Labour Government Crisis: Starmer's Authority Under Threat

Understanding Labour’s Current Crisis in UK Government

Sir Keir Starmer’s Labour government faces unprecedented challenges just sixteen months into power. What began as a triumphant election victory with a landslide majority has transformed into a government battling internal dissent, poor polling figures, and widespread questions about its political authority. The recent budget crisis, confrontations with health workers, and stark polling figures showing Reform UK as the main challenger paint a picture of a government struggling to maintain control.

The core issue is stark: Labour’s political machinery appears to have ground to a halt. Internal briefing wars have weakened the Prime Minister, backbench MPs openly question government direction, and voter confidence has collapsed to historic lows. This is not simply a problem of unpopular policies but a fundamental breakdown in governmental discipline and direction.

The Week No 10 Lost Control: Inside Labour’s Crisis Management Failure

The week of November 10-15, 2025 will be remembered as the moment Keir Starmer’s authority visibly crumbled. The sequence of events revealed the dysfunction at the heart of government.

It began with a briefing campaign orchestrated by Downing Street allies against Health Secretary Wes Streeting. The strategy was transparent: force Streeting to demonstrate loyalty to the Prime Minister by having him publicly deny any leadership ambitions. Instead of working, the attempted kneecapping backfired spectacularly. Streeting, a popular figure within government, emerged strengthened. Meanwhile, the Prime Minister looked weak and paranoid.

Senior officials described the chaos as “probably fatal” for Starmer’s premiership. Cabinet ministers spoke of being “completely astonished” by the “inward-facing gameplaying” at the centre of government. One minister summed it up bluntly: “This isn’t Monopoly – it affects people’s lives.”

Morgan McSweeney, the Prime Minister’s chief of staff, reportedly feared the atmosphere was so toxic that a leadership challenge could materialise after the November 26 budget announcement. The mood in the Parliamentary Labour Party had shifted dramatically. With a majority of 170 seats, many backbenchers believed their individual votes no longer mattered politically. This created a dangerous dynamic: if backbenchers didn’t fear losing an election, why would they fear rebelling?

The Income Tax U-Turn: How Poor Communication Damaged Trust

Rachel Reeves spent weeks carefully laying the groundwork for manifesto-breaking tax rises. The Chancellor held a press conference where she spoke of “difficult choices” and insisted the government could neither increase borrowing nor cut spending. She told the public “everyone has to play their part.” This was clearly designed to prepare voters for bad news.

Then came the reversal.

Less than two weeks before the budget, Downing Street abandoned plans to increase income tax. The decision shocked ministers, MPs, and the markets. The Office for Budget Responsibility received a submission listing major changes – with the income tax rise now removed.

Financial markets reacted negatively. The cost of borrowing for government spiked, with 10-year gilts rising 12 basis points to 4.56 per cent. The signal sent by this U-turn was damaging: the government appeared chaotic and indecisive.

Treasury sources insisted the decision reflected better-than-expected economic data. However, observers pointed to the real cause: Downing Street’s political panic. Ministers and MPs had already rebellious signals over an income tax rise. Conservative opposition leader Kemi Badenoch said: “Only the Conservatives have fought Labour off their tax-raising plans.”

Reeves now faces the unenviable task of raising approximately £30 billion through a series of smaller, narrower tax-raising measures. This creates additional complications. Economists warned that attempting to raise large sums from multiple minor taxes would make the system “more complicated and inefficient.”

Possible measures being considered include changes to gambling tax, wealth taxes, mansion taxes, salary sacrifice restrictions, and freezing income tax thresholds for a further two years beyond 2028. The latter could raise approximately £8 billion but would increase the tax burden on middle-income earners as inflation pushes wages higher.

Doctor Strikes and Healthcare Chaos: The Streeting Controversy

Wes Streeting’s handling of NHS pay disputes reveals the government’s broader problems. After taking office, the Health Secretary moved quickly to end junior doctor strikes through significant pay concessions. He negotiated a deal that provided resident doctors with substantial pay increases and won broad praise.

By November 2025, the situation had deteriorated. Resident doctors, unhappy with what they saw as inadequate pay restoration, launched fresh industrial action. Streeting responded by describing the strikes as “morally reprehensible” and comparing the British Medical Association to a “cartel.”

The rhetoric shifted dramatically from his pre-election statements where he expressed sympathy for doctors’ pay erosion. Resident doctors felt betrayed. They noted that despite receiving a 28.9 per cent pay rise, the real-terms value had been eroded. With a 2.5 per cent offer for next year below inflation rates, many saw their actual purchasing power declining.

The cost of the strikes to the NHS has been significant. Five-day strikes cost approximately £240 million, with cumulative healthcare strike losses since 2023-24 reaching £1.7 billion.

This confrontation matters politically because it reflects a broader pattern: the government appears willing to abandon its previous commitments when fiscal or political pressures intensify.

Asylum Policy and the Danish Model: Playing Politics with Immigration

Recognising that Reform UK has successfully weaponised immigration as a political issue, the government announced radical asylum reforms. Home Secretary Shabana Mahmood unveiled plans to make refugee status temporary and quadruple the waiting period for permanent settlement to twenty years.

The measures represent the most significant reform of UK asylum policy in modern times. Under current rules, refugees can access permanent settlement after five years. Labour’s proposals would require a twenty-year wait, with status reviews every two-and-a-half years. Those whose home countries become safe could be returned.

Mahmood told BBC: “We have a system that is out of control. It’s unfair, and it’s putting huge pressure on communities.”

The policy borrows heavily from Denmark’s immigration approach, which provides refugees with temporary residence permits typically lasting two years. Critics argue this represents a fundamental shift in how Britain treats those fleeing persecution.

The government frames this as necessary to restore public confidence in the asylum system and prevent further support for Reform UK. However, human rights organisations raised concerns about the implications for vulnerable people seeking sanctuary.

Reform UK’s Rising Threat: Why Labour Lost the Electoral Battle

Recent polling data reveals the scale of Labour’s political problem. Reform UK has emerged as the main opposition challenger, with the party trailing significantly in many polls. The latest Ipsos survey showed Labour’s support has fallen to match the lowest level ever recorded by the polling organisation – returning to May 2009 levels.

Reform, under Nigel Farage’s leadership, has successfully positioned itself as the party of change and anti-establishment sentiment. The party has capitalised on frustration with Labour’s perceived lack of boldness and authenticity.

This represents a fundamental electoral threat. If the next election were held, Reform would likely displace the Conservatives as the main challenger to Labour. The shift exposes a crisis in Labour’s political positioning.

Lucy Powell’s election as deputy leader in October reflected growing internal pressure for change. She won with 54.3 per cent of the vote against Education Secretary Bridget Phillipson’s 45.7 per cent. Powell, who had been sacked from cabinet in September, campaigned on a platform of “course correction.”

In her victory speech, Powell said: “We won’t win by trying to out-Reform Reform, but by building a broad progressive consensus.” She emphasised that “people feel that this government is not being bold enough in delivering the kind of change we promised.”

Labour’s Delivery Record: Achievements Amid Controversy

Despite the political crisis, the government has delivered on several manifesto commitments. Understanding these achievements provides context for why the crisis feels so acute – the government has done things but the political narrative has shifted against it.

Healthcare Transformation Attempts

Labour promised to provide over five million extra NHS appointments in its first year. The government has already exceeded this target significantly. The government also recruited two thousand additional GPs, doubling its original target of one thousand. Dental care improvements have included seven hundred thousand extra urgent appointments.

Mental health services received additional investment of £680 million, with six thousand seven hundred additional mental health workers recruited toward a target of eight thousand five hundred. These represent genuine healthcare infrastructure improvements.

However, these achievements have been overshadowed by the ongoing resident doctor disputes and structural chaos resulting from Streeting’s reorganisation plans, which include abolishing NHS England and cutting integrated care board staffing by half – a reduction affecting twelve thousand five hundred staff.

Crime and Policing Initiatives

The government introduced a new Border Security Command to combat illegal migration and established crime taskforces. In just nine months, the new police taskforce achieved a six per cent drop in knife crime across its seven target areas compared to the previous year.

The government also delivered the UK’s biggest weapons surrender, banned ninja swords, and introduced Ronan’s Law to tackle online weapon sales. These measures reflected commitment to the manifesto pledge to halve knife crime within a decade.

The government invested £200 million to recruit three thousand more neighbourhood police and PCSOs, with plans to deploy thirteen thousand extra officers by parliament’s end. Crime and Policing Bill measures introduced new “Respect Orders” to ban persistent offenders from town centres and provided police with enhanced powers to seize vehicles involved in antisocial behaviour.

Employment Rights and Worker Protections

The Employment Rights Bill, introduced within Labour’s first one hundred days, represents one of the government’s most substantial legislative achievements. The bill aims to deliver “the biggest upgrade in employment rights for a generation.”

Key provisions include ending exploitative zero-hour contracts by introducing guaranteed hours and requirements for shift notice. The bill protects workers from “fire and rehire” practices and establishes new trade union rights. Implementation began in autumn 2025 with phased rollout continuing through 2026 and 2027.

The bill also created mechanisms for a Fair Work Agency to enforce minimum wage laws, sick pay, holiday pay, and employment agency licensing – representing a significant strengthening of worker protections.

Defence and National Security

The government announced the biggest sustained increase in core defence funding since the Cold War. On 25 February 2025, Starmer committed to increasing defence spending to 2.5 per cent of GDP by 2027, with aspirations to reach 3 per cent in the next parliament.

The Strategic Defence Review accepted all sixty-two recommendations, including commitments to develop at least six new munition and energetics factories with a £1.5 billion investment pipeline. The government committed to building up to seven thousand long-range missiles and twelve SSN-AUKUS class submarines. Plans also included a £15 billion investment into the Astraea nuclear warhead programme.

Additionally, the government delivered the biggest Armed Forces pay rise in over twenty years, created the first independent Armed Forces Commissioner, and brought thirty-six thousand military homes back into public ownership.

The Winter Fuel Payment Disaster: How Early Decisions Created Lasting Damage

In July 2024, Rachel Reeves announced that winter fuel payments would be means-tested. Pensioners not receiving pension credits or other means-tested benefits would lose the payment – typically worth between £250 and £600 annually.

The decision sent shockwaves through Labour. The policy had not been publicised in advance, had not appeared in the election manifesto, and caught MPs unaware. Constituents described being “furious and, in some cases, deeply worried.”

Fifty-two Labour MPs, including seven ministers, refused to participate in the parliamentary vote on 5 September 2024. Jon Trickett voted against the government. At the Labour Party conference that month, delegates voted against the policy in a non-binding ballot, sending a clear message of internal opposition.

By May 2025, facing poor approval ratings and threats of rebellion, Starmer announced a U-turn. He promised to expand eligibility for winter fuel payments, though without specifying how much or for whom. The policy represented an early warning sign of the government’s vulnerability to internal pressure.

Clean Energy Ambitions: Progress Against Headwinds

Labour’s commitment to making Britain a clean energy superpower includes creating Great British Energy – a publicly-owned clean power company with £8.3 billion to invest over the parliamentary term. The government aims to deliver zero-carbon electricity by 2030.

The manifesto promised to double onshore wind, triple solar power, and quadruple offshore wind by 2030 to achieve ninety-five per cent of energy from renewable sources. Within weeks of taking office, the government lifted the ban on new onshore wind turbines.

However, progress has been modest. The government delivered support for one hundred thirty-one new renewable energy projects in the most recent funding round, but house-building numbers actually declined in the first few months – suggesting that broader infrastructure challenges are limiting progress across multiple policy areas.

Housing Ambitions Stumble: The 1.5 Million Home Challenge

Labour pledged to build one million five hundred thousand new homes within five years. The government implemented mandatory housing targets for local authorities, reviewed greenbelt boundaries to identify “grey belt” land for development, and streamlined planning procedures.

The government also recruited three hundred additional planning officers and introduced compulsory purchase order acceleration measures. However, early data proved disappointing. Housebuilding activity fell to its lowest level in a year by March 2025, with significant regional disparities.

No substantial funding was allocated for social housing construction, though an emergency £200 million fund was created for homelessness. The gap between ambition and delivery has become evident, with broader economic pressures constraining development.

Labour’s Manifesto Missions: The Strategic Framework

The government identified five core missions to guide decision-making: kickstarting economic growth; making Britain a clean energy superpower; taking back streets through crime reduction; building an NHS fit for the future; and delivering a fair deal for working people.

Each mission involves cross-departmental collaboration and medium-term milestones designed to hold ministers accountable. However, fiscal constraints, internal political turmoil, and external pressures have disrupted implementation across multiple areas.

The most visible challenge involves the tension between ambitious missions and constrained resources. Health spending will grow by 2.8 per cent annually in real terms between 2025-26 and 2028-29 – lower than the historic average of 3.7 per cent and substantially below the 6.8 per cent growth during Labour’s previous period in government during the 2000s.

Economic Performance: Mixed Results and Deflated Expectations

The government entered office promising to deliver the highest sustained growth in the G7. Within months, economic growth stagnated during the latter half of 2024. The UK became the fourth fastest-growing G7 economy rather than the fastest.

Employment figures revealed concerning trends. Payrolled employees fell by one hundred seventeen thousand (0.4 per cent) between September 2024 and September 2025. October 2025 saw a further decrease of one hundred eighty thousand on the year and thirty-two thousand on the month, bringing the total to 30.3 million.

The employment rate for people aged 16-64 dropped to 75.0 per cent in the July-September quarter, down from the previous quarter. The unemployment rate rose to 5.0 per cent, above estimates from a year earlier.

Regular pay growth, adjusted for inflation, reached only 0.8 per cent annually in real terms, while total pay growth achieved 1.0 per cent. With inflation at 3.8 per cent and rising, living standards continued to deteriorate for many households.

The Local Election Catastrophe: A Warning Sign Ignored

The May 2025 local elections delivered a devastating result for Labour. The party lost approximately two-thirds of the council seats it had held in 2021. Additionally, Reform UK captured the Runcorn and Helsby parliamentary seat – the first time Labour lost a constituency to Reform, signalling a shift in the electoral landscape.

Labour MPs directly linked these losses to the winter fuel payment cuts and other welfare reforms. One councillor described the experience as a “wipeout” that threatened Labour’s base of local representation.

Despite this warning sign, the government failed to course-correct sufficiently, leading to a cascading crisis of confidence.

The Political Mathematics: A Majority That Becomes a Liability

Labour won the July 2024 election with a majority of 170 seats – described as a landslide despite being smaller than Tony Blair’s 1997 victory. This large majority paradoxically creates vulnerabilities. Backbench MPs from safe seats feel empowered to rebel, knowing that their individual votes matter less for government survival.

Unlike previous governments facing similar rebellions, Labour lacks institutional mechanisms such as the Conservative Party’s 1922 Committee, which historically regulated such challenges. Some Labour MPs openly discussed the absence of any “stalking horse” candidate or clear succession route.

Multiple sources described a “circular firing squad” atmosphere, with even previously loyal Starmerites predicting the Prime Minister might be forced from office before the May 2025 local elections – before the residual authority collapse actually occurred.

Lucy Powell’s Victory: What It Signals About Party Direction

Lucy Powell’s election as deputy leader with 54.3 per cent of the vote represents a clear grassroots rejection of the direction Starmer is taking. Powell, who had been sacked from cabinet in September for criticising government decisions, ran on an explicit platform of “course correction.”

She won endorsements from prominent critics including Greater Manchester Mayor Andy Burnham. Significantly, Powell announced she would not return to cabinet, choosing instead to remain free to speak out from the backbenches.

Her victory speech criticised the government’s perceived lack of boldness: “We must give a stronger sense of our purpose, whose side we are on and of our Labour values and beliefs. People feel that this government is not being bold enough in delivering the kind of change we promised.”

Powell’s specific criticism of trying to “out-Reform Reform” suggested a fundamental disagreement with the government’s strategic direction. She argued for “building a broad progressive consensus” rather than attempting to compete with Reform on immigration and security issues.

The Budget Challenge: Raising £30 Billion Without Income Tax Rises

Facing the withdrawal of the income tax rise option, Rachel Reeves must raise approximately £30 billion through alternative measures. This creates several policy challenges.

Options being discussed include freezing income tax thresholds for two years beyond 2028 (raising approximately £8 billion but affecting middle-income earners), wealth taxes, mansion taxes on properties exceeding £2 million, gambling tax increases, bank levy adjustments, and restrictions on salary sacrifice pension contributions.

Tax experts warned that relying on multiple smaller tax measures would create system inefficiency and economic distortion. The Resolution Foundation think tank chief executive Ruth Curtice observed: “I don’t think they have a clue. They’re making even good news look bad.”

The timing also matters. With inflation predicted to average 3.5 per cent by year-end and unemployment at 5.0 per cent, raising taxes could further dampen economic growth and living standards during a challenging period.

Looking Forward: The Pivotal Test Ahead

The November 26 budget represents a critical test for Keir Starmer’s government. The decisions made will significantly influence public and internal party perception of Labour’s direction.

If the budget successfully articulates a clear vision and raises necessary funds without major political damage, it could stabilise the government’s position. Conversely, if it appears confused, economically counterproductive, or represents further reversals, the pressure for leadership change could intensify.

The May 2025 local elections loom as the next major test. Labour insiders described these elections as potentially “disastrous” for the party, with fears of further losses and erosion of the party’s local government base.

Political reality suggests the government has moved past the immediate crisis of the previous week but remains fundamentally unstable. The authority gap between a 170-seat majority and a government that appears to lack basic political control represents an unusual and troubling governance challenge.

Conclusion: From Landslide to Limbo

Labour’s government has achieved some genuine policy successes in healthcare, crime reduction, employment rights, and defence spending. Yet these achievements have been drowned out by a political narrative of chaos, indecision, and loss of direction.

From a position of overwhelming electoral superiority just sixteen months ago, Labour now faces existential political questions. Reform UK has emerged as a genuine challenger. Internal authority has collapsed. Polling suggests historic lows for Labour support.

The government’s problems are not primarily about policy substance but about demonstrating coherent purpose, political discipline, and effective decision-making. The week of November 10-15 exposed fundamental weaknesses in how government operates at the centre.

What happens next depends partly on the budget, partly on whether leadership challengers emerge, and partly on whether Labour can rebuild a sense of political direction and purpose before the May elections inflict further damage.

For now, a government with a landslide majority finds itself struggling to govern.

Frequently Asked Questions

What is the current state of Labour’s polling?

Labour’s polling has collapsed to historic lows, matching the lowest levels recorded by Ipsos in May 2009. Reform UK has emerged as the main opposition challenger, leading polls in several surveys. Recent polling shows Labour trailing significantly, with Reform UK capitalising on voter frustration with the government’s perceived lack of boldness and handling of immigration.

Why did Keir Starmer reverse the income tax rise plans?

Starmer and Chancellor Rachel Reeves reversed the planned income tax increase just two weeks before the budget due to internal Labour rebellion and political panic. Downing Street feared that proceeding with the manifesto-breaking tax rise would trigger a leadership challenge from MPs. Treasury sources claimed better-than-expected economic data justified the reversal, but observers attributed the decision to political pressure rather than economic circumstances.

What are the main points of disagreement between Lucy Powell and Keir Starmer?

Lucy Powell, elected as deputy leader, has criticised the government for not being bold enough and for attempting to “out-Reform Reform” through immigration-focused policies. Powell advocates for a “broad progressive consensus” and believes the government lacks clear Labour values and purpose. She argues that Labour should compete on its own terms rather than adopting Reform’s agenda.

How much has Labour delivered on its manifesto commitments?

Labour has achieved genuine successes including over five million extra NHS appointments, two thousand additional GPs, a six per cent knife crime reduction in target areas, the biggest Armed Forces pay rise in over twenty years, and the Employment Rights Bill representing the biggest upgrade in worker protections in a generation. However, housing building targets have fallen short, economic growth has underperformed expectations, and several early policy decisions have proven politically damaging.

What will the November 26 budget contain?

Chancellor Rachel Reeves will announce tax measures to raise approximately £30 billion without raising income tax rates. Expected measures include freezing income tax thresholds for two years beyond 2028, restrictions on salary sacrifice pension contributions, wealth taxes, mansion taxes, possible gambling tax increases, and bank levy adjustments. The budget represents a critical test for government credibility.

BySNEHASISH BHOWMICK