Starmer has built his vision on stability – but the riots could undermine all that, writes Eliot Wilson
“Every commitment a Labour government makes will be based on sound money and economic stability.” That was one of the fundamental tenets of the Labour Party’s election manifesto. Sir Keir Starmer had torn into the Conservatives again and again – with some justification – for chaos, internal divisions and inconsistent policies, and promised that a government he led would be the opposite. Outside 10 Downing Street on the day he was appointed prime minister, he told the electorate he stood for “stability and moderation”.
The waves of violent disorder which have convulsed the country since the end of July have been the antithesis of the image Starmer sought to present. The government’s overriding priority must, of course, be restoring and maintaining law and order, but there has to be some consideration given to the effects the rioting has had on the economy and Britain’s international reputation.
It is no surprise that retailers have seen a significant decline in footfall. The British Retail Consortium and the Federation of Small Businesses have both appealed for help for their members, arguing they will need support from local authorities, financial institutions and insurance companies. This is to be expected: not only have the riots seen incidents of looting and destruction, but retail and hospitality outlets have limited their hours, and customers are simply avoiding potentially dangerous areas.
A broader and more complicated problem is the signal the violence sends to the wider world about Britain’s inherent stability and attractiveness as a destination for investment. Labour made this a prominent campaign issue, arguing that “investment in the UK is too low”. It anticipated dealing with planning regulations, infrastructure and business taxation, but Starmer and his ministers cannot have foreseen something as elemental as widespread violence and destruction of property in towns and cities across the country.
In a way, the full horror of this was encapsulated by foreign governments advising their citizens not to travel to the United Kingdom or to exercise caution if doing so: Malaysia, Indonesia, Nigeria, the United Arab Emirates, Australia. It would be hard to overemphasise how unusual this is for a country like the UK.
More worrying for the prime minister is that polling suggests his management of the crisis is leaving voters unconvinced. A YouGov survey reported that half of respondents thought Starmer was handling the riots badly, with only 31 per cent judging his performance positively. Yvette Cooper, the no-nonsense home secretary, fared little better, with 43 per cent thinking she was dealing with things badly and only 23 per cent thinking she was doing well. By contrast, just over half of those surveyed were positive about the performance of the police.
The government has two priorities which are closely connected and interdependent: it must see that law and order is restored and the violence curtailed, but it also has to achieve this while instilling a sense of confidence in itself and in the ability of the British state to carry out basic functions. While the short-term political motivation is understandable, this has been made harder still by Labour’s relentless branding of “broken Britain”. It is very difficult to spend five years arguing that the nation is falling apart and then suggest that there has been dramatic improvement within five weeks.
The FTSE 100 and 250 have both fallen noticeably since the end of July, wilting under a combination of poor global economic indicators and anxiety about the rioting here. The international media has taken notice of what is happening, even if it is sometimes baffled by the details. There is an obvious likely outcome: if you have a major investment decision to make over the next six months or so, as a corporation or an entrepreneur, the UK has suddenly slipped down your list.
On 30 October, the chancellor, Rachel Reeves, will unveil her first Budget. The ground has already been prepared for tax rises and cuts in spending and investment. That will cause concern in the financial world, but it cannot co-exist with ongoing anxiety about fundamental political stability. Unless the violence really has peaked, the government has a narrowing window to restore order and demonstrate that it has a firm grip: in short it must show that it is in control and can make long-term plans.