The opportunity to make Labour an effective progressive party again, and how to seize it

The May 2026 election results were dismal for Labour, and this has predictably called into question the future of Keir Starmer as Prime Minister. What is not so predictable is who will be Prime Minster in two months’ time. It is not only the Labour Party which has serious questions to answer, but Labour are the party currently in government, they are historically a progressive party, and after the leadership question is settled, whoever is Prime Minister, they will still have a large majority and time to act for the good of the country.

This article explores the question: How should whoever is selected as Prime Minister respond?

While there are no comfortable answers, there is still a path to continued relevance, and the Prime Minister should take it both for their own good and for the good of the country. There are two main options open to Labour: the first is to double-down on the existing approach on the basis that it will work, it has just not been tried enough; the second is a reinvention to become a dynamic progressive party that meets the needs of UK citizens:

• Option 1: doubling down will lead to failure for Labour and for the country;
• Option 2: reinvention is immensely challenging, but absolutely necessary; so
• Labour should move quickly and determinedly to reinvent – it can be done.

If they do not, the consequences both for Labour itself and for UK citizens are dire.

Option1: Double-down

It still seems possible that, especially if there is no change in leadership, Labour will choose the first option. In his letter to Labour MPs after the poor showing in Gorton and Denton, Keir Starmer said:

“Over the coming months, people will feel the benefit of the long-term decisions this government is taking. Look at the good economic news we’ve had in the past week: inflation and borrowing coming down, retail sales and business confidence rising, energy bills falling. … the country is turning a corner.”

The Chancellor, in her Spring Statement, again recommitted to her fiscal rules, saying, “The forecasts today confirm that the choices this government has made are the right ones: Stability in our public finances,  Interest rates and inflation falling,  Living standards rising, More children lifted out of poverty, More appointments in our NHS,  More investment in our infrastructure, A growing economy.” It is not surprising that these comments have not aged well, even just a few months later.

The Home Secretary has said she plans to ‘seize the immigration narrative’ from Reform, even if it costs the support of ‘bourgeois’ voters.

Voters in general have made it clear that they do not feel the government has made the right choices, they do not believe the country has turned a corner, and they do not believe that their own lives will improve. Voters do not want to see doubling-down.

And that opens up a huge opportunity.

Option 2: Become the party progressive voters want

We know what people in the UK want; and, by and large, it is not unreasonable.

Almost always, the key issue is the economy and the cost-of living crisis. As Hannah Spencer put it when she was elected Green MP for Gorton and Denton,

“[T]hings have changed a lot over the last few decades. Because working hard used to get you something. It got you a house. A nice life. Holidays. It got you somewhere. But now – working hard? What does that get you? Because talk to anyone here and they’ll tell you. The people who work hard but can’t put food on the table. Can’t get their kids school uniforms. Can’t put their heating on. Can’t live off the pension they worked hard to save for. Can’t even begin to dream about ever having a holiday. Ever. Because life has changed. Instead of working for a nice life, we’re working to line the pockets of billionaires. We are being bled dry. I don’t think its extreme or radical to think working hard should get you a nice life. And if you’re not able to work, that you should still have a nice life.”

Immigration has become an issue for many voters, but it is likely that many of them have been influenced – how could they not be? – by the consistent scapegoating by our tabloid press.

And voters want an NHS they can rely on and be proud of. It seems hard to remember now that in the early 2010s the NHS was the envy of the developed world, and yet now it is at increasing risk of failure.

To believe that reinvention is the right strategy you would need to accept that:

• The economy is not yet on the path to recovery and, without a change in policy, the IMF’s forecast that we are on track for the worst decade in 100 years will come true;
• The UK’s public services will not be improved by repeating the errors of the last government on privatisation and PFI;
• That it would be a disaster if Labour becomes a centre-right party with a high tolerance for racism.

Need to act fast

The next general election in 2029 is not far away – in order not to lose, Labour need the public to feel the benefits of having given Labour a chance at wielding power. And they need progressive voters to believe in the change.

In the book, 99%: Mass Impoverishment and How We Can End It, I set out five steps the UK should take in order to return to the path of progress:

Step 1: Democratic Reset – Constitutional Reform. Our work on Defensive Constitutional Reform puts more flesh on the bones of what must be done urgently.

Step 2: Fact-based policy-making. Our work on rewiring the UK’s Key economic institutions to ensure that their work is fact-based and aligned with delivering progress is now critically important.

Those first two steps are an essential precursor to Step 3.

Step 3: Policies for solidarity and prosperity – growing the pie and sharing it fairly. On the solid foundation of the constitutional reform and rewiring for fact-based policy, we can expect government to build a policy portfolio that will tackle and reverse mass impoverishment.

Policy formulation is complex, but there are only fundamentally four types of policy. Each policy either grows the pie or it doesn’t; and it either shares the benefits of that growth fairly or it doesn’t. That gives us these four types of policy:

1. Captured growth policies;
2. Shared growth policies;
3. Vulture policies; and
4. Balancing policies.

The chart below helps understand both how we got into our current mess, and how we can get out.

We got into this mess in the UK because we have had far too many captured growth policies and vulture policies, and far too few shared growth policies and balancing policies.

Step 4: Investing in the Future. It is clear, and even generally accepted, that both public and private investment in the UK have been far too low for far too long. This manifests in low economic growth and struggling public services. The underinvestment has been the result of not having fact-based policies, especially on government spending. Now is the time to reverse it, as Roosevelt did with his New Deal.

Step 5: Clean-up Capitalism by tackling externalisation. In a growing market, the best way to grow profits is to grow the top line, and businesses can do that. In a stagnant market, it is impossible for most businesses to grow, so instead they focus on reducing their costs. And too often they do that by externalising their costs to the rest of society. When a business externalises its costs, it gets us to pay for its pollution, it gets us to pay for its underpayment of staff, and it gets us to pay for its avoidance of taxes.

And because it externalises its costs, it can outcompete more ethical businesses. Because it externalises its costs, it becomes an engine for mass impoverishment. And because it externalises its costs, it gets rewarded for destroying the environment.

But if it could no longer externalise all these costs, it would cease to have an advantage over more ethical businesses. It would not have grown. It would not have contributed to mass impoverishment or environmental destruction.

In a world without externalisation, ethical businesses would outcompete unethical ones and the profit motive would become a force for good.

Those five steps remain to be taken, and they would put the UK back onto a path of progress.

But before Labour can start to take them, it needs to decide what kind of country it is trying to build, and it needs to be able to communicate its vision and values in a way that appeals to voters. That requires clarity, courage, leadership, and communication skills.

Putting the whole picture together, to implement Option 2, this is what Labour must do.

It is not an easy task. But it must be done.

Conclusion

The stakes for the Labour Party are high. As Clive Lewis (Labour MP) put it “If we carry on like this, we won’t just lose by-elections. We’ll lose the country for a generation.” He is not exaggerating. It is even possible that it could be worse: the Liberals were regularly in power from 1860s to 1922 – but have never regained power since.

And equally high are the stakes for the UK. If Labour blunders on, it will lose the next election. If it loses to Reform (as Electoral Calculus suggests is most likely), the UK is likely  to experience in 2029 what the US is experiencing today.

Unless Electoral Calculus are way off, the Greens cannot win alone (and even if they could, they have little experience in government; it would be a huge challenge for them to deliver). And a coalition government with an unreformed Labour Party would be a continued failure.

We cannot afford Labour to fail so dismally, and out of self-preservation, they should not contemplate it either.

If you think this is important, please share widely, including with your MP.

And take a look at the 99% Organisation and join us.