Reality Sets In

Starmer's Labour must prepare to do business with a Trump White House

Towering Columns

At UnHerd, Tom McTague asks whether Trump’s victory may provide a warning signal that Labour should pivot to more working-class concerns.

Fundamentally, many in Starmer’s No.10 believe that their “project” to remake the Labour Party, which started in opposition, is only half finished. To complete it, the party needs to develop far less instinctive sympathy with the kind of progressivism Harris represented — and far more sympathy with the ordinary concerns of Middle England. If the Labour Party is to be more than a Biden-style interregnum between periods of conservative rule, they believe, the party needs to be shaken out of its comfort zone on many of the issues which cost Harris in the election, from immigration to the wider “woke” wars dominating the post-mortems now being written about why her campaign failed.

…If anything, Trump is far more powerful today than he was in 2016, and we in Europe are far weaker. Trump won an undisputed electoral mandate, backed by a likely Congressional trifecta and a more radical, coherent and thought-through ideology developed by organisations such as the Heritage Foundation. Europe, in contrast, looks lost and leaderless, weakened by war and geopolitical competition, and no longer comforted by the idea that Trump is just a passing threat. In Germany, the government is broken and likely to be replaced within months, its economic model ruined by the loss of reliable energy from Russia and high-end manufacturing competition from China. In France, Emmanuel Macron is a shadow of the self-appointed Trump whisperer who bestrode the world stage in 2016. And in Britain, Starmer already looks weakened after the struggles of his first 100 days in office.

The question at the heart of all this, then, is whether there will be an emergence of Trumpism here in the UK, much as Thatcherism went hand in hand with Reaganism. The conditions that gave rise to Trump are, if anything, more pronounced here than in the US: with record levels of immigration, years of economic failure and a growing sense that the British state is in some fundamental sense broken beyond repair.

The Economist’s Bagehot explains how a decade of middle-class wage compression is undermining the social contract.

Being middle class and on a minimum wage has specific perils. In a progressive tax system those who earn less, pay less. But when graduates are badly paid, this deal turns to dust. From April the threshold for paying back a student loan (£25,000) and the minimum wage on a full-time job will cross over. The result is that any graduate with a full-time job, whether that be stacking shelves in Tesco or training as a lawyer, will face a de facto marginal tax rate of at least 37%. Britain has developed a bizarre tax system based on age (pensioners are exempt from national-insurance contributions) and education (graduates take home less money). If history shows anything, it is that creating a group of people who are overeducated and overtaxed can lead to funny things.

Should voters begin to gripe about wage compression, it would mark the end of the closest thing to a free lunch there has been in British public policy. The minimum wage is the most successful policy intervention of the past quarter-century, argues Nye Cominetti of the rf. Usually policies have pros and cons. The pros came (wages went up for the hitherto badly paid) but the cons never seemed to arrive (unemployment was barely affected). As a result, successive governments, both Conservative and Labour, jacked up the minimum wage at almost every opportunity, like monkeys in a laboratory hooked up to an opium dispenser. But the political consequences of wage compression cannot be dodged forever. When Mr Cominetti recently appeared on Radio 5, a broadcaster, to extol the virtues of a higher minimum wage, an angry lorry driver preceded him. “What’s the point in you working extremely hard if you can earn almost the same just doing minimum-wage jobs?” he asked. An alliance of lorry drivers and doctors would be curious but potentially powerful. Pay compression is not popular so much as little-noticed, at least for now. Politicians confuse equality with fairness at their peril.

Politics is less about where people are in the pecking order than where they think they should be. Graduates who work in non-graduate roles are more likely to vote for radical-right parties than their peers in graduate jobs, point out Ben Ansell and Jane Gingrich in a useful paper that does away with the idea that degree-holders in the West are a monolithic blob. The “never made it” are as much of a problem as the “left behind”. Perhaps Britain is happy to be a little more socially democratic. Those in the middle can swallow lower wages in the knowledge that it might make Britain more competitive. They can comfort themselves with the fact that those at the bottom are better off. Maybe their earnings will improve in later life. For many, however, wage compression brings only the realisation that the trappings of a middle-class life—such as a degree, a profession or a job saving turtles—are insufficient compensation for a salary that places them on the lowest rung. That is not where they expected to be.

In The Times, Juliet Samuel questions the assumptions made by Westminster City Council when costing plans to renovate its failing heat network.

The council had…shortlisted the new jumbo heat network, Swan, that ministers were trumpeting. The inclusion of Swan on the basis of Aecom’s modelling “felt massaged”, says Pitt Ford. The model assumed Swan would benefit from renting out the old gas boiler building, a windfall inexplicably not included in modelling the cost of small individual boilers. Pitt Ford also spotted that Aecom, in addition to advising Westminster on the PDHU, was separately working for the government developing plans for the Swan. This seemed to him a conflict of interest. A spokesperson for Aecom stated that its models used “the government-standard approaches… developed over more than a decade”, that Westminster is in charge of the shortlist, not Aecom, that it “has no preference, financial or other interest in PDHU connecting to Swan or any other system”, that it finished its work for Swan “earlier this year” and that “any suggestion or claim that Aecom has been conflicted during either of these projects is entirely false”.

As anyone can see, it is not necessary to be a conspiracy theorist to harbour grave doubts about this whole project. It is true, as net-zero advocates tend to argue, that the UK is full of crumbling infrastructure and that fixing this requires investment, climate or not. But sceptics are right to worry that the policy agenda is driven by grandiose, pie-in-the-sky ideology rather than humbler, slower and more practical ideas. Going flat to flat putting in electric boilers may not be exciting, but it stands a chance of addressing residents’ urgent problems quickly, eventually reducing gas consumption and sticking vaguely to the original cost estimate.

Heat networks, meanwhile, might be a great option in areas blessed with a surplus of waste heat and ample space to install them. But the notion that anyone is going to find a fast and cost-effective way to dig a brand new network of pipes through several miles of central London bedrock and use them to transport heat from a completely unproven new energy source around the capital’s most prestigious buildings is frankly demented. Or, as Aecom puts it, in true net-zero parlance, “trailblazing”.

At Compact, Leila Mechoui shows how younger Canadian voters are swinging to the right, challenging the assumption that Anglosphere electorates will move ever further leftwards.

Recent surveys point to a decisive conservative turn among Canadian youth. The important Léger poll, conducted between Sept. 20 and Sept. 22, shows that 47 percent of the 18-34 age group would vote Conservative in the next election, a proportion that outstrips both the 35-54 and over55 cohorts. As these figures suggest, Canada may well be the first OECD country to create a youth population more right-wing than its older generations. If young voters alone were to elect Canada’s next government today, they would make Conservative leader Pierre Poilievre prime minister and grant his party full control of Canada’s federal government.

Already, the trend is transforming Canadian politics. One important example is the recent provincial election in British Columbia, one of Canada’s wealthiest and—previously—most left-wing provinces; its capital, Vancouver, is notorious for severe drug-abuse issues and its application of “harm-reduction” policies to address them. An election challenging provincial Premier David Eby and the ruling NDP was held on Oct. 19. After more than a week’s delay due to the need for a recount, Eby was re-elected, narrowly beating the local Tories, led by John Rustad. As part of his election platform, Rustad promised to close all “safe-injection” sites and to reverse drug decriminalization. In the past, Rustad was also critical of Covid vaccines and restrictions, and voiced opposition to “gender-affirming” surgeries for children. Rustad only took control of the province’s Conservative Party 18 months ago, and catapulted from polling just 2 percent to becoming the official opposition leader. His success will likely inspire the right across the country.

…External changes may concretize this conservative momentum. Worldwide demographic and economic shifts mean that the mass immigration Canada has experienced over the last few decades may slow or even reverse. The expense of a large public sector could become unsustainable if Canada’s economy, heavily reliant on finance, insurance, and real estate, undergoes a correction. Social-policy choices made during this period will have a significant impact on the nation’s future. A decrease in immigration, combined with a strained state budget and rising social conservatism, may result in a more decentralized and limited government. Canada’s rising youthful conservatism will be bolstered by the Trumpian political climate in the United States, which has a huge influence on Canadians. To be sure, various factors could lead to a reversal of some of the rightward momentum on display. However, we may be witnessing an important and long-term shift in Canada and perhaps across North America that, at the very least, calls into question the assumption that the rising generations would continue to push our societies further left.

At The Liberal Patriot Substack, Dustin Guastella and Jared Abbott say Vice-President Kamala Harris failed to embrace a politics of class, instead prioritising identitarian cultural causes.

Already figures in the Democratic orbit are claiming that Harris lost as a result of sexism or racism. David Axelrod, top advisor to former president Barack Obama, was unequivocal in his post-election analysis: “Let’s be honest about this. Let’s be absolutely blunt about it: There were appeals to racism in this campaign, and there is racial bias in this country, and there is sexism in this country.” Prejudice no doubt persists as an ongoing challenge, but its existence just doesn’t hold up as an explanation of last Tuesday’s results. According to AP Votecast, Harris’s support among black voters was 8 points lower than Biden’s (a drop from 91 percent to 83 percent), and she performed remarkably poorly among Latino voters. Indeed, early indications suggest that Trump may have actually improved his vote share among Pennsylvania’s Puerto Ricans. That’s after weeks of media elites and progressives trying to hang Tony Hinchcliffe’s “island of garbage” joke around Trump’s neck like an albatross. And while Kamala won women overall, Trump actually carried working-class women.

These demographic breaks just do not comport with the official progressive narratives about race and sex. They indicate that an entirely different social cleavage has rent the nation. It’s the class divide. Democrats have become the party of high-earning, big city professionals and they just cannot speak to, speak like, or even understand, working-class concerns. To change that they must first recognize it. And to do so they need to retire the theory of politics that says that the party must run people of this or that ethnicity, or must run a woman, or must run a gay man, etc. A class theory of politics would scrap the petty tribalism that dominates so much of liberal analysis and instead focus heavily on the real social divides in American life. It would see that the reason Harris underperformed in nearly every single county relative to Biden cannot be the mysterious work of white supremacy or patriarchy but instead must be, at root, economic.

Keep in mind Democrats still need unions. One of the fateful decisions made by the Clinton-era New Democrats was to pull the party away from the labour movement. Clinton’s disastrous decision to sign NAFTA combined with party insiders' belief that dynamic emerging constituencies would be able to replace blue-collar voters in the Democratic coalition, while a new donor class could displace the unions’ institutional support for Democrats. These decisions, combined with broader economic shifts, helped weaken the influence of labor in American political life. Working-class associational life has shrunk overall but it has also changed, labour unions in small towns have been replaced by NRA gun clubs for example, marking a distinct political drift rightward. The Teamsters' much publicized decision to sit out the election likely helped contribute to Harris’s defeat, but it was itself the result of the clear distance union workers, and even labour officials, now feel from the Democratic Party despite their obvious shared economic interests.

In The Critic, Miriam Cates says politicians are incentivised to avoid difficult problems because they have low expectations of voters’ ability to understand trade-offs.

All of these problems have potential solutions. We could reform health and social care funding to include an element of private insurance. We could reduce spending and shrink our national debt. We could thin the forest of regulation that all but prevents private sector investment in infrastructure. And we could reform our welfare system to support child rearing rather than worklessness.  None of these remedies would be easy to swallow, but they are the only antidote to inevitable decline. Yet there seems to be no British political party in 2024 that is willing both to face up to Britain’s prognosis and offer honest treatment.  In recent years, our political elites have had their heads in the sand, refusing to discuss topics such as immigration, family breakdown or the costs of net zero. Populists on the other hand have shown courage in acknowledging the concerns of ordinary people, but have taken the easy option, telling people what they want to hear. In its 2024 manifesto, Nigel Farage’s Reform Party promised to eradicate NHS waiting lists in two years, a commitment as unachievable as it is laughable. 

So why do our political leaders have their heads in the sand? There is certainly an element of ignorance; few in Parliament or the media understand the economic implications of a collapsing birth rate. But the main reason politicians avoid proposing unpopular policies is self-evident. In a democracy, popularity is the only show in town…

…For a long time now, politicians and the media have had very low expectations of what the public can understand. Government through soundbites and an over reliance on short social media posts to explain new policies have led to gaps in voters’ knowledge. Judging by my own experience of knocking on doors and corresponding with voters over the last five years, most people do not know that the state pension is paid for by current tax payers. Most people think that a low birth rate is a good thing. Many people think that the government should borrow more money. Most people thought Covid was many many times more deadly than it actually was. When the electorate doesn’t understand the problem, they will not vote for the right solution. No householder with a patch of damp will fork out for a new roof unless they’re convinced that there’s no other option to save their home. 

Wonky Thinking

For Policy Exchange, Professor Richard Ekins, Sir Stephen Laws and Dr Conor Casey assess the distortive impact of the Human Rights Act on UK law since 1998 in 25 major cases.

The Human Rights Act 1998 has undoubtedly had a major impact on how the UK is governed and on the way in which many important questions about public policy have been resolved. Since October 2000, when the Act came into force, British courts have been required to consider questions that would never previously have been put before our courts – questions that would otherwise have been thought to be political questions, unsuited for determination in the course of judicial adjudication. The way in which British judges have answered these questions has, of course, varied over time and from case to case, partly in response to shifts in judicial temperament, the choice of litigation tactics on the part of the parties, and the vagaries of the case law of the European Court of Human Rights.

The structural features of the European Convention on Human Rights and the Strasbourg Court’s case law inevitably generate uncertainty, raising questions ill-suited for consideration by any court – and not traditionally considered by our courts. The general indeterminate nature or ambit of many of the rights recognised in the Convention is aggravated by the insistence by the Strasbourg Court that the Convention is a “living instrument” that should be given a dynamic or evolutive interpretation, thus bringing within its reach matters that would not have been thought to have been embraced when its provisions were ratified, and by the insistence that the rights conferred must be practical and effective, rather than theoretical or illusory. In practice, this has been used to generate rights and obligations not conferred explicitly or by necessary implication. The ambit of Convention rights, as understood and applied in the Strasbourg Court’s case law, is thus often uncertain and may develop in entirely unexpected and novel ways.

This instability is part of the problem of how the Act impacts on the workings of our legal system. It is no answer to concerns about the Act to point to the cases in which the courts have not used their new statutory powers to second-guess Parliament’s reasoning and choice or to hamstring government policy or to invent new, cumbersome legal obligations. The constitutional dynamic that the Act sets in motion, and the structural features of the Strasbourg Court’s case law, means that there is now always a risk that European or domestic courts will break new ground, or undo a past settlement, in response to litigation that is often politics by another means.

The impact of the Human Rights Act 1998 on British public life and government is a vast topic. Its study cannot be limited to the case law alone, which is voluminous, but must extend also to the ways in which anticipation of litigation distorts policy making and legislative deliberation. Policy Exchange’s Judicial Power Project has considered this dynamic in some of our past work and we intend to examine the wider phenomenon in more detail in future work. However, it is true and important that much can be learned from the case law itself, not only from what one case, or line of cases, reveals about the new judicial dispensation but also from the sheer volume of cases, which confirms that human rights litigation has become a major feature of legal practice and, relatedly, as the courts themselves have recognised, of political agitation by means of litigation.

This paper contributes to the study of the impact of the Human Rights Act by picking out, from each year of the Act’s operation, one striking case that illustrates some of the problems to which the Act gives rise. The main body of the paper is an analysis of each of these twenty-five judgments, set out in chronological order, an analysis which aims to be intelligible to the lay reader while still providing the technical detail that is necessary to understand what the court decided and to see why there is reason for concern about the mode of decision and/or its practical consequences.

Before considering each case in turn, the paper begins by placing the Human Rights Act in historical context, noting the significance of the changes over time in how it has been understood and applied. The paper then explains the grounds for selecting the cases in question. It then goes on briefly to summarise – in two or three lines – each of the twenty-five cases, before outlining some of the problems that they jointly illustrate, problems that concern the framework within which important decisions have been made and the drawbacks in the reasoning by which they have been made.

These twenty-five cases, drawn from across the years in which the Human Rights Act has been in force, help explain why many jurists have long argued that the Act unsettles the UK’s constitution and distorts its government. This paper aims to enrich future public deliberation about the merits of the 1998 Act – about the case for its amendment or repeal – by improving public understanding about the impact that the Act has had in our courts and thus, by extension, on government and Parliament. In thinking about human rights law reform, parliamentarians, lawyers, civil servants, and members of the public should consider how the Act has operated in practice, a process of reflection which will be greatly aided by close engagement with the twenty-five cases that this paper profiles.

On Inequality.org, Max von Thun and Daniel A. Hanley argue that global governments need to prevent the domination of AI by Big Tech giants.

While there is a lot of unwarranted hype surrounding the technology, recent advances in AI are impressive, and, if harnessed in the right way, could help society solve complex problems and boost our shared prosperity. However, the structure of the market — the actors that have control over the development and deployment of AI — will determine whether AI lives up to its promise or entrenches the power a few dominant corporations already hold over our lives.

At first glance, the recent explosion of new AI products and services could make you think the field has robust competition and that there is a fertile marketplace for new businesses to establish a foothold and grow. But this is largely an illusion. 

While competition ostensibly exists in this booming industry, it is rapidly being foreclosed by the largest incumbent technology giants: Microsoft, Google, Apple, Amazon, Nvidia, and Meta. 

These dominant corporations, which already maintain an iron grip over essential aspects of our digital lives — including smartphones, internet search, online shopping, and social networking — are using their raw financial power and control over critical systems to monopolize the AI industry, exclude or co-opt competitors, and deepen the “walled gardens” that keep consumers locked into their services.

As we detail in a recent report published by the Open Markets Institute and the Mozilla Foundation, these corporate behemoths are already the primary owners and suppliers of key AI inputs and infrastructure, including cloud computing, frontier AI models, chips, and data.

To ensure they maintain and extend their dominance into the AI era, these companies are engaging in a variety of unfair business practices. Consider cloud computing, which provides the raw computational power and server capacity needed to train and host advanced AI models. Microsoft, Amazon, and, to a lesser extent, Google currently control a combined two-thirds of the global cloud computing market.

Through their market control and practically unlimited financial resources, the tech giants are rapidly co-opting many of today’s most promising AI startups, such as OpenAI and Anthropic, by giving them capital and preferential access to computational resources. 

The giant firms are also using their control over digital ecosystems to lock consumers and businesses into their AI services, Google has integrated its “Gemini” AI model into its search engine and Meta has started infusing AI into Facebook and Instagram. 

AI is set to dramatically reinforce the power of Big Tech — unless governments step in. Fortunately, AI remains in its nascency, and policymakers still have time to act. 

Governments around the world, including the European Union, the United Kingdom, and the United States, have access to a vast set of tools to prevent AI from becoming Big Tech’s playground. Whether through antitrust enforcement that forces tech giants to split up their digital empires — preventing them from neutralizing challengers through partnerships and acquisitions — or common carrier rules requiring them to provide fair access to their digital infrastructure, regulators already have many of the tools they need to guarantee open and fair competition in AI. 

Book of the Week

We recommend Peter Hopkirk’s The Great Game: On secret service in high Asia. The author’s highly acclaimed book is the definitive account of Britain and Russia’s struggle for intelligence supremacy in central Asia.

The first of the Tsars to turn his gaze towards India was Peter the Great. Painfully conscious of his country’s extreme backwardness, and of its vulnerability to attack - largely the result of the “lost Mongol centuries - he determined not only to catch up, economically and socially, with the rest of Europe, but also to make his armed forces a match for those of any other power. But to do this he desperately needed vast sums of money, having emptied the treasury by going to war with Sweden and Turkey simultaneously. By a happy coincidence, at around this time, reports began to reach him from Central Asia that rich deposits of gold were to be found there on the banks of the River Oxus, a remote and hostile region where few Russians or other Europeans had ever set foot. Peter was also aware, from the accounts of Russian travellers, that beyond the deserts and mountains of Central Asia lay India, a land of legendary riches. These, he knew, were already being carried way by sea on a massive scale by his European rivals, and by the British in particular. His fertile brain now conceived a plan for getting his hands on both the gold of Central Asia and his share of India’s treasures.

…It was not for another forty years, however, until the reign of Catherine the Great, that Russia once again began to show an interest in India, where the British East India Company had been steadily gaining ground, principally at the expense of the French. In face one of Catherine’s predecessors, the pleasure-loving Anne, had returned all Peter’s hard-won gains in the Caucasus to the Shah of Persia (hardly in keeping with Peter’s supposed will) on the grounds that they were draining her treasury. But Catherine, like Peter, was an expansionist. It was no secret that she dreamed of expelling the Turks from Constantinople and restoring Byzantine rule there, albeit under her firm control. This would give her fleet access to the Mediterranean, then very much a British lake, from the Black Sea, still very much a Turkish one…

Quick Links

GDP grew just 0.1% in Q3 of this year, with GDP per head actually falling.

The Assisted Dying Bill was published. It plans to compel courts to grant applications for euthanasia provided they are persuaded there is no “external” pressure, removing discretion from judges.

The UK experienced higher permanent migration inflows last year than any other developed country.

The Chancellor said the UK must “reset” its trading relationship with the EU.

The Energy Minister failed to rule out importing subsidised wind turbines from China.

Flat owners may face a £66,000 bill to replace a heating system in Pimlico with one that is net zero-compliant.

Meta’s Large Language Model has been superseded by a Chinese model to become the world’s best open-weight LLM.

A graduate with a full-time job on the minimum wage will pay a 37% marginal rate of tax as they commence student loan repayments.

Ofsted has proposed replacing one-word assessments of school performance with a larger system of evaluation.

The Education Secretary said schools should focus less on exams and more on “wellbeing”.

US President-elect Donald Trump is considering offering the UK a deal to exempt it from wide-ranging tariffs.

A teacher at an Islamic Sunday school taught children about jihad and boasted about lying to police, a court was told.

The US economy is now 50% larger than the whole EU economy combined, while 16 years ago they were neck-and-neck.

The Government announced the closure of the Office for Place.

British-made Typhoon jet production has nearly stopped due to lack of demand.

Ministers will intervene in the running of Tower Hamlets after mismanagement by mayor Lutfur Rahman.

Only 49% of voters think most people receiving benefits are in genuine need.

The UK deindustrialised significantly even when energy prices were low.

72% of Somalis live in social housing.

An Israeli government report listed Britain as the country most affected by a rise in anti-Semitism.

A county lines drug dealer avoided deportation to Nigeria due to claims made under the ECHR.