FTI Consulting UK Public Affairs Snapshot: Labour’s first month in power and what comes next

With a busy international agenda from the outset, he was soon in Washington for a major NATO gathering and hosted a summit of his own for European leaders in Oxfordshire.

Domestically, a King’s Speech with 40 proposed bills and key announcements from the Chancellor, Rachel Reeves, and the Deputy Prime Minister, Angela Rayner, show a government eager to make good on its manifesto commitments. Unlike the usual quiet period in August, we can expect this momentum to continue even as Parliament rises for recess this week.

It has not all been plain sailing. Last week, the Prime Minister suspended the whip of seven of his own MPs who voted against the government in a King’s Speech amendment to scrap the two-child benefit cap, the first test to Starmer’s premiership.

Despite the small rebellion, plenty more quietly agree that the cap must go to meet a promise to eradicate child poverty. The Labour leadership also leans towards scrapping this, but it made no such commitment in the party’s manifesto.

Starmer’s challenge will be to balance such demands with previous promises not to make unfunded spending announcements, as well as polling which suggests a majority of British people support retaining the cap. The issue will likely resurface, not least when Reeves presents her first Budget to Parliament on 30 October.

More generally, the row is illustrative of a wider point that the government is keen to make: its economic inheritance from the Conservatives is abysmal and public finances are worse than Labour expected – a point to an extent echoed by the respected non-partisan think tank the Institute for Fiscal Studies.

Reeves has confirmed Labour will have to raise some taxes – speculation focuses on capital gains or inheritance rather than taxes ruled out in the manifesto – in an attempt to balance the books, and just this week she cancelled some infrastructure projects and made cuts to the winter fuel allowance to reduce spending.

The Conservatives, for their part, have disputed this narrative, arguing the economy is the best performing in the G7, with inflation at 2 per cent, the deficit at 1.9 per cent, and unemployment at 4 per cent, and have pointed to the choice the Chancellor has made in awarding public sector workers a substantial pay increase.

With Labour commanding a healthy majority from the outset, it seems that the days of knife-edge votes or government scandals that the public have become used to are in the past. Instead, a more “normal” brand of politics might return in the autumn, albeit with plenty for Westminster watchers to get excited about.

The return of Parliament in September will bring with it the formation of new select committees. Labour will hold 18 of the 26 chair positions, including Foreign Affairs, Defence and the Treasury. These will be competitive positions, not least because they are paid, and elected by all Members of Parliament.

Labour MPs who lost out on a ministerial job and those not in Starmer’s faction of the party will be hoping to secure a spot, or even a chair position, on the more influential committees and ruffle some feathers. The Conservatives’ chair positions have fallen from 16 in the last Parliament to just five, including Home Affairs and Public Accounts, and the Liberal Democrats will chair three, including Health.

Meanwhile, the Conservatives are attempting to begin the process of rebuilding themselves in opposition. Rishi Sunak has committed to lead the party until November when, following a lengthy leadership election, a new Leader of the Opposition will be confirmed.

Six Conservative MPs are in the running – Kemi Badenoch, James Cleverly, Robert Jenrick, Dame Priti Patel, Tom Tugendhat, and Mel Stride – all of whom served in the Conservative government at some point in the last five years. Five served in the most recent government – although Jenrick resigned last year – and Dame Priti served on the frontbench most recently under Boris Johnson.

The final two candidates will be chosen by Conservative MPs, with the pair then facing each other in a vote among party members, the result of which will be announced on 2 November. It is worth bearing in mind the make-up of the new Conservative Parliamentary Party: it is more moderate, with fewer right-wingers, which will undoubtedly have an impact on the final outcome.

Elsewhere in opposition, the Liberal Democrats are now the third largest party. They are pleased to have secured the role of Chair of the Health and Social Care Committee, a topic it made the centre of its general election campaign.

The two nascent parties to watch are Reform UK and the Greens, both hoping to capitalise on relative general election success. Just as Nigel Farage’s Reform UK will attempt to fill a gap in what it perceives as real conservatism, the Greens will endeavour to do the same, providing what it describes as genuine left-wing politics as Labour governs from the centre. 

Autumn will bring with it the traditional party conference season, the first Labour conference as a party of government since 2009. A consultation to modify the National Planning Policy Framework will close, feeding into a new Planning and Infrastructure Bill. Legislation will also be laid in October to boost workers’ rights as part of a plan to “make work pay”, and a bill to establish Great British Energy will begin its passage through Parliament.

Starmer will be hoping his honeymoon phase continues through the second half of the year but, as all Prime Ministers with landslide victories know all too well, such periods of adulation never last long.