“Early in 2024, when we were preparing for the general election…I did start to realise that we hadn’t done enough to prepare for government. We got exposed for that” These are the words of Morgan McSweeney, who was until recently Keir Starmer’s top political strategist, on Nick Robinson’s Political Thinking last week.

McSweeney has rightly been credited with both getting Starmer selected as Labour leader and helping him win the election in one term - something many thought impossible. This is an impressive legacy. As Starmer said at his leaving drinks in Whitehall a few months ago, “Morgan is the best strategist in the UK”.

However, McSweeney is right to confront a painful truth: that Labour failed to plan for government properly, a mistake that helped sow the seeds of Sir Keir Starmer’s downfall.

Put simply: Labour were very serious about winning, but much less so when it came to governing. This, more than any of the other mistakes made by the Labour government, has made me genuinely angry. After 15 years in opposition, and with people turning away from mainstream politics, to not be ready to govern is inexcusable.

Because, unlike many other things that have buffeted the government, this was in their control, and the consequences of failing to do it were foreseeable.

It is of course easy for me to say this. I didn’t feel the pressure they did to ‘protect the ming vase’. I didn’t work weekends to pull the plan for government together. And, I didn’t stagger into a department the day after the election victory, high on adrenaline but completely exhausted. I know there were many dedicated, hard-working people in the Labour Party who did the best they could in the circumstances.

I also recognise that there were many factors which made this transition harder than most. Labour had been out of power for 15 years meaning there were few people with memory of government. Their inheritance was challenging: worse than Blair’s on public services, worse than Cameron’s on public spending. And, the civil service had been worn down and depleted.

But the fact remains: it wasn’t enough. So, understanding how we got here and how to do it differently is an important task, especially right now as Labour go through a second transition in government.

Planning to fail

What does planning for government entail? Where did Labour fall short? I would divide planning for government up into three components:

Governing project - A clear governing philosophy, by which I mean a story of what the problem in the country is, what has caused it and therefore what you are going to prioritise to fix it. Embedded in this should also be a theory of power, meaning how the state needs reforming to deliver on this agenda. This agenda should be negotiated to sit alongside the political strategy.

This first dimension should then inform - drive decision making around - the second and third.

Policy and implementation - A set of detailed and thought through policies and reforms, set out ready for the civil service to start delivering on. This should also include things like the proposed structure of the centre for government (how it will be delivered), draft legislation and a first 100-day plan including announcements, media interventions, visits and speeches.

People and culture – A team of people clear on whether they have a job, what their role will be and how they need to work with others to deliver on both the government’s agenda. These people should have received training and mentorship in the roles they will be taking up. They must be clear what the leadership wants from them and be able to speak on the leader’s behalf.

In truth, I think the consensus is that Keir Starmer fell short across all three dimensions.

Starmer famously didn’t have a governing philosophy despite many attempts by staff to pull one out of him. The plans for the centre of government were, as I was told, ‘in Sue Gray’s head’. Senior civil servants reported being aghast at how thin the policy plans were. And, advisors, even in the days after the election, had no idea whether they had a job and what role they were going to be asked to play.

There were exceptions to this rule: people working hard to try to fill the gaps and cabinet ministers who had put aside time to plan in detail. But, let’s face the facts: this is no way to run a new government.

The causes of the causes

If, as Morgan McSweeney argued last week, the key cause of Keir Starmer’s downfall was his government’s failure to plan, what lay behind this failure? Why did it happen like this?

First, Labour took a ming vase approach to the electoral strategy. This meant limiting policy development and ideas in or around the party as they were seen as an electoral liability. As one ex-advisor said to me “under New Labour there were numerous people who saw it as their job to bring ideas in, this just isn’t happening this time round”. This was compounded by Keir Starmer’s personal scepticism of ideas and ideology.

Second, Labour made a choice to pursue the widest possible electoral coalition. This helped Labour win a huge majority. But it required them to avoid difficult trade-offs which have made governing much harder. The most obvious of these was the pledge not to put up taxes (and in particular to back Rishi Sunak’s fiscally irresponsible tax cuts), which immediately confronted the government with either breaking a headline pledge or continuing with austerity once in office.

Third, there was a superstition in the Labour Party about being seen to ‘measure the curtains before they got into office’. They felt that too many times before, notably under Kinnock in 1992, they got close to winning and then had it snatched away from them. This led to a decision to put all their resource into winning, and very little into planning for government. It was very late in the day when teams started planning and with very limited resource behind it.

Finally, whilst there was very powerful electoral leadership in Morgan McSweeney, there was no counterbalancing leadership focussing on governing. For months leading up to the election, when people raised concerns about this, they heard the same answer: “Sue Gray is on the way”. But, this happened far too late, and, for all Sue Gray’s skills and experience as a ‘fixer’ in government, her background was neither in politics, policy or delivery in government.

The other side

The failure of Labour in the UK to take governing seriously was made starker – and frankly more unforgivable - by the contrast with Donald Trump’s victory over Kamala Harris in the US. Trump, and those around him, had learned the hard way what happens when preparation for government is not taken seriously – and they weren’t going to make the same mistake again.

The accounts of Trump 1.0 between 2016 and 2020 are legend. The transition team was almost non-existent. Key government posts went unfilled for months. Members of the Cabinet were fired by tweet. Policies were announced, with no prior discussion, by Trump on live TV. Trump’s agenda, such as it was, was blocked by those around him who joined the administration to do just that.

Put simply: Trump 1.0 was chaos. And the more reflective Trump allies and MAGA thinkers concluded that as a result Trump’s presidency achieved much less than they had hoped (and they felt he was capable of). Out of the ashes of defeat many of these figures came together to plan for Trump 2.0. Their aim was simple: to ensure Trump 2.0 was ready.

This came together in the now infamous Project 2025, housed by the Heritage Foundation, which brought together MAGA friendly thinkers from across 100 conservative institutions to set out a blueprint for a MAGA presidency. It included a policy handbook, a personnel database of ‘true believers’, and a set of draft executive actions.

This effort was hugely controversial and often contradictory. Much of it was, frankly, mad. Trump even distanced himself from it in opposition. But there is no doubt its core arguments underpin Trump 2.0, many of its policies have been implemented in government and its key personnel have gone into the administration.

This was combined with a concerted effort by those on the inside of the Trump team to do things differently. This included putting much more time and resource behind transition and making appointments much more carefully, with people who see it as their job to deliver for the President, not stop him from doing things. This has been epitomised by the appointment of Susie Wiles as Chief of Staff.

These efforts paid off. The energy, urgency and focus of the Trump administration, at least initially, was epitomised in his first day in office when, live on camera, he sat signing executive orders, one after the other, narrating what he was doing and why. The contrast with Starmer’s opening weeks – notable for the Winter Fuel debacle – is both stark and painful.

Lessons for the Left

Learning the lessons from both the challenges of the Labour transition – and some of the successes of Trump transition – is important. This is immediately true: the Labour Party is currently undertaking another transition, with Andy Burnham likely to take office in 12 days. But, even if it comes (largely) too late for Burnham, the left must learn from its mistakes, as Trump 1.0 did.

Here are a few headline conclusions some of which might be helpful to Burnham’s team now and so of which are thinking about future transitions:

Build capacity, and a culture, within political parties and government, to develop a clear governing project and plan for government. Invest in a shared governing story of what the problem in the country is, what has caused it and therefore what you are going to prioritise to fix it. This must be deeper than ‘the other side are the bad guys, put us into office’. This governing agenda should be negotiated to sit alongside the political strategy. This requires capacity – and a culture - in the party to do this. Staff must be rewarded for thinking about the bigger picture and developing ideas. A senior figure in the party, willing to go head-to-head with the political team, should be appointed with a fully staffed team to do this work. This is also needed for renewal in government. The government should invest in a strategy unit – alongside policy and delivery units – to do this work.

Cultivate organisations and people around political parties and government to drive ideas and shape public opinion. Even with the capacity set out above, there will be a limit of what can be achieved within the party and government given the demands on their time. External actors can think more strategically and long term, contest big debates and float ideas, outride to make the case for changes, and develop future talent. This should be independent of politics: this is both a requirement legally (at least of charities) but is also important to create space for ideas and innovation. But political parties can help ensure this activity flourishes by resourcing teams internally to engage fully and creating a culture which is permissive of challenge and creativity.

Take talent and culture really seriously. There are few more important factors in successful governing than the talent of the people appointed and the culture of the team created. Yet politics almost always fails to take cultivating talent and consciously building effective cultures seriously. Political parties should set up a proper, transparent system for making appointments – supported by organisations or teams whose job it is to scout talent. Ensure people, especially the top team, are appointed as early as possible and know what role they will be taking on. Give clear job descriptions, enforce proper line management processes and offer training, mentorship and support. Set the culture of the team from the top including how you expect people to work together, how difficult decisions are taken and how to manage disagreements in a system of collective responsibility.

Reform the process of politics and transition to help achieve this. Our political system, as currently set up, makes transition harder. Two things are worth highlighting. First, we don’t fund politics properly which makes resourcing prep for government harder. I think we should cap private donations (kicking big money out of politics) and provide state funding (or civil service resource in kind) for transition planning and policy development for opposition parties. Second, we don’t have an effective transition process. We should follow the example of countries such as Australia, New Zealand and Canada by introducing a formal transition period (at least a week, if not longer) so political parties have time to recover from the campaign and make appointments. We should put in place a codified set of rules to allow the civil service to engage with the opposition earlier and to manage transition periods. This Labour government should commission a cross-party group to agree these measures.

What did both George Osborne’s austerity and Liz Truss’s mini budget have in common? Much as they would refuse to admit it, they both, in my view, fundamentally misjudged the constraints they faced in government.

Osborne (probably knowingly) confused the UK for Greece, imposing deeply damaging cuts to the state at a time when the UK could in fact borrow at record lows. This was a huge moral failing and a missed opportunity. Meanwhile, Truss made the opposite mistake. She failed to understand the limits of the state’s ability to borrow and plunged the UK into a fiscal crisis with unfunded tax cuts. We are all still paying the price.

With Andy Burnham’s resounding win in Makerfield, there is an optimism in the Labour Party again. This has spawned a cottage industry of (often, newly) Burnhamite commentators, seeking to define what a Burnham premiership might look like. They inevitably start with Burnham’s record in Greater Manchester and his recent speeches. Yet they often overlook an important point: Andy Burnham as Prime Minister will face a set of constraints as Prime Minister that he didn’t as Mayor of Manchester.

To get a clearer picture of what a Burnham government will look like you have to combine a vision of ‘Manchesterism’ with an answer the following question: which of the constraints that have hindered Keir Starmer’s leadership are real, and which are self-imposed? And, therefore, where could a different leader drive bigger, bolder change? Burnham’s ability to answer these questions accurately – to push up against the limits of what he can do whilst not crossing over the line - will determine the success of his government.

This piece sets out my analysis of these constraints – and how a Burnham government can navigate them to deliver real change.

Constraint #1: borrowing

One of the main critiques of the current Labour leadership from the ‘soft left’ has been the focus on fiscal discipline, which is perceived by some to have come at the expense of progressive purpose. Fiscal responsibility has been right at the heart of Starmer’s project from day one, both in opposition where it was crucial to reassuring voters and business, and now in government. Rachel Reeves has made it her defining mission.

Yet, in truth, Reeves has done this whilst still reforming the fiscal rules to create space for more investment. Despite this, her approach hasn’t always been popular with the Labour Party, particularly earlier in the parliament when limited fiscal headroom led to botched spending decisions and endless tax speculation, and more recently as pressures on defence spending have grown.

The challenge for any future Labour leader (and Chancellor) is that Reeves is largely right: any government will face very real constraints on borrowing. And, contrary to common belief the big constraint here isn’t the fiscal rules which are in fact relatively permissive. The challenge is the market’s willingness ‘to wear’ further borrowing and the cost of this borrowing to the state.

UK 10-year gilt yields are up significantly since 2024 – recently at levels comparable to the Truss mini-budget – and have been consistently higher than other comparator economies. Many of the causes of this are international, including the impact of the war in Iran and global debt and deficits being higher. But UK political instability – the legacy of the Truss mini-budget and endless fiscal rule changes - is likely contributing to a premium on top of these global pressures.

A future leadership could loosen the fiscal rules. Or they can use the changes made by Reeves, notably the introduction of PSNFL which captures financial assets (equity stakes, loans) as well as liabilities, as a mechanism to further increase investment. This is a good aspiration to have given the UK’s dreadful track record on investment, which is holding back growth.

But there are limits on this: it would likely result in increases in the risk premium markets attach to government bonds unless the government can persuade markets it is genuinely growth inducing investment. And, even if it doesn’t spike the interest rate, it would mean spending more on debt interest, already costing us over £100bn a year, which in turn will either crowd out day-to-day spending or require additional tax revenues.

This explains why Andy Burnham has recently chosen to reassure markets by committing to Reeves’ fiscal rules. This was, in my view, the right thing to do.

Constraint #2: taxation

What about tax? Here, the obvious constraint the current government has put on itself is its so-called ‘tax lock’. This was a core manifesto promise to not put up headline rates of: income tax, national insurance, VAT or corporation tax. Together these make up around 85 percent of the UK’s tax revenue.

This would be the obvious place to start if a future leader wanted to find additional revenues. The challenge is that it would likely be incredibly unpopular, especially during a cost-of-living crisis.

Public opinion work undertaken by IPPR and Persuasion UK, earlier in the Parliament found that if people are confronted by a direct choice between the government breaking the manifesto or keeping its promise of “change” (e.g. better public services, higher incomes), people prefer the tax rise.

But in reality, I don’t think voters believe that this is the trade-off facing politicians. Rightly or wrongly voters tend to believe that government has more room to find revenues by tackling both tax inequalities (‘the rich need to pay their fair share’) and government waste, before they ask ‘working people’ to pay more.

This will be even harder for Andy Burnham who will become Prime Minister without having won on the 2024 manifesto. And, in my view, he will want to avoid the challenge Starmer and Reeves faced: coming to office and immediately being mired in a ‘tax bombshell’ controversy that many would interpret as a breach in trust.

So, if we rule out the taxes included in the ‘tax lock’, this leaves around 15 percent of tax revenues that the Labour manifesto left on the table. This, by definition, is going to limit the revenue raising potential of tax reform.

But that doesn’t mean there isn’t an opportunity here. Taxes are not just revenue raisers: they are also a key tool in shaping the economy as well. Reform to things like property and business taxation – as well as fiscal devolution of those taxes included within the ‘tax lock’ - could be crucial in driving more (and better) growth and greater fairness. This, not significant new revenues, is the big reward for pursuing tax reform.

Constraint #3: business sentiment

So, with limited space on borrowing and taxation to drive better outcomes for citizens, one big lever left for government is regulation or, more radically, shifts in ownership.

In his recent response to Tony Blair’s leadership essay, Burnham attacked “40 years of neoliberalism” and argued that “the lesson from Greater Manchester is that you can’t just leave it to the market…you need strong public control over both the investment strategy and…transport, energy, water, education and housing”.

This could take many forms. In its most radical form, as set out in Mainstream’s paper, The Productive State, this would be delivered through a form of nationalisation, meaning bringing key sectors such as energy, water, housing or care, which are perceived to be more costly and less effective as a result of historical privatisation, into publicly owned corporations, similar to Scottish Water or British Rail (before it was privatised).

Is this possible? The big constraint here would again be fiscal, with borrowing needed to both take industries into public hands and then to find the resources to invest in them. There are some smart workarounds set out in the Productive State paper, which would keep more borrowing off the books, but there is no doubt that achieving this at scale in the short term seems unlikely.

What about regulation? Burnham could pursue greater public control through regulation of these sectors, for example, rent stabilisation in the private rented housing sector as IPPR has recommended, or stricter caps on energy markets. Here, the constraint is slightly different: ‘business sentiment’, meaning the confidence of businesses in the UK business environment and therefore their willingness to invest, locate and operate here.

This has been a big concern for the current leadership who have (rightly) made economic growth central to their agenda both as a driver of long-term standards of living and also as a source of revenue for public spending in the short term. But, without persuading businesses and markets that they have a clear growth model, and in combination with limited fiscal headroom to navigate the transition to a new model, the government has faced pressure to back down on its regulatory agenda on things like renters’ rights and workers’ rights.

But, it doesn’t have to be like that: if a Burnham government builds up fiscal headroom, tells a compelling story about the growth model it is pursuing and how it’s reforms will achieve this, is willing to have this argument in a hostile press (something the current leadership has often backed away from), and can combine regulatory measures as part of a package of other pro-growth reforms which win over key parts of the business sector (tax reform, planning reform, welfare reform and an EU deal), there is more room for well-designed regulatory interventions.

Constraint #4: state reform

Finally, the other lever left on the table is reform.

The Starmer administration has talked a big game on reform. This has variously focussed on welfare entitlement reform, public service reform (such as ‘test, learn and grow’ and the deployment of new technology) and state reform (including civil service reform, devolution and democratic reform). But, in truth, these efforts have often lacked coherence, have been poorly communicated or have not been ambitious enough to genuinely transform outcomes. For example, on:

Communication: The classic case here is the winter fuel payment debacle and the government’s attempt at working-age welfare reform. In both cases, the policies were badly designed, the case for reform was miscommunicated and the politics were also badly managed. Possibly because of this, the government has ducked wider welfare reform, for example to the triple lock where there is a growing consensus that reform is needed (though the Milburn review is set to pursue reform for young people and seems to have learned the lessons of previous failed reform attempts).

Coherence: Here the best example is public service reform where the main issue has been a lack of clear overall theory of public service reform. On both health and education there has been some progress, but this has largely been the result of incremental, technocratic reforms that are unlikely to drive the productivity increases needed to manage constrained spending or respond to demands for greater responsiveness from the public. These reforms have often also pulled in different directions, simultaneously centralising and devolving or talking of prevention while prioritising crisis management. These contradictions are occuring even within, let alone across, departments. There is no clear or deep reform agenda equivalent to New Labour’s health reforms or Gove’s education reforms.

Ambition: On this, we can look at constitutional and state reform, where the government has pursued reforms to make it easier to vote (as well as introducing votes at 16), pushed through a wave of devolution and announced a digital ID. But overall, attempts to reform the state have been thin. The closest the government got to a big agenda – mission driven government – quickly died on the vine in government. This could have been genuinely transformative if it had flowed through to how money is spent and the Treasury operates, how departments, business and civil society work together and how civil servants and tiers of government are held accountable.

Could a different leader do things differently? This is the area where I am most optimistic. The current leadership have put two key constraints on themselves.

First, by being largely allergic to ideas and ideologies, they have often struggled to build a coherent reforming project. This wasn’t entirely their fault: as Starmer has said he “had to do Kinnock, Smith and Blair in one term”, leaving little room for project-building. But, as Starmer’s biographer, Tom Baldwin, has pointed out, the Prime Minister appears almost disdainful of ideas and has actively shunned the infrastructure needed to encourage them.

And, secondly, in lacking confidence and storytelling in their communications, the government has often struggled to build coalitions for reforms. This may seem trivial: it is increasingly fashionable to dismiss communications as less important than substance. And, clearly comms without delivery is just posturing. But, in the new ‘attention economy’, as Chris Hayes, has argued: “attention ascends from a means to an end to the end itself. If you can’t be heard, it doesn’t matter what you say.”

This, then, is where a future leader might be able to unlock a key constraint. If Andy Burnham embraces ideas, and combines this with more confident, emotive and attention-grabbing communications, in aid of building political coalitions, this could be transformative in unlocking the one big lever government still has at its disposal in a cold fiscal climate: fundamental structural reform to the state and our economy.

Realistic hope

This analysis is fundamentally realist. No leader, however talented, can overcome the hard constraints facing this government. There is unlikely to be major scope for increases in borrowing or additional tax revenues in the coming years (though the government can, carefully, innovate at edges). This limits tax-or-borrow-and-spend as driver of progress, often the go-to for those of us on the left. Any attempt to defy these constraints will be disastrous: just ask Liz Truss.

But it is also hopeful. As it stands, our political leaders too often mistake self-imposed limits for immutable rules. This is especially true when it comes to reform (but, as I argue, also for regulation). In a time when governing is already difficult – with stagnant economic growth, geopolitical instability, low public trust and a transformed attention economy – progressives can ill afford to constrain themselves.

A more confident leadership of the Labour Party would embrace ideas, make and win big arguments and build lasting coalitions for bold reform to unlock genuinely radical change. This, in my view, is where the current leadership has really come unstuck and fallen short – and where a new leader can excel.

True, this means some of the left’s most utopian ideas are out of reach. But, over three years, a bold reforming government could transform taxes to reward places, work and innovation, overhaul welfare for an age of AI to deliver a new intergenerational deal, remake Westminster and pass power from Whitehall to town halls, and take on vested interests in housing and energy to lower costs. Each of these reforms alone are insufficient to transform the UK. But taken together they could make the difference between delivering, or not, on Labour’s big manifesto promise: change.