Starmer: a wobble to be worried about…

For the first time (yes, it has taken this long…), I am concerned about the direction or, rather, lack of direction of this government. I have always thought Starmer’s ideological pragmatism was to be admired, but the danger is that if bad mistakes blow you off course, there is no path to return to.

A terrible week for Starmer’s government…

This happened big time this week. Amendments to the benefits system which the government tried to drive through parliament to show fiscal rectitude were horribly rushed. Why introduce them now when a comprehensive review of the whole system was in train, reporting in 2026? Rightly, a lack of logic and no attempt to win backbenchers over, meant defeat loomed despite a 165 seat majority. Starmer et al realised this far too late and the amendments to win his colleagues over first diluted savings and then eradicated them. No cost savings now, and the government’s authority and credibility shredded in the process. Nobody doubts the current benefits system is unsustainable, even most Labour backbenchers, but this was not the way to go about fixing it with short-term changes simply to save an immediate £5 billion.

However, for a moment, spare a thought for Rachel Reeves, the Chancellor. She looked terrible in parliament yesterday, barely containing her tears. The cause was explained as a personal matter, but nobody should go through this in public. In PMQs, the charmless Kemi Badenoch alighted on her and Starmer ignored her. It damaged both of them. Starmer made up for it in later interviews, yet it took Mel Stride, Tory Shadow Chancellor, from the Opposition to exhibit genuine sympathy for Reeves’ plight on Sky News this morning. Good on him. Sometimes the toll of public life is too great.

Anyway, back to the issue in hand. Starmer needs to get back to domestic politics full-time. It is understandable that Ukraine, the EU, Putin, Trump, NATO are all hugely time consuming, but you cannot contribute constructively to international crises if you are defenestrated at home.

Starmer needs to lay out a comprehensive map of where his government is heading and, consequently, what the UK should look like in 2029. There needs to be carefully calibrated milestones that the public can identify with to measure achievements. Visible progress is everything if Labour is to head off the populists.

Starmer also better move fast to build relations with his fellow MPs and get off the hook of obsessive fiscal discipline for now which is creating more harm than good through excessive short-termism. He needs to improve his economic understanding to avoid ‘what the markets are thinking’ panic every few weeks whilst at the same time defending Reeves to the hilt. They are joined at the hip whether he likes it or not. If she goes, he is next.

An NHS overhaul, new house builds, planning reform, reviews of the benefits system and social care (the latter taking too long, however), and infrastructure investment are all strong building blocks for recovery in the government’s fortunes. But, Starmer has to get his communications act together and give the vision thing or he could be toast.

And the alternatives are too awful to contemplate…

The US: an increasingly foreign country for Europeans…

I went to Chicago, Boston, and New York last week on business. It included a mock listing for my company, JPES Partners, on Nasdaq courtesy of our partners, eVestment. Thank you. It was fun.

When in the US, focus on the positives such as Nasdaq’s brilliant self-promotion…

I stayed on to see close friends at the weekend. That was fun, too. But they are worried.

The politics of this country is dark, very dark. Like Brexit in the UK, Trump is toxic. Half of the electorate loathe him and are simply embarrassed or alarmed. The other half feel he is a slightly unpleasant necessity. A small minority of course love him but, even amongst the latter, few would want him round for dinner…

Trump’s presidency is sinister, and his presence makes the country increasingly foreign to Europeans. I was warned to take any anti-Trump material off my phone before entering the country as border security could ask to see it and send me home if it offended. What??? Federal institutions are under attack, including the judiciary. Cultural and educational institutions seen as liberal are also under attack or are usurped. Trump taking over the Kennedy Centre and the attempted crushing of Harvard by withdrawing federal grants are just two painful examples.

Trump threatens NATO, bombs Iran, swears at Israel and lies on the international stage. It is too early to address the impact of his chaotic foreign policy, but it is splitting his isolationist supporters. They will bend the knee in the end. They have nowhere else to go. Just listen to the pathetic and vile Steve Bannon grovelling to Trump on the Middle East.

Domestically, Trump also happens to be forcing through a tax bill stripping Medicaid from 16m Americans whilst shovelling cash to the rich. Shame on the Republican Party.

Yet, the Democrats in response are hopeless. Either stunned into inaction or busy in-fighting. A new generation of activists believe a lurch to the Left is the solution to Trump with Democrats in New York electing a privileged self-described socialist to be their candidate for mayor. Take note, you muppets. Corbyn’s experience in the UK should be a guide. It may feel good, but you will never win elections nationally from this position. Voters are mostly centrist, and your failure to offer a decent alternative to Trump re voters’ core concerns handed him victory in the first place.

Trump was underestimated, and the US Constitution overestimated. Checks and balances feel illusionary. Against this background, I know many Europeans who have withdrawn from holidaying in the US until Trump has gone. Public life has become too wild. My response? I walked past Trump Tower on 5th Avenue, forgetting to look. You just have to focus on the belief that Trump will never define this country, whatever current damage this man does. Just ignore him and keep on walking…

Nice to be home, though.

‘Logical’ Conservatism is the way to defeat populism

As writer of this blog, I have to make a confession. I am a member of an organisation that represents an extremist minority in UK politics. It is called the Conservative European Forum (CEF) which amongst other things represents pro-EU Conservatives…

It believes the Conservative Party should anchor itself on the centre-right and no further, focusing on strong relationships with our European partners, economically and in relation to defence. Add to that respect for institutions of state, social liberalism but supporting family structures in whatever form they take, fiscal prudence but always aiming for lower taxes when they can be afforded, aspiration, a comprehensive but fair (to everyone) social security net to name a few other beliefs and you have the best of a Conservative Party that has today lost its bearings.

The CEF held a breakfast with Matthew Parris this week. The conversation took a gloomy turn…:

  • The Conservative Party is heading to a dead end chasing Reform
  • Kemi Badenoch is underperforming (a polite summary) and her leadership is time limited
  • The main thing saving the Conservative Party is the LibDems failing to, not wanting to, or being unable to move to the Right to finish it off once and for all
  • The route to redemption is sweeping away the recent past, regaining a reputation for economic competence. It is always the economy stupid, never immigration or cultural wars
  • That now is the time to be unpopular, advocating cutting unsustainable debt, in the process and in particular, rebalancing policies away from older voters to younger ones
  • The Party doesn’t get any of this except point two…

Rebalancing economic policies, indeed even focusing on them at all, will inevitably be hugely unpopular to the few remaining Conservative Party members let alone some Conservative inclined voters, but absolutely logical and necessary. It is needed early in this parliament to sow the seeds of redemption, even whilst understanding it will be a long road back to power over more than one election cycle, whoever is leading the Party.

Neither show the understanding or commitment to defeat populism

Which takes me to the Labour government’s spending review yesterday. One can applaud capital spending but the actual or imminent retreat on the winter fuel allowance, sickness benefits, the two children policy whilst refusing to increase core taxes is fantasy economics. There is a consensus Rachel Reeves is safe in her job for now but a UK debt crisis is around the corner if we are not beaten to it by the US.

Moderate politicians are being frequently thrashed by populists because they have promised too much and under-delivered for too long. Labour’s sums don’t add up and the lack of clarity in the overall message means it remains disappointingly business as usual for this centrist government.

If the Conservatives could have a serious, logical conversation about the huge pressures facing public expenditure and what hard, unpopular decisions need to be taken to correct the trajectory, they could start to regain a reputation for economic competence, expanding their voting base from the cul-de-sac they find themselves in now.

Sounds logical but more pain is required before such a path to recovery is taken. All on the assumption the patient doesn’t expire in the meantime…

US teeters on the economic brink…

The Trump presidency is a roller coaster affair, even worse than most pundits feared. You can’t argue it isn’t box office, though, perhaps deliberately so. The long expected blow-up between Trump and Musk is pure theatre.

A relationship made for theatre…

However, there is one constant. The state of the US economy and its grotesque burden of debt. On this issue, Elon Musk is correct.

The budget deficit was an incredible 6.4% of GDP in 2024. Forecasters expect this to rise above 7% in every year of Trump’s presidency. The US debt pile currently exceeds 120% of GDP. This is unsustainable.

When Scott Bessent, the US Treasury Secretary, has to reassure markets that ‘the US is never going to default’, you know there is real trouble brewing.

Trump’s big, beautiful tax bill will remove the debt ceiling. Its impact is expected to add US2.4 trillion of additional debt over the next decade. The evidence is clear. Tax cuts mainly for the better off, never pay for themselves.

Add to this tariffs cutting growth, fears over Trump’s presidency undermining the rule of law and unpredictable foreign policy initiatives in the face of geopolitical instability, and you have a recipe for economic disaster.

Longer-term US interest rates are rising, exacerbating the debt problem whilst the US dollar weakens.

Trump’s economic approval ratings are dire, but these are not yet in territory to undermine his populist presidency. He continues to play out his hugely risky economic experiment. Republican fiscal conservatives must be turning in their graves, for that is where most of them are.

Bill Clinton was the last president to balance the budget. Rather than set up his own party, perhaps Elon Musk should change sides and vote Democrat…

Meanwhile, on this side of the pond it is a key week for the Labour government as it announces details of its spending review. More on this later but if it is not ‘big, beautiful and bold’, you would have to ask what is the point of Starmer/Reeves et al.

Starmer is improving all the time but will get little credit

Managing Trump relatively successfully, a US/UK trade deal, a UK/India trade deal, a new compact with the EU. Despite the devil being in the detail, Starmer should get a pat on the back.

Being PM is a thankless task…

He won’t, of course. None of the above will get the UK back to a pre-Brexit nirvana. They barely get us to the starting line, and few voters will see any immediate impact.

The narrative has been set. All mainstream politicians are useless at best, dissembling voters to hide their inadequacies. Starmer is no exception.

Reform, according to many voters, tells it as it is. Excessive political correctness, an interfering state, too much immigration that Labour lovies secretly like. Then, the government cosies up to Europe, selling the fisheries industry down the river, so to speak.

Just a reminder on the latter, the fisheries industry contributes 0.03% to the UK economy. 70% of agricultural output is sold to Europe. This has been made immeasurably easier because of this week’s deal.

But in a world of populism, there is little rational debate. Scare tactics, yah-boo exchanges, and downright lies dominate debate, not facts.

For Starmer, what can he do? Very little. It will be a hard slog to the next election. He will need to prove NHS waiting lists are falling, immigration is falling, and the economy is growing with tangible benefits, including an increase in housing supply.

It would help if he had a clearer philosophical narrative. This blog likes his non-ideological pragmatism, but it makes it harder to explain the ultimate destination he is trying to reach.

However, he has one major advantage. The increasingly haplessness of today’s Tory Party. Starmer will be able to differentiate himself much more clearly from Reform at the next election than in the days when it used to be a competitive race with the Tories.

Until then, it will be an uphill, thankless battle. Who would go into politics?

Keep calm and carry on… for most…

The UK election results this morning are putting a smile on Nigel Farage’s face. A by-election win for Reform in Runcorn (by 6 votes), winning the mayoralty in Greater Lincolnshire and a slew of council seats to come.

This portrait of Nigel Farage in the National Portrait Gallery says it all… for now…

Labour is on the back foot, but they held on to the mayoralties in North Tyneside, the West of England and Doncaster. They should not panic over the success of Reform any more than the main parties might have done when the LibDems surged in by-elections. It has been a grim first year for the Government. A misjudged first budget, economic headwinds everywhere leaving little money to improve public services, all exacerbated by Trump’s tariffs have provided a terrible backdrop to these elections.

However, whilst this blog predicts further success for Reform, they are close to peaking, loathed by a large majority of the electorate. Labour, despite the uninspiring but broadly competent leadership of Keir Starmer, is close to bottoming.

We are, as the Greens put it, in a period when most votes are being more evenly split between five parties. This will lead to erratic and dramatic election results, but Labour is still in the strongest position by far to win the next general election. Excitable journalists should remember there is still four years to go.

The party who should panic is the Tory Party. It has totally lost its way, stands for nothing and speaks to nobody. Its audience has drifted and is drifting off to the LibDems to the Left and Reform to the Right.

There is a clear conclusion from these results.  Kemi Badenoch is not up to the job. Fearful of the Right, she shamefully pursues culture wars when there are much more important issues to address and define her party.  Why are Tories Tories? It is the economy stupid. Small government, taxes extracted from the public with real justification or not at all. It is the Party of aspiration not prejudice.

Running after Reform’s agenda has been and will continue to be a disaster, take note, Robert Jenrick. The Conservative Party probably needs James Cleverly as leader to buy itself some time, but to do what? To get back to first principles, not letting others to define it. It is that simple but do the Tories have the understanding or the appetite to do this? There is no evidence so far, and until the Tories wake up and release themselves from their obsession with Reform, they have no future.

Republicans cower to Trump; they will suffer the consequences in the end…

Donald Trump once said: ‘I could stand in the middle of Fifth Avenue and shoot somebody, and I still wouldn’t lose any (Republican activist) voters, OK?’

Economically, Trump has done just that. Tariffs everywhere. The end of globalisation as we know it. A potential worldwide recession, higher inflation, the breakdown of traditional Western alliances. It is all in the melting pot, and the President of the United States doesn’t care. He is bulletproof, so to speak.

A President out of control…

He has always been in favour of tariffs, taking out advertisements back in the 80s supporting the concept, combining it with disgust at paying to defend countries he deemed could afford to protect themselves. He may have a point on the latter issue, but American defence companies have made a fortune in the process.

Nobody can say they didn’t know what they were electing with Trump. Except… there are no policy analyses in presidential elections. None of his views were ever really tested in debate. For example, the economic jingoism of tariffs resonates with ordinary Republican activists/voters and many others besides but not the realities/practicalities. Such rashness would always be tested in a UK General Election campaign. Just ask Theresa May and her 2017 social care proposals.

Professional Republican politicians, Reaganites if you like, who were brought up believing in free-trade, NATO, and Western democratic values have been swept aside by far-right, isolationist MAGA activists who have taken over the GOP and terrified them into silence.

Cowardice prevails. Janan Ganash of the FT at my company’s annual investment seminar back in November warned Trump, with no re-election pressures, would be unleashed. There seems to be no checks and balances amongst Republicans, professional or otherwise on his actions.

Trump today means what he says. Tariffs, Greenland, the Panama Canal, a bromance with Putin, a third term. He is serious about them all.

Republicans created this monster or, rather, failed to stop him. Whether it be a global recession or a carve up of Ukraine just to start with, they will own the grim consequences of a president who is out of control.

No morality: the world has become a marketplace

Civilised democracies’ opponents sadly now include America in addition to Russia and China. There is no longer such a thing as the West and Western values.

Everything can be bought under Trump. Threats and bribes will decide the outcome of any negotiation. There is no morality, no commitment to democratic values. Autocratic strength is paramount, and the new competitive bromance is between Trump, Putin, and Xi.

Simply an appalling President, tearing up Western values

A Sky News commentator years ago warned that Trump and his acolytes wanted the world divided between these powers without any guiding principles except the acquisition of power and money. Autocrats rule, the weak are crushed, and red meat and lies are thrown at voters to keep them acquiescent, that is, if voters exist at all. It seems this is the case.

This blog has already torn up one 2025 prediction that Trump would be better than expected. He is worse. Far, far worse. Surrounded by immoral (no longer amoral), ideological operators a clear political, anti-democratic agenda is unfolding.

The vile Vice President Vance was a disgrace in front of Zelenskyy and has insulted European democracies and the actions of their soldiers in previous wars. The Defence Secretary, Hegseth, clearly a moron, participated in leaked secret plans for a military strike in the Middle East on an unprotected online platform. An anti-European group chat of senior Trump Administration officials, oh, and the Editor-in-Chief of The Atlantic magazine by accident. Any resignations? No, just obfuscation and a wholly unfounded attack on the journalist to try and discredit him to hide the scandal.

Then we have Musk. In charge of DOGE (a new department to improve government efficiency – actually not a bad concept if done properly), he is totally out of control. Randomly firing government employees, he bizarrely finds time to support far-right extremists across Europe.

Finally, we have a US President, yes, a US President, praising Russia and its leader Putin, threatening Canada and Greenland, insulting Europe, and planning to carve up Ukraine like Hitler and Chamberlain did with the Czechoslovakia Sudetenland or Stalin and Hitler did with Poland. This is not an exaggeration. It is that serious.

The upside? Europe and other countries with clear democratic principles are uniting to manage their future without the US and possibly NATO. Long overdue.

Americans are either supportive of Trump or seemingly oblivious. The Democrats are impotent, hopelessly directionless, and wholly responsible for Trump’s victory.

The consequences of Trump’s actions are hard to contemplate. But one thing is for sure. The world is becoming an amoral marketplace with everything for sale. Democracy is scorned, and American voters should be ashamed of what is being done in their name.

No morality: the world has become a marketplace

Civilised democracies’ opponents sadly now include America in addition to Russia and China. There is no longer such a thing as the West and Western values.

Everything can be bought under Trump. Threats and bribes will decide the outcome of any negotiation. There is no morality, no commitment to democratic values. Autocratic strength is paramount, and the new competitive bromance is between Trump, Putin, and Xi.

Simply an appalling President, tearing up Western values

A Sky News commentator years ago warned that Trump and his acolytes wanted the world divided between these powers without any guiding principles except the acquisition of power and money. Autocrats rule, the weak are crushed, and red meat and lies are thrown at voters to keep them acquiescent, that is, if voters exist at all. It seems this is the case.

This blog has already torn up one 2025 prediction that Trump would be better than expected. He is worse. Far, far worse. Surrounded by immoral (no longer amoral), ideological operators a clear political, anti-democratic agenda is unfolding.

The vile Vice President Vance was a disgrace in front of Zelenskyy and has  insulted European democracies and the actions of their soldiers in previous wars. The Defence Secretary, Hegseth, clearly a moron, participated in leaked secret plans for a military strike in the Middle East on an unprotected online platform. An anti-European group chat of senior Trump Administration officials, oh, and the Editor-in-Chief of The Atlantic magazine by accident. Any resignations? No, just obfuscation and a wholly unfounded attack on the journalist to try and discredit him to hide the scandal.

Then we have Musk. In charge of DOGE (a new department to improve government efficiency – actually not a bad concept  if done properly), he is totally out of control. Randomly firing government employees, he bizarrely finds time to support far-right extremists across Europe.

Finally, we have a US President, yes, a US President, praising Russia and its leader Putin, threatening Canada and Greenland, insulting Europe, and planning to carve up Ukraine like Hitler and Chamberlain did with the Czechoslovakia Sudetenland or Stalin and Hitler did with Poland. This is not an exaggeration.  It is that serious.

The upside? Europe and other countries with clear democratic principles are uniting to manage their future without the US and possibly NATO. Long overdue.

Americans are either supportive of Trump or seemingly oblivious. The Democrats are impotent, hopelessly directionless, and wholly responsible for Trump’s victory.

The consequences of Trump’s actions are hard to contemplate. But one thing is for sure. The world is becoming an amoral marketplace with everything for sale. Democracy is scorned, and American voters should be ashamed of what is being done in their name.

What is the point of a Labour government?

In one word: competence. There has been such a shortage of it from UK governments in recent years that justifying this attribute would be enough.

What we don’t need is ideology. It led nowhere for Labour under Corbyn in Opposition and led the country over the cliff under Johnson/Cummings and Truss. Add in a lack of ideological compromise over EU membership, leading to Brexit, and the disaster of such an approach is clear.

Competence over ideology should be the point of this Labour government

In recent times, perhaps only Margaret Thatcher made ideology work. But she was competent, the country was badly off course, and her free market ideology often cloaked a good deal of compromise.

Over the pond, Trump, with his tariffs, DOGE, and embrace of strongmen/billionaires, represents a sort of anti-democratic philosophy that may also take his Administration over a cliff. One hopes so, although the consequence of Europe having to finally stand up for its own defence provides some compensation.

But back to the Labour government. It seems to be gradually finding its feet, and not just in international relations. Only Labour can reform the NHS and benefits system free from the charge of hard-hearted malice. Tackling unsustainable disability benefits and stripping the not fit for purpose NHS of some of its bureaucracy by abolishing NHS England is a good start to proving its ideological flexibility.

Prior to that, cutting the international aid budget to pay for increases in defence expenditure again strikes a blow for practicality over principle. Labour from the centre-left got away with it lightly. Even the Tories could not disagree.

Governing is messy. Unpredictable events drive the best laid plans off course. Competing priorities means good government has to compromise. Competence is everything, and that alone will dictate voters’ impressions of whether Starmer and co. deserve a second term.

There is so much more to do. Further NHS reform, changes to the planning system, initiatives to make the civil service and local government more efficient are all badly needed and now. This government needs to go further and faster but not with the burden of ideological certainty.

My betting today is that Labour will win the next election with an increased share of the vote but a sharply reduced majority. This is a similar prediction to that made by Jacob Rees-Mogg at a Spectator magazine meeting I attended! We shall see, but in the face of such hopeless Tory Opposition, they should do.

Today, it feels like a successful Labour government is the only barrier to highly damaging polarised politics washing up on our shores.