books are worse than you thought (which the public largely buy) and make tough choices. The difficulty is they only got 34 per cent of the vote, don’t have votes to lose, but also crucially there are more places for those votes to go than just the Tories.”
Things could get much harder for the government if voters, frustrated at their decisions, switched to Reform – which came second to Labour in 80 seats – on the right or the Greens, who came second in around 30 seats, on the left, Mr Tryl added.
“If people are unhappy they don’t just have to go to the Tories,” he said. “So I think the window for being able to spend capital or to try and repeat Osborne’s 2010 blame game is much narrower.”
Labour’s ability to get through a difficult winter will also depend on how quickly the Conservative opposition can get its act together under a new leader, who will be elected in November.
Shannon Delaney, research consultant at Savanta, said: “Labour’s assured start to government means that I think they probably have more time and goodwill among the public than some commentators give them credit for.
“That being said, Keir Starmer ran Labour’s campaign on the basis of ‘change’, and the public will expect to see some in the near future.
“Concerns about public services in particular have not gone away, and nor has Labour’s fundamental problem – the public expect an improvement in things like the NHS, but there doesn’t appear to be any money to do anything about it.
“A winter of tax rises, public spending cuts and another NHS crisis could be difficult for Labour – but fortunately for them, there isn’t much of a Conservative Party to hold them to account – yet.”
