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Labour is heading back to power. In the polls, this week, the party’s cruising at altitudes they’ve not enjoyed since the 1990s —with an average 19-point lead over the hapless Tories. At by-elections, too, Labour’s enjoyed upswings in support it’s not seen for decades. Both suggest the party is on course for its first big majority since the 2000s and, along the way, a complete redrawing of the political map. On these numbers, Labour will not just be swept back to power but reestablish itself as the dominant force across the Red Wall, Scotland, the big cities, university towns, and beyond. Coming off the back of 2019, Labour’s worst result since 1935, election night 2024 would feel like the start of yet another political revolution.
But be careful what you wish for. Look closely at the economic, social, and political trends sweeping through Britain and you’ll find lots of reasons why the euphoria and celebration after a Labour victory will be short-lived. Far from starting a new era of Labour dominance, far from tapping into a new zeitgeist, à la Tony Blair and New Labour in 1997, the next Labour government will soon look out-of-touch with much of the country, becoming very unpopular, very quickly.
For a start, look at the dire state of the economy. Labour will inherit a toxic combination of low growth, the highest debt for sixty years, high taxes, and an impatient, angry electorate that’s suffered the sharpest and most sustained decline in living standards since the 1950s. It will be seriously constrained by the aftermath of a trilogy of shocks —the global financial crisis, the Covid-19 pandemic, and the inflation-induced cost-of-living crisis— all of which sent debt soaring to levels not seen since the 1960s. The enormously high cost of servicing this debt will dramatically reduce the amount of fiscal space Labour will have to repair the economy and respond to similar shocks in the future. Consider this: in 1997, when Tony Blair was elected, public sector debt as a percentage of GDP was 36% —today it is 98%. From day one, then, Keir Starmer and Chancellor Rachel Reeves will be given a truly awful fiscal inheritance and have much less room for manoeuvre.
The picture on living standards also looks bleak and will remain so for years to come. On average, in the aftermath of the next election, British households will be visibly worse off than they were in 2019; average disposable income will be lower at the next election that it was at the last. Much of this will, inevitably, be blamed on the incumbent Labour government. And the squeeze will only get harder, not easier. Taxes, already at a record level, having jumped by more under the Tories in this parliament than at any other time in the postwar era, will almost certainly have to be raised even higher, meaning Labour breaking its promises not to raise taxes, while the party will also need to impose further spending cuts.
Which brings me to public services.
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