‘If voters aren’t better off by the next election, we’re screwed’: Labour insiders voice fears over budget

In the days since Labour’s annual conference, party insiders have been sharing a word cloud produced by the pollsters More in Common, which shows the phrases voters most associate with Andy Burnham.

Such polling is rarely flattering for politicians, and the prime minister’s version had its fair share of negatives. But one of the most prominent words in the cloud – and the one that has caught the imagination of Labour strategists – was “trying”.

At a cabinet away day at Chequers on Monday and a meeting for special advisers on Thursday, the idea that the government was doing its best to improve people’s lives – despite the difficult economic backdrop – was a golden thread.

“The public think the only person that can reach those levers is you,” said a government insider. “They justifiably ask, can you do it or not? And if not, they’ll look for an alternative. We have to avoid the sense of things being out of our control.”

A party strategist said: “Voters don’t want us to put our hands up in despair; they want us to roll our sleeves up. They don’t want us to be helpless in the face of global stuff; they want answers.” But will this prime minister be able to provide them?

At conference, Burnham set out his big vision for the future – on social care and the pensions triple lock, the EU and electoral reform. The party faithful lapped it up and polling suggested the “Burnham bounce” had continued.

But while Labour MPs are relieved to have a leader with a clear political direction, many worry that offering big promises for after the next general election will not be enough to scratch the itch for dramatic change.

Downing Street believes part of the answer is what it describes as “everyday fixes” – cost of living measures that might not, on their own, amount to very much, but added up can make a difference and show the government is trying.

Overseen by the No 10 policy unit and the Cabinet Office’s cost of living taskforce, each department has “incubators” where proposals are dreamed up. Many are in the works, such as rules around car-parking apps and unbranded school uniforms.

They might not grab the media headlines, but strategists say they pick up engagement online, with 85m views across all social platforms last week alone. There will be more announced in the two-and-a-bit weeks running up to John Healey’s first budget on 28 October.

“We want to show we can tackle the everyday frustrations that people assume are part of life,” one adviser said. But several admitted they had some qualms about the drumbeat of small interventions.

“We risk looking twee, frankly, if we aren’t successfully thinking about how to tie it to the bigger picture of structural change. Public control, tax, that is what we want to be able to point to as well as the everyday things.”

Another added: “We need to tread carefully. We have very small interventions now and huge ambitions for three years’ time. We also need medium-scale changes in the medium term, and that is what is missing at the moment.”

The government faces a difficult budget, with inflation and soaring borrowing costs as a result of the Iran war thought to have blown a £12bn hole in the public finances, forcing the chancellor to consider tax rises and spending cuts to fund plans to ease the cost of living.

The statement, which is expected to be “low key”, will focus on fiscal devolution, with a household support package centred on cutting energy bills and more help for small businesses. Next year’s spending review would require more revenue, sources said, but details would have to wait.

A No 10 aide said: “The budget is a moment of peak attention and potentially peak peril. We’re not able to do everything we want to, so we have to level with people and say we can’t fix everything all at once, but we’re trying.”

But for some MPs, there is a growing nervousness at the low level of ambition at this budget, especially on cost of living measures, which the Burnham government has made its main test.

One said: “If voters aren’t better off by the next election, we are screwed. As things stand, this looks like a Reeves budget with better vibes. I hope this isn’t all there is. But I really fear that actually it is.”

Treasury insiders acknowledge the need to “kickstart” longer-term changes at the budget – and that a “low-key” statement with the big decisions put off until next year may not be enough for the public. “The budget will be our first punch in the face moment,” a government aide said.

There was a “bit of friction” between the prime minister’s office and the Treasury over balancing fiscal responsibility with hope, the source added. “No 10 wants to signal intent: that we won’t get everything immediately, but we’ll get there.”

There were lingering questions about “how this all adds up when we’re under grey skies”, another adviser added. “It’s impossible to see how anyone can square the additional spending we need given the tightness of the fiscal envelope.”

Ministers and advisers are expecting a barrage of attacks from the Tories and Reform UK on welfare. But they believe the Milburn and Timms reviews, which will be published shortly after the budget – will help them fight back.

Downing Street expects the days after the budget to be “bumpy” but is optimistic that Burnham’s communication skills will help to make the case, and that the public will continue – for now – to give him the benefit of the doubt.

A source said: “We’ll take a bit of a hit over the budget. It’s going to be a tough couple of weeks. But then we have a run to the 10-year plan. If we get that right, we can potentially go into next year with people saying: ‘Yes, it’s difficult, but we trust this guy.’”

At the cabinet away day, Burnham told ministers: “Politics has become too suffocating. We need greater ambition. The country is not where it should be and nothing simple gets us out of that. We need to show a journey and a longer-term plan.”

Ministers were presented with polling that showed support for Labour’s social care policy, including adjusting the pensions triple lock, went up by a quarter after voters were shown a video of the prime minister explaining his plan.

A party strategist told them: “On social care and the triple lock we need to continually make the case, time after time. When we make the case we have the power to persuade.”

There is a political axiom that if you’re explaining, you’re losing. But Labour strategists are pushing back on that idea. The prevailing view inside government is that Burnham is the only one who can go out and make the case – on all of his big promises – to the country.

Not everybody inside the party thinks it will work. “I don’t know how convinced I am about giving people essentially the same message as before: we want to do more but we’re constrained,” one insider said.

But ministers hope that by focusing on policies which signal intent, they can get through these difficult months. “We need more time to lean into the big things we can do, like public control, but we need to be honest with voters. We set ourselves a target of tackling the cost of living, but so many things are out of our control.”

No 10 insight work shows that people were still prepared to accept the Iran conflict as an explanation for why things are so tough, rather than viewing it as an excuse. At the away day, Healey told his colleagues: “We are recognising those pressures, being honest about what we can do and taking practical action wherever possible to give people some breathing space at the budget.”

When parliament returns after conference recess on Monday, Burnham will give a statement, updating MPs on the past few weeks and taking questions. Throughout, he will aim to show the public he is on their side.

But one senior Labour figure cautioned: “We all hope that he has a plan for what comes next. The sense that he gets it and that he’ll keep trying won’t last for ever.”