Labour: A Party of Nostalgics

2025 has been Labour’s annus horribilis. Large anti-migration protests have swept parts of the country, as the Casey report returned a damning verdict on the surrender of white working-class girls to horrific abuse at the hands of rape gangs largely organised by men of Pakistani heritage. The economy underperformed very modest forecasts, and the Chancellor, Rachel Reeves, has twice come under pressure to resign.

The Deputy Prime Minister, Angela Rayner, did resign. A crucial vote on welfare reform was defeated by Labour backbenchers, forcing a humiliating climbdown. Keir Starmer was revealed by pollsters to be the most unpopular British prime minister since records began and, outpaced by Reform, Labour jostled alongside the Conservatives and the Greens for fourth position in the opinion polls.

Under immense pressure, Keir Starmer’s team got into a vicious and ugly public row with Wes Streeting over suspicions the Health Secretary was launching a leadership bid. For many Labour MPs, it seemed like the last straw. How did a new government with a commanding majority that had cultivated a moderate image end up in a state of near total crisis and paralysis barely a year and a half into its time in office?

The causes are deeper than can be explained by accidental mishap and individual error. Labour’s collapse is as inevitable as the action of continental shelves — a systemic thing of physics and geology, for Labour is now a party without the “Movement” that once sustained it. There is a Labour party, but no longer by the traditional Labour movement.

Not only are there far fewer unionised private sector workers in manual trades, but, where they exist, these workers are no longer voting Labour. Nearly half of Unite members voted Tory in 2019, and Reform is on course to snatch these votes at the next election. Yet Unite has come out against restrictions even on illegal migration and makes no reference to the downward pressure on wages and competition for housing created by mass migration.

These imperatives stem from Labour’s new core constituency — a disproportionately female cohort of public and charity sector workers disconnected from the struggles of workers and small business owners, and heavily invested in perpetuating high government spending, as well as progressive views on gender, race and sexuality.

The constituency that a radical party of the workers should have in the new economy is largely dominated by Reform. It is Nigel Farage’s populist insurgents who are currently shaping a coalition of neglected regions, small business owners, the long-term unemployed and the white working classes.

Where Reform has failed to make headway is in attracting struggling young professionals, who, despite some gains and highly successful social media campaigns, are generally alienated by the nascent party’s crassness and what we may gently categorise as “HR issues”. Filled with anger, this demographic — credited with giving energy to Tony Blair’s New Labour — is instead splitting between the Lib Dems, the Greens and the Conservatives.

Labour gestures towards regaining these voters with the renters’ rights bill and planning reform. But the reason the party has lost so much of the old working class to Reform and young professionals to the other three parties, speaks to its deficit of moral purpose and ideological vision. Labour is not a sober party of government by its nature, and nor is this, a time of deep structural crisis and stagnation, a moment crying out for a steady-as-she-goes administration.

There is no shortage of voices on the left demanding greater radicalism and the bursting of Rachel Reeves’s narrow vision. Yet economic bodice-rippers like Zack Polanski’s Greens do not represent a credible way forwards for Labour. A popular line in the progressive press is that Labour under McSweeney’s influence is obsessed with the threat from Reform whilst neglecting the dissident left threat from the likes of Polanski and Jeremy Corbyn. But beneath the radical anti-chic of homemade placards and Che t-shirts lurks an outlook as intellectually hollow as Starmerism itself.

Reform’s outflanking of Labour is part of a global trend of right-wing populist parties outcompeting the radical left. Centre left parties have succeeded against the odds, often, as in Denmark, by quietly taking a harder line against migration. Yet the populist left has widely underperformed the populist right across the Western world.

There is a simple reason for this. The left has failed to meaningfully respond to the most fundamental economic revolution of our age, that of economic globalisation through new digital technology and the uncontrolled power of free-flowing labour and capital. These forces have undermined the capacity of many nation states to act independently, pulled investment from Western manufacturing and reduced the power of organised labour.

Far from fighting this trend, progressive leaders including Bill Clinton and Tony Blair embraced it in their quest to embrace all things modern, and the left-wing anti-globalisation movement, never terribly effective, sunk into a morass of struggle sessions and intersectionality.

Only populist parties of the right were willing to join the dots of mass migration, offshoring and the undermining of a shared cultural inheritance into a comprehensible message of renewing national sovereignty and restoring a coherent national identity.

Simply ignoring the problem has created an intellectual vacuum from which no useful thought emerges

The Left does not have to accept the terms or solutions proposed by right-wing populism, but simply ignoring the problem has created an intellectual vacuum from which no useful thought emerges. Rather than discussing industrial policy, the corruption of high finance, the evils of digital capitalism or the dangers of cheap labour, the modern left is obsessed with distractions like Palestine, queer politics, ethnic ressentiment and prioritising public sector pay. Even its core “radical” economics fails to develop beyond extreme measures to tax and spend more via wealth taxes and windfall taxes on big corporations and “the rich”.

If Labour (and the left in general) wants to build a more economically equal society with high quality public services, it will have to get serious about confronting the prevailing national and global conditions that make such a model extremely difficult to build or sustain. At the level of public finances this means root and branch public sector reform, building state capacity lost to outsourcing and incompetence, and breaking the hold of public debt and the bond markets.

Ahead of November’s autumn budget, Starmer’s staff briefed that neither Reeves nor he could be removed lest financial markets bring down the government.

A Labour leader kept in place by financiers is such a direct inversion of the party’s identity and beliefs that it is almost hard to describe — yet this is apparently how the party’s leadership sees itself.

More widely, Labour’s great rethink would require working out how to shield the national economy from the peripatetic nature of global investment and labour, with low-skilled millions drawn here by the lure of an unregulated labour market, a generous welfare system and the ease of moving cash outside the country. Much is made of, and some slow action is being taken on, illegal migration and welfare claimants, but the central issue of globalisation itself is not really perceived.

This concerns not just the low paid and those on benefits; it’s equally about the very wealthy turning the nation’s land and housing into speculative assets, their price inflated far beyond the means of British workers, crowding out not only first time buyers, but also those trying to start a business. For 13 years between 2009 and 2022 the Treasury supported the Bank of England’s quantitative easing policy which inflated asset values far beyond that of stalling average earnings.

What of any consequence has Labour ever said about this, the single most socially divisive policy of our times? Does it understand it? If the Bank wanted to revise the policy, would it support it again?

This rent-seeking economy is essentially parasitic on the “real economy” of construction, manufacturing, extraction, energy and trade. Even as the British population has soared over the past two decades, the economy’s energy consumption has fallen by over a quarter, largely because of rising costs (a 250 per cent increase in real terms) creating unofficial rationing, with energy-intensive industries most impacted (and shut down). These costs are in significant part the result of a renewables-prioritising energy policy that Labour has inherited from the Conservatives and, under Ed Miliband, is making worse.

A quarter of working-age adults now draw universal credit, and the tax receipts of London fund the public services of neglected regions whose largest sources of employment are often in the public sector. This model of managed decline and debt-fuelled public spending is unsustainable.

Confronting this reality should be the task of a serious left wing project, but unfortunately the contemporary left cannot seem to escape the alternating dialectic of student identity politics and technocratic managerialism. This is a government that thinks that regulating migration is cruel, but is willing to appear cruel to appease the public.

Where does this leave Labour in the long term? On its present trajectory, it looks set to be a party for ‘70s nostalgics, soft-left technocrats in NGOs, and unionised public sector workers, never reliably commanding more than a fifth of the electorate. As the 2019 toppling of the “Red Wall” indicated, the era of safe seats may have passed.

The almost religious fervour, rooted in the dissident religious politics of nonconformists and Catholics, that characterised old Labour spoke to something deep in the British character. If this energy has departed from the Labour Party, it will eventually find a home somewhere else. That may not necessarily be on the left.

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