Keir Starmer struggles to fix morale at ‘weird’ Labour conference

Labour’s conference in Liverpool should have been a celebration: the party has not held a gathering in power since Gordon Brown was prime minister in 2009 and its landslide election victory was secured less than three months ago.

Instead, many delegates were subdued, their confidence in Prime Minister Sir Keir Starmer shaken by a decision to axe winter fuel payments to 10mn pensioners, and swirling rows over his acceptance of free clothes and backbiting among his senior staff.

A non-binding vote in the final hour of the event that led to delegates voting against the winter fuel measure — held while Starmer was 3,000 miles away in New York — brought the awkward gathering to a painful end.

Starmer had already made it clear he would ignore any defeat on the issue, but the rejection of his £1.5bn cut — dubbed “austerity mark II” by Unite union leader Sharon Graham — summed up the tetchy mood at the Liverpool conference.

“The mood is weird,” admitted one party veteran over a pint at a dockside hotel. A cabinet minister said the low-key atmosphere on the Mersey was inevitable, given the serious fiscal position the party had inherited: “It’s a serious mood for serious times.”

One of Starmer’s main jobs was to revive morale in the party after a week of dismal and distracting headlines over clothing donations to cabinet ministers and chief of staff Sue Gray’s pay.

The prime minister flew out of Liverpool to attend the UN General Assembly in New York on Tuesday, shortly after addressing the conference and in effect delivering a simple message to his party: “Trust me.”

Health secretary Wes Streeting told the Financial Times he believed Starmer had regained control of the narrative over the week, making a speech that combined vision and hope with “gritty” reality. “The party was lifted by a real vision of the future,” he said.

But much of that future will include painful choices to be unveiled by chancellor Rachel Reeves in her Budget on October 30.

In private, senior party figures were less positive. “Once the Budget is out of the way, we’ve got to put some hope out there,” said one former cabinet member.

Another party grandee said: “People, policy and presentation all need to be fixed. They will fix it but it’s taking longer than it should. They are on a learning curve — I hope this is salutary.”

Mark Williams, a 65-year-old party member, said he had been disappointed by the series of “unforced errors” made by the leadership over the past two months, and many members felt “dazzled and confused about what this government was doing”.

Starmer’s speech dwelled heavily on the trade-offs he says are inevitable as he tries to “fix the foundations” of the economy, including fiscal discipline and an acceptance that growth will require housing, prisons and pylons to go up across the country.

But he also stressed his working-class roots, his determination to restore Britain to “working people” and his insistence that he would address all of these trade-offs in “a Labour way”. 

Reeves is under pressure to flesh out that promise in the Budget. Higher taxes on the wealthy — to balance the cuts to fuel benefits to pensioners living off £13,000 a year — are seen as inevitable.

Reeves’s speech was the most significant of the week and also holds open the promise of a Budget that will appeal more to Labour members than the gloomy talk of fiscal retrenchment.

“Growth is the challenge and investment is the solution,” she said, hinting at changes to her borrowing rules in the Budget that will allow the government to beef up capital spending across the country.

But the Budget is many weeks away and the ensuing political vacuum — exacerbated by a lack of grip at the heart of Starmer’s Downing Street — has generated tensions and grumbling around the bars and windowless conference rooms of Liverpool.

On Wednesday, Unite leader Graham received the biggest round of applause when she declared: “I do not understand how our new Labour government can cut the winter fuel allowance for pensioners and leave the super-rich untouched.”

Liz Kendall, work and pensions secretary, defended the policy. “We were faced with a £22bn black hole, which the Tories left, we had to act.”

The union unrest over winter fuel payments is also manifesting itself in ongoing pay disputes: While Reeves was speaking on stage on Monday, nurses rejected a 5.5 per cent pay offer and other public sector unions are likely to push Starmer in the coming years to restore the value of their pay.

Business leaders, some of whom stumped up £3,000 a head to attend a “business day” on Monday, are also grumpy about Starmer supposedly talking the economy down and preparing a tax raid.

Some felt they did not get value for money from the event: “They were greedy and now people are complaining,” said a director of a financial services company.

Business people said that the event had too many people — 500 compared with about 200 last year — and that there was a lack of engagement with senior politicians, for example through roundtables.

Against this edgy backdrop, post-election celebrations were muted, with the notable exception of a packed karaoke party attended by cabinet members, MPs and advisers, which ran into the early hours of Wednesday. “We really needed it,” said one Labour adviser.

By the time the traditional Red Flag anthem was sung at noon on Wednesday and the curtain came down on this strangest of party conferences, many of the partygoers — like Starmer — were nowhere to be seen.