Labour MPs can be forgiven for having a spring in their step when they skip happily back into Parliament on Monday
A successful conference in Liverpool last month, where Andy Burnham made the political weather with bold announcements on social care, Europe and electoral reform, coupled with a solid victory over the upstarts of the Green Party in Friday’s Holborn and St Pancras by-election, have put smiles back on faces after the long gloomy Starmer years.
But like any good drama, it is at the height of good “vibes” that disaster strikes. Burnham and his happy MPs return to a difficult in-tray – and right at the top is a daunting government-defining file called The Budget.
Labour MPs may think they see a light at the end of the tunnel. But it may well be a train hurtling towards them.
No 10 is desperate to avoid any suggestion of complacency. A Downing Street source said the Government had a “tough winter ahead” and predicted that Burnham’s honeymoon was already over.
The economic context is inauspicious to say the least. Thanks to the ongoing US-Iran war, energy prices and borrowing costs are up, eating into the Government’s financial buffers and leaving the Chancellor John Healey with less money to play with.
Even more concerning is the mounting spending pressure which the Government faces on multiple fronts.
‘They will bin him in the New Year’
Officials are struggling to find a credible route to the Government’s commitment to spend 3 per cent of gross domestic product on defence. Healey is in a particularly difficult personal position over this, having quit Sir Keir Starmer’s cabinet as defence secretary over funding – putting the pressure on him to now deliver as Chancellor.
Across the whole of government, higher than expected inflation is quietly but inexorably adding cost to departmental budgets.
Against this grim backdrop, some senior Labour figures are privately voicing unease about Healey’s approach to the Budget.
While his conference speech was warmly received by Labour members, government insiders and other Labour figures have questioned the lack of detail on investment and growth, as well as the absence of any obvious pitch-rolling for possible tax rises.
Business leaders who have recently met the Chancellor have privately complained that there is “nothing there” and that they do not find him particularly engaging or visionary.
One senior Labour insider went further, saying: “I fear John is f**ked and they will bin him in the new year.”
Healey faces tricky choices on 28 October, including how to disburse cost of living support, with some people bound to be disappointed.
One Labour MP was exasperated by recent suggestions that energy support will be targeted at households receiving means-tested benefits.
“More help for people that are on benefits, but no help for people that aren’t – we’re going to lose the squeezed middle if we’re not careful,” they said.
Reasons to be cheerful
After enduring chilly unpopularity for much of the time Starmer was prime minister, Labour MPs are once again basking in the warm glow of a healthy poll lead. “When the polls start pulling back in your direction, you feel happier,” one backbencher said simply.
BMG’s last poll for The i Paper at the end of September gave Labour a five-point lead over Reform UK. Not enough to win an election outright, but certainly much better than where they were last year.
Victory over Zack Polanski and the Greens in Holborn was the first serious electoral test of Burnham’s premiership – and proof positive that the jump in the polls is translating into real votes.
MPs who have been in their constituencies for the past couple of weeks say they can sense the “Burnham bounce” on the doorstep. “It feels better in the patch,” one backbencher observed. “People can relate to [Burnham]… he’s a better communicator. The feeling is more positive.”
For many Labour MPs, the willingness to take risks evidenced in Burnham’s conference speech is a bracing gust of fresh air compared to the suffocating caution which they felt had set in under Starmer.
“There’s a very clear difference between him and Keir,” another backbencher said. “Keir was extremely cautious and took a ‘steady as she goes’ view.
“Andy’s come along and basically said, ‘look, the status quo… you all know that this is broken, you all know this is unfair, let’s talk about how we fix it. And that’s brave’.”
There are still a few quiet Starmerites in Westminster. Some ruefully insist that the new regime is benefitting from foundations they put in place, with Burnham announcing several policies which his predecessor had been working on.
A Labour source said: “I know Andy’s good at football but he’d admit he’s a bit of a goal-hanger – great cross Keir now I’ll nod it in!”
There may be trouble ahead
Beyond the economy, Shabana Mahmood is also likely to have a busy return to Parliament.
The Home Secretary is expected at the dispatch box on Monday to address a series of security concerns, including the protection of MPs and other public figures.
It follows the discovery of a dossier of more than 100 high-profile individuals at the home of the man accused of murdering Ann Widdecombe.
The list, found during police searches over the summer, reportedly includes serving and former MPs and peers, including Tory leader Kemi Badenoch.
Yet some of those named – including a Labour MP – were only contacted late last week, prompting complaints from a senior Conservative MP that politicians had been kept in the dark. It is understood that not even the Commons Speaker was given the list of names.
Alongside this, the Home Secretary may discuss her plans to reform indefinite leave to remain. These controversial changes will double the time legal migrants must live in the UK before being granted settled status from five to 10 years and have angered many MPs, including Angela Rayner.
In her Labour conference speech, Mahmood appeared to signal that she was open to changing the proposals.
No final decision has been made, but there is growing speculation she will make an announcement this week after meeting with union leaders.
Talk of early general election refuses to die
Despite all the challenges, No 10 insiders think that Burnham’s new governing machine is working well.
A Downing Street source said that about 100 people knew about the main contents of Burnham’s speech yet the party was successfully able to keep it under wraps.
The Downing Street source said the Government had three years to deliver on the expansive agenda outlined by Burnham in Liverpool – but not all Labour MPs are convinced.
No matter how many times the Prime Minister denies it, speculation about an early election refuses to die.
One backbencher pointed out that Burnham had drawn “battlelines” with his announcements on issues like social care and electoral reform – but then seemingly put off the actual policy changes for years. “It doesn’t feel particularly sustainable to be honest,” they said.
Another MP agreed, saying that Burnham had been “bold” but “quite ambiguous as well”.
“It’s easy to be popular when you’re coming in, saying things that people agree with, and saying ‘let’s have the conversation’. But at some point you have to come off the fence. At some point Andy is going to have to say how are we really going to fund social care?
“You can only be ambiguous for so long, which makes it hard for me to believe that we genuinely are not going to have an election until 2029. Because how long can you string this out for when everyone’s projecting their own hopes on to you, before you actually come off the fence and make a decision?”
At the moment there is little appetite in the Parliamentary Labour Party (PLP) for an early contest. Even with Labour’s regained lead, current polls suggest Burnham would still shed dozens of seats compared to the highwater mark achieved by Starmer in 2024.
But if that lead grows, PLP sentiment – and No 10’s calculus – may begin to change.
“We’re five points ahead now in several polls,” the MP said. “If that climbs to seven, eight, nine points ahead by March, then I think there will be an election in May.”