What to watch as UK party conference season begins

THE UK’s annual party conference season is always a major part of the political year, akin to the US presidential conventions. This year’s events are even more important than usual, as Labour’s landslide victory in July has resulted in huge business interest in the party.

Given that Labour might now be in power for a decade, many more senior executives of big UK and international companies are attending this year’s conference, which begins in Liverpool this coming Sunday (Sep 22). Private sector sponsorship of the event will probably be the highest ever, too.

Unsurprisingly, Labour activists will be in a jubilant mood at the party conference, the first since 2010 that sees the party in power. However, beneath the joy, political storm clouds are gathering – only two full months into government.

On Oct 30, Chancellor of the Exchequer Rachel Reeves is set to deliver a tough annual Budget statement – the first fiscal event by a Labour government in a decade and a half.

Ahead of that, surveys this month have shown a sharp fall in favourability for both Reeves and Prime Minister Keir Starmer. This suggests that the modest “political honeymoon” that the party enjoyed in July and August may have evaporated.

In an Ipsos poll last week, only 32 per cent viewed Starmer favourably – down six percentage points from August, and less than half of the rating that Tony Blair had at this stage of his prime ministership in autumn 1997. Back then, Labour’s political honeymoon stretched significantly longer.

Unfavourable views of Starmer, meanwhile, were held by 46 per cent – a rise of eight percentage points, matching the highest level of negativity previously recorded for him. That was after the 2021 by-election in the Northern English town of Hartlepool, which the Conservatives won from Labour with a swing of almost 16 per cent, very nearly prompting Starmer to resign as Labour leader.

The Ipsos polling does not include voting intentions. But a More in Common opinion poll earlier this month, which did ask this question, recorded Labour’s lead as having fallen to just four percentage points.

Labour led with 29 per cent, followed by the Conservatives with 25 per cent, Reform UK with 18 per cent and the Liberal Democrats with 14 per cent.

Reframing before tough moves

The arrival of party conference season, with the House of Commons now in recess, comes at an opportune time for Starmer.

With his leadership conference speech on Sep 23 and Reeves’ address on Sep 22, the government has an opportunity to reframe the political narrative against the Conservatives, ahead of a series of difficult moments in the coming months.

Top of the list is the Oct 30 Budget, which will almost certainly see significant tax rises and spending cuts. This is after the government, upon assuming office in July, conducted an audit that uncovered a fiscal black hole of more than £20 billion (S$34.2 billion) – an assertion hotly disputed by the Conservatives.

The government already faces mounting political criticism for its decision to cut winter fuel payments for all but the poorest pensioners. These payments, which help to offset energy bills, were introduced by the Blair government.

As well as making major tax-and-spend decisions, Reeves might also amend debt targets to which she has previously pledged to stick. Known as fiscal rules, these were self-imposed by the government to manage its borrowing within a five-year timeframe. Changing the framework would give the government more room for flexibility.

While the likely Budget moves are not yet known, Starmer and Reeves have clearly decided to frontload the political pain of difficult fiscal decisions in their first year in office.

The calculus is that this will lead to better economic times in the second half of the 2020s – ahead of the next UK election, which is likely to be in 2028 or spring 2029.

As Reeves has said: “The prize – if we can bring stability back to our economy, if we can bring investment back to Britain – is economic growth, good jobs, paying decent wages in all parts of our country, to realise the huge potential that we have.”

In the hands of others

While Starmer would like to keep his political destiny in his own hands, it in fact rests significantly in those of others: the other two big UK parties – the Conservatives and Liberal Democrats – plus potentially the new, insurgent Reform UK, which won its first seats in July.

The Conservatives will choose their next leader in early November, just before the US presidential election. The party’s choice of candidate, from a remaining pool of four, will help decide how fast it gets back into power.

The early front-runners are seen as being former communities and local government secretary Robert Jenrick as well as former trade secretary Kemi Badenoch. Then there is former foreign and home secretary James Cleverly, the only one of the four to have held any of the great offices of state; and former immigration minister Tom Tugendhat.

When the Conservatives were last in opposition from 1997 to 2010, the party chose a succession of leaders with mixed effectiveness. Their earlier choices, William Hague and Iain Duncan Smith, did not make great gains; it was Michael Howard and David Cameron who later moved the party back to power.

Especially if the Conservatives choose a leader who proves ineffective, Reform UK, with its populist policies, could be a major political influence in coming years.

This is made more likely as its leader, Nigel Farage, has proven himself to be one of the most effective UK politicians of recent decades, including through co-leadership of the Leave campaign during the 2016 Brexit referendum.

The centrist Liberal Democrats have also re-emerged as a significant UK political force, winning many seats from the Conservatives in July. One key post-election question for party leader Ed Davey is his stance towards the Labour government, which has a huge majority. He has so far been a critical friend, but this may change if Labour becomes more unpopular.

Taken together, this year’s party conference season comes at a pivotal moment in the UK political cycle. The events will frame the lead-up to the Oct 30 Budget – potentially the most important fiscal event for years.

The writer is an associate at LSE IDEAS at the London School of Economics