Two misguided years
Every government makes mistakes. The skill lies in making fewer of them than your predecessors, and in having the good grace to acknowledge the ones you do make. The present Labour administration has, in under two years, assembled a catalogue of errors that would be impressive in a decade.
In July 2024, Labour broke faith with pensioners and withdrew Winter Fuel Payments from millions of poor and vulnerable pensioners. Cuts to winter fuel allowances were by far the least popular early policy from the government, and despite effectively reversing this decision in 2025, the damage had already been done.
The Budget of October 2024 delivered a rise in employer National Insurance contributions from 13.8% to 15%, accompanied by a reduction in the threshold at which employers begin paying from £9,100 to £5,000. The Office for Budget Responsibility forecast that approximately 76% of the employers' NICs increase will ultimately be passed on to employees in the form of lower wages, which is to say, it is a tax on working people delivered via the intermediate step of taxing their employers first.
The Chancellor herself, in her Budget speech, appeared to say that extending threshold freezes would hurt working people, and then proceeded to do exactly that in the following year's Budget, breaking her own stated reasoning.
Labour's proposed changes to inheritance tax on agricultural assets, dubbed a ‘tractor tax’ drew mass protests across the United Kingdom from November 2024 onwards. The plan to restrict full agricultural property relief to the first £1 million of farm assets, in a sector where the land itself may be worth many multiples of that, while the family's annual income might not reach £30,000, had a quality of Treasury abstraction that is recognizable to any student of the genre.
The original threshold was ‘a cock-up from the start’ as critics observed, designed to close a loophole for wealthy land-investors but manifestly capturing the very farmers it purported to exempt. After months of protest, the threshold was raised to £2.5 million, with couples able to pass on up to £5 million in qualifying assets. The NFU expressed relief. The government expressed no embarrassment.
The Employment Rights Act 2025, a 350-page document, repealed the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016, among a great many other interventions in the labour market. The original pledge had included day-one unfair dismissal rights for all employees, a provision that caused such alarm among those responsible for actually employing people that, following pushback from the House of Lords, the government retreated to a six-month qualifying period. This is the legislative equivalent of announcing you intend to abolish gravity and then settling for a modest reduction in it. A right to ‘switch off’’ a Code of Practice that would have regulated contact between employers and employees outside working hours was quietly shelved in March 2025. One imagines the irony was not lost on those drafting it late on a Friday evening.
Having spent years in opposition denouncing welfare cuts as an assault on the vulnerable, Labour discovered in government that the welfare bill has an unfortunate tendency to grow. It proposed reforms to disability and incapacity benefits, modest by any objective measure, only to find its own backbenchers in open revolt.
In July 2025, Keir Starmer abandoned these welfare reforms under pressure from his own MPs. Then, in a move of breathtaking fiscal generosity, Starmer caved to his backbenchers again in November 2025 and scrapped the two-child benefit cap, at a cost to taxpayers of around £3 billion per year. A government that cannot reduce spending but can always find reasons to increase it is not governing; it is simply administering an auction.
Few diplomatic episodes in recent memory have combined strategic incoherence with such enthusiasm as the agreement to hand sovereignty of the Chagos Islands to Mauritius and then pay approximately £35 billion over ninety-nine years to lease back a military base that was already ours. Donald Trump described the arrangement as ‘an act of total weakness’ and withdrew American support, leaving the deal in suspended animation.
Mauritius, which had been promised the islands by February 2026 and had already made arrangements with India over mineral rights, found its government on the brink of collapse. The Chagos affair demonstrated that it is quite possible to conduct foreign policy in such a way as to please nobody, not one's allies, not the inhabitants of the territory concerned, not the legislature, and not even the incoming American president.
Despite victims calling for a statutory national inquiry into grooming gangs, Keir Starmer used his Labour MPs to block one for six months before being forced into a U-turn, with an inquiry announced in June 2025. The episode combined political misjudgement with moral obtuseness in a ratio that is difficult to achieve accidentally.
In November 2025, Rachel Reeves announced large increases to business rates for pubs. Labour partially reversed this plan, though the majority of pubs will still face substantially higher bills. The partial retreat was presented as listening to concerns. The intention to ban outdoor smoking in pub gardens retreated under heavy fire from an industry that sees more than one pub a day closing down.
In September 2025 Labour announced plans to introduce mandatory Digital ID. After months of pressure, Labour announced in January 2026 that the scheme would not be mandatory. The interval between the announcement and its modification was short enough to raise questions about whether the policy had ever been thought through.
The pattern that emerges from this catalogue is not one of ideological radicalism but of something in some ways more dispiriting: a government that announces policies without fully working out their consequences, and then retreats from them when the consequences become apparent to others.
By the end of 2025, a majority of 2024 Labour voters believed the government was doing a bad job on ten of fifteen tracked issues, with criticism highest on taxation, the economy, and welfare benefits. Governments that disappoint their own supporters so comprehensively, so quickly, tend not to recover. The British public is patient, but it has a long memory for being told one thing and delivered another.
One wishes the new administration well. One simply notices that wishing appears, at this stage, to be doing rather more of the work than governing.
Madsen Pirie