Labor has had its bad moments, the devaluation in 1949 under Clement Attlee, devaluation again in 1967 under Harold Wilson and the International Monetary Fund crisis in 1976 under Jim Callaghan. But all those crises were largely outside the government’s control.
The unfolding war in Iran is a major external shock, but the crisis Keir Starmer finds himself in is even bigger and more self-inflicted than these three black spots in Labour’s history. Unlike previous prime ministers, Starmer came into office with a weak cabinet and No 10 without a plan, most importantly for growing the economy. Starmer and his chancellor, Rachel Reeves, have failed to generate growth.
Nevertheless, a change of captain is deeply dangerous, even if the local elections are terrible. The bubble will be very excited about whoever is Starmer’s successor, but they really don’t matter much. Starmer is hardworking, honorable and highly intelligent. He may even be improving. And he certainly won’t give up the captain’s bridge without a big fight.
A change of leadership at this point, especially if accompanied by the appointment of a new chancellor in whom the markets did not trust, could prove fatal. Markets are watching fiscal policy like hawks: Andy Burnham’s comments on April 29 about borrowing outside fiscal rules to fund defense spending backfired.
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The government is much closer to triggering a Liz Truss-style financial crisis than it realises. Labor has precious little room for maneuver: the failure to grow the economy and reckless spending decisions over the past two years have contributed significantly to this predicament. A surgical replacement of Reeves by Pat McFadden or John Healey, both of whom would demand respect from the markets, would help strengthen Starmer’s position.
But it would also bring some of the wisdom and experience that is available. Most notably, Tony Blair could be appointed foreign secretary, although it would be difficult for Yvette Cooper who is doing a good job. But at a time of the greatest international danger since the end of the Cold War, having a figure representing Britain recognized around the world, and widely if not universally respected, would transform Britain’s power. He would, if given the job, stand up to Donald Trump and Vladimir Putin: one of his last acts as prime minister before he left in 2007 was to read the riot act privately to Putin, who was pleased to see the back of him.
“Blair has a lot of baggage over all of Iraq,” people said when I wrote about the idea earlier this year. And yes, Iraq still casts a long shadow. But he would not be the first prime minister to return as foreign secretary with a troubled history. The post is unlike any other in government and for most of British history it was a higher position than Chancellor of the Exchequer. David Cameron wielded far more authority internationally when he returned as foreign secretary in October 2023 than was generally thought, and gave a major boost to Sunak’s premiership. Concerns about his baggage, including Brexit and the Greensill lobbying affair, did not become an issue. Alec Douglas-Home returned as foreign secretary under Ted Heath in 1970 with much more baggage, namely his association with appeasement as Neville Chamberlain’s bag carrier at the Munich conference in 1938. Yet he proved an effective and respected foreign secretary for more than three years.
Blair’s return would also help Starmer domestically and give him guidance on how to become prime minister, a subject he has not heard about until now. Starmer would find it very difficult to ignore his advice. Blair would also provide stability and confidence in the markets. For ten years when he was prime minister and Gordon Brown was chancellor, the country saw fiscal prudence and economic growth. It was also the most successful electoral period of the party in its history. Economic success and electoral success go hand in hand.
Why stop at Blair? The old hands, though not enough, are already bringing steel to Starmer’s team. Skills minister Jacqui Smith, Brown’s former home secretary, is proving to be one of the most effective middle-ranking ministers in the Starmer government, while former health secretary Alan Milburn is showing cabinet ministers how to get the job done in his capacity as lead of the review into Neets (people not in education, employment or training).
John Major is the latest senior figure to say the constant blurring of prime ministers is madness and must stop. As prime minister from 1990-97, he was constantly subject to leadership challenges. Now, with the perspective of 30 years of history, he looks like a much better prime minister than his contemporaries thought. Like Starmer, he was diligent and hardworking, but not a stellar communicator. His record in office stands well. Could it be the same for Starmer’s?
Starmer needs to make bold decisions across the board. The best leaders are courageous leaders. Why, at such a time of peril for the country, would Keir Starmer not want to be brave and rely on the brightest and the best?
Anthony Seldon is writing Sunak at Number 10, the next in his series on British prime ministers. But he really hopes he doesn’t write Starmer off at No.10 for quite some time yet
(Further reading: Lame Prime Ministers rarely last long)
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