Probation report on Starmer's Labour

Labour has been in power since 5 July: only 80 days so far, not yet even at the first hundred days mentioned since at least Roosevelt in the 1930s. But it's not too early for a first report. 

In my last company we gave new starters a full report on how they were getting on within 6 weeks so we could make sure that any early signs of under performance were dealt with, preferably by improvement but if necessary by an early exit well before the clock was run down. I remember only too well when I was in the public sector hurried reports being done in the last month of the probation period when there was no realistic chance of exiting an under performer. On another occasion one of my team leaders was determined to engineer a transfer in of a chap who'd had a whole series of negative reports elsewhere in the business. Against my advice he was sure the guy would be an asset and we were short of resources so I allowed myself to be persuaded. Of course he wasn't an asset and I regretted not being firmer. A mistake early in my time in management that wasn't repeated. 

An early exit isn't on for Labour with their huge majority but still - what does my report say?

There have been a number of early controversies. For a former DPP the riots after the dreadful events in Southport were a bit of a political gift in terms of events that just happen, enabling the new government to look tough while the courts just did their job. They also quite reasonably blamed their predecessors for having to release prisoners early to make space because the Tories, weirdly, didn't build prisons which one would have thought would go down well with their base. That was a problem allowed to "build" for 3 decades but Johnson & Sunak will get the blame.

The most contentious issues have been the removal of the universal pensioner fuel allowance benefit, the failure to say they will restore child benefit for all children and now (yet again, already!) the farrago over gifts from donors: wardrobegate, the gifts of clothing and even spectacles to Starmer, Reeves and others. The prompt implementation of substantial public sector pay deals has also received some criticism.

The restriction of the old folks winter fuel allowance to those receiving pension credit was a bit of a surprise as pensioner benefits have been protected throughout the (so-called) era of austerity. From my point of view as a comfortably off pensioner the old - if healthy and affluent - have had a very good deal compared with every other sector of the population over the last decade. So I was fairly neutral about the move personally, though I wondered about it politically. The decision seemed hurried and can't have been properly assessed. It seemed almost opportunistic in implementation. When it was suggested Starmer was sitting on an assessment of the harm it would do he made light of it saying there wasn't one, which left me very uneasy. It seems intuitively likely that many pensioners who are around the pension credit limit will suffer excessively, especially as many eligible pensioners don't claim pension credit. 

I'm left in bit of a dilemma over this one as I've often debated with Democracy Man the pros and cons of universal against means tested benefits. I'm generally not a fan of paying these type of benefits to everyone and clawing some of it back through tax as it is inefficient and encourages a benefits dependent culture. The government has inherited a bit of a bind here as the state pension is now very close to the personal allowance, which is frozen until 2028 so there is already a coming storm on people on low incomes paying tax on their state pension. That might have steered them to removing the fuel benefit completely, as they've already committed to not increasing general rates of income tax.

I'm left feeling they should have done that assessment but just wanted to look tough and prepared to take unpopular decisions. Most pensioners will whinge about it but will be ok; some won't be.

The child benefit issue was a non-story for me. Labour hadn't said they would extend the benefit beyond the two child cap and it wasn't in their manifesto so it wasn't clear why some of their supporters and MPs felt it should be done immediately. Mischief making by anti-Labour progressives helped to stir the issue up. However, on the general point of principle, it seems strange to me that child benefit is capped in this way. Our birth rate is uncomfortably low for sustainability. There are many countries in which it is worse (in South Korea it has plummeted from 1 in 2018 to 0.7 in 2023 against 2.1 for sustainability - and we may be heading that way. 

Why should we support people who want large families you may say? As many couples decide not to have children at all, it seems foolish to me to limit the benefit to two in the families that do want to have children if we want a reasonable birth rate. I don't buy the "why should we subsidise large families" argument. It doesn't really matter to me whether the people going through school and then joining the work force to pay the taxes to fund our state pensions come from families with one, two or many children, all that matters is there's enough of them.

So I'm puzzled that Labour didn't defuse that argument by saying they planned to do it even if a date couldn't be set before a first Reeves budget.

For me the dodgy decision in these early steps (miss-steps I've seen them called) was the way that Reeves caved in on public sector pay. Oh, I don't think she had much choice over paying the pay review body recommendations, it was decoupling them from any semblance of reform or change in working practices in agreeing a raft of settlements costing over £9bn for the NHS, police, rail, civil service and teachers I have a problem with.

Subsequently Starmer has said there will be no more money for the NHS without reform. So he's going to hold management to ransom is he? Sorry, Keir you've sold the pass on that, mate, just as Gordon Brown did nearly 20 years ago. Don't they learn?

As ever though, it's often not things of great substance that cause governments problems, it's what things look like. It wasn't a good look to find that Labour donor Lord Alli had been given a Downing Street pass. It now turns out that Sue Gray personally authorised this access, which is very unusual for someone who doesn't work there. Labour is now scrabbling around, saying the pass was "temporary" and has been given back.

But on the back of that story came all the stuff about clothes, spectacles and Arsenal box freebies for the PM, clothes for the chancellor (who says she's "too busy to shop") and a holiday in New York for Angela Rayner. None of this bothers me too much as all or most of it has been declared, though I agree with Martin Samuel's argument that Starmer shouldn't accept hospitality from a major football club when he will, on current plans, be the boss of the people who appoint the Football Regulator. Starmer's argument on security seems reasonable and I don't doubt that he likes taking his son. But, as Samuel says, it's cough up £8k for your own box or watch on the telly. Or be compromised.

What doesn't seem right is that the same donor has given so much money (over £300k has been reported, though over many years) to so many of Labour's front bench in opposition and now in the cabinet in government. I don't see how anyone can ensure that hasn't bought excessive influence.

It seems strange that someone as po-faced as Starmer would accept more in gifts and freebies than any other recent leader of a major party (according to the Guardian) and more than any other MP since 2019 (according to Sky News).  And they were taking these donations while criticising Johnson and the Tories for grift.

Haven't Starmer and his team heard the classic advice that, if you are wondering whether something is a good idea or not, just think what it would look like if reported in the press?

However, the thing that is causing me the most concern about Labour's start is the £22bn current year black hole they say they found on taking power. One might argue that in the total of £1.2bn annual government spending, £22bn is in the noise. Moreover most commentators think the issue is not the current year but future years as both Labour and the Tories spending plans have been described as works of fiction, neither allowing enough for increasing demands.

Nevertheless, Reeves and Starmer have used this at least partly mythical black hole to justify the winter fuel allowance grab and set expectations for a tough budget, while agreeing to everything put in front of them on pay (including Sue Gray's*). David Smith in the Sunday Times is one of many economists to pooh-pooh the idea put forward by Reeves that her economic inheritance is the worst since, oh didn't she say the Reformation or something?  It is transparently not the case that the situation is worse than in 2010. Sure, debt has just hit 100% of GDP for the first time since the early 1960s, when it was on it's way down after world war 2. But what matters is the comparison with other countries. In 2010 the UK was uniquely exposed because of the size of its financial sector. Smith and most of his ilk do not see anything like the same level of economic danger for the UK at the moment.

Moreover, the economic climate is improving, albeit sluggishly. Inflation is falling and the tepid growth forecasts are warming up slightly.

So, Starmer and Reeves are talking bollocks. But they have a plan. Not an economic plan, like George Osborne kept saying he had, at least not one they plan to tell us about until the end of October. But they are copying from the Cameron/Osborne playbook. The Tories resolutely blamed their predecessors for the economic ills of the country all the way through the 2010-2015 parliament. It worked and probably guaranteed their win in 2015. Starmer and Reeves think they can do the same. We'll see, because it will probably be harder to make it stick. But they may feel that it's an each way bet: if the economy improves they claim the credit. If it doesn't - blame your predecessor.

Which reminds me of an old joke. A chap has taken over from a senior manager who has been fired. In the desk he finds three envelopes, with instrcutions on when to open them. When the first quarter's results are poor he opens the first envelope. "Blame your predecessor" it says. He does and is given time to get things right. When the next quarter's results are poor he opens the second envelope. "Blame the market and state of the world economy".  He does and is granted more time. When the next set of results are just as bad he opens the third envelope. "Write out three envelopes" it says.

So I don't know if this tactic will work for Starmer and Reeves, but it's going to get tiresome listening to it.

The real tests will be whether Labour can reform planning and get building and growth going while handling with competence the inevitable periodic outcries about things like immigrants in small boats.

There is a danger that the government's gloomy talk will become a self-fulfilling prophecy and squash any hope of growth. At the Labour party conference they adopted a more positive tone. So which is it? 

At the conference Reeves said "no more austerity". But she's already promised not to raise almost any tax that is guranteed to raise anything substantial. So what's it going to be at the end of October, Rachel? Are you a self-harming sadist or a pussy cat?

However, with anything like competence and a reasonable degree of consistency the economy should begin to improve. In the longer term our readiness to respond to the uncertain geopolitical times we live in may pose greater challenges, especially since I fear that Starmer is not comfortable about taking quick decisions - I suspect he isn't confident he'll get them right. Remember just how long it took Labour to decide to back down from its ridiculous £28bn a year green investment pledge. It wasn't a screeching u-turn was it? And his answers to the wardrobegate fuss have been slippery rather than firm.

Still, however quick or slow Starmer's decision making, the questions I pose above are very open indeed and it's not clear to me that any of our political parties are currently capable of rising to those challenges.

Oh the report card? Oftsed has moved away from single word assessments but I'll say: floundering.

* As I understand it from a Times reader critical of shabby journalism, Sue Gray is not paid more than the PM as that compares her new, post civil service pay rise salary with last year's published actual pay for the PM. And while lots of Downing Street special advisers seem thoroughly cheesed off about having had a pay cut, this is because they are now civil servants and have been put on the appropriate pay point which happens to be less than Labour was paying them as employees when the party was in opposition. Nevertheless I did smirk at the comment from one Tory MP: "crikey, it took us 12 months to get to this level of discord in Downing Street, even with Johnson and Cummings there".