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Labour senses power amid UK financial turmoil, but work to be done
Published by Jessica Weisman-Pitts
Posted on September 28, 2022
5 min readLast updated: February 4, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on September 28, 2022
5 min readLast updated: February 4, 2026
By Andrew MacAskill and Elizabeth Piper
LIVERPOOL, England (Reuters) – British opposition leader Keir Starmer used his party’s annual conference this week to offer a clear message: this was its best chance to win power since 2010 as the new government’s economic strategy threw financial markets into chaos and the pound crashed.
After four straight general election defeats, the Labour Party is now seen by voters as best placed to run the economy after the government under new Prime Minister Liz Truss unveiled a fiscal programme that triggered a sell-off in British bonds, a sharp fall in the pound and rare criticism from the IMF.
Labour is in a very different place to even a year ago, when battles with leftist supporters of former leader Jeremy Corbyn underscored deep divisions in the party after a punishing election defeat in 2019.
It still has work to do to emulate the kind of sustained support enjoyed by former Labour Prime Minister Tony Blair, who governed for 10 years, and convince the public they and the country will be better off under its stewardship.
There is also more to do to present a clear alternative to the governing Conservatives, who have held power for 12 years partly by portraying Labour as untrustworthy on the economy as it was in power at the time of the 2008 financial crisis.
“We have done hard work in the last two years to change our party, to remake our party,” Starmer told the conference in the northern English city of Liverpool. “We are really a government in waiting and we have a chance to set out our ideas for the country. That confidence is worth its weight in gold.”
Starmer ended his speech at the conference saying this was Labour’s “moment”. However, he acknowledged that voters needed to see the party set out policies that will tackle the array of challenges that Britain faces on everything from a cost of living crisis to the future of the United Kingdom and Brexit.
Labour has surged to the biggest poll lead over the Conservatives in at least two decades following the government’s mini-budget last week when finance minister Kwasi Kwarteng outlined a package of tax cuts and deregulation in a radical shift in policy that unnerved global investors.
Forty-five percent of voters said they would back Labour, compared to 28% opting for the Conservatives, according to a poll by YouGov this week, with the 17-point lead the biggest ever recorded for Labour by the pollster in the more than two decades it has been conducting surveys.
It came as the pound crashed to a record low on Monday after Kwarteng announced a huge increase in borrowing to pay for the biggest tax cuts since 1972.
That has opened a divide with Labour, which has criticised the plan for benefiting the wealthiest and ignoring lower-paid workers and the country’s struggling National Health Service.
Labour is positioning itself as the party of fiscal responsibility and say it stands for “sound money”. Labour has committed to drawing up a long-term growth plan involving less borrowing than the government’s economic strategy.
Starmer’s team, or shadow cabinet, has been told not to make any uncosted policy statements to show the party can be trusted with the public purse, a source close to the leadership said.
‘GREENER, FAIRER’
Under the banner of “a greener, fairer future”, Labour has spent the last three days of its conference unveiling a raft of new policies, from increasing the number of doctors and nurses in the health service to investing in green technology, and school plans to help working parents.
Starmer’s team says the party is now more unified and occupies the centre ground of British politics after it shifted to the left under Corbyn with pledges to nationalise large swathes of industry.
The challenge will now be to unveil a set of fully costed policies while remaining popular.
Andy Burnham, the Labour mayor of Manchester, said the party had only done “half the job” of appealing to voters ahead of the next election that must be held before 2024.
“The opportunity is there, but what we have done so far is not enough,” he said. “We now need to go out that step further and answer that question: what will you do? And we answer boom, boom, boom.”
Almost half of voters say that Labour has not produced a clear set of policy ideas, according to polling from Savanta ComRes.
Chris Curtis, the head of the head of polling at Opinium, said Labour is now trusted more than the Conservatives on most economic issues, such as who is best placed to deal with the cost of living crisis or how to control inflation.
In the last poll before Starmer took over as Labour leader in 2020, Curtis said the party trailed the Conservatives by 39 percentage points when voters were asked which party was best placed to run the economy. In the most recent poll, Labour now has a six-point lead.
But Curtis said the Conservatives still lead on the crucial question about who is best placed to make voters and the country wealthier.
“Labour should make it very clear that they are the party of economic growth,” he said. “The Conservatives just don’t deserve to be ahead on this point.”
Pat McFadden, Labour’s shadow chief secretary to the Treasury, said this was the challenge for the party ahead of the next election. He said the party was already trusted by voters to make the economy fairer and to look after the state-run National Health Service and schools.
“Wealth creation and good public services. Head and heart together. That is how we have to position ourselves when it comes to the next general election,” he said. “If we can do that then we can win the next election.”
(Editing by Nick Macfie)
A cost of living crisis occurs when the prices of essential goods and services rise significantly, making it difficult for individuals and families to afford basic necessities.
The International Monetary Fund (IMF) is an international organization that provides financial assistance and advice to member countries to promote economic stability and growth.
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