Costly communications: How Labour’s comms strategy backfired – London Business News | Londonlovesbusiness.com

While the government will have little trouble getting its budget through this week, the setup for it has been remarkably flawed.

Not only is this the longest a new government has waited before a major fiscal event, it has spent much of this time employing a communications strategy that has made this budget even trickier politically than it needs to be, potentially doing long-term damage to the government.

The new Labour administration, of course, has had numerous other own goals during this time—the bungled response to the freebies scandal and the resignation of Sue Gray, to name but two.

However, the really big headaches for the government have come from its own political communications strategy around its fiscal and economic policy, which has set up its time in office on the wrong foot.

Rachel Reeves first made the case that there was a £22 billion black hole in the public finances in July, followed in August by Keir Starmer’s warning of a “painful” budget. For months, it seemed the only thing we really knew about the plans from Downing Street was that things were fiscally awful, and gap was going to be plugged by cutting winter fuel payments for millions of pensioners.

The Labour government was trying to give itself political space for the tax rises coming this week by painting the bleakest picture possible, but it has done them a disservice. Partly, this is because the language they used has made people think Labour wants to implement Austerity 2.0: 44% of voters said Labour wanted to prioritise balancing the books instead of economic growth (26%). When three in five Labour voters back the party to improve public services, this perception has gone down terribly with voters.

The government has belatedly tried to fix this. According to the latest Downing Street press release, “Keir Starmer will reject austerity, chaos, and decline in favour of economic stability, investment, and reform.” It has been confirmed that Labour will change the fiscal rules to give itself an extra £50 billion to invest. But this has jarred with a lot of their communications up until the party’s conference.

Even now, they can’t quite shake off the perception that has built up. The prime minister this week also said he will “embrace the harsh light of fiscal reality,” which picks up on a theme that has still done the government no favours. The strong line on the budget being taxing in every sense of the word has sustained remarkable levels of pessimism. Almost half (49%) think the economy will get worse in the next 12 months, and 37% think their own personal finances will get worse. Other research suggests business confidence has dropped to a 4-month low.

All of this has created various problems for the government. In the immediate term, a perception has already built up about this budget that its measures will be unfair (50% think this vs only 21% thinking it will be fair), which is pretty lethal when it comes to fiscal and economic decision-making. Reaching back into history, the political damage from George Osborne’s Pastygate and Gordon Brown’s 10p tax rate abolition was the perception that these changes were deeply unfair.

In the longer term, the past few weeks have done much greater damage to the occupants of No 10 and No 11 Downing Street: Keir Starmer’s approval rating now sits at net -31; Rachel Reeves’ approval rating now sits at net -29. It has built up a tremendous feeling of ill-will towards the leading figures in the government in a very short period of time.

Of course, there is no prospect that the budget itself is in danger; Labour MPs have been steeled to see a series of tax rises that would be more impossible to do at any other time in the parliament. But this budget has come at a greater cost to the government than it otherwise needed to if the whole run-up had been handled differently.