What Sir Keir can learn from the Kamala calamity

Labour has begun an intense debate about the lessons it must learn from the defeat of its sister party, the Democrats, in the US election. Although UK political advisers, obsessed with American politics, overdo the parallels, some lessons are obvious.

A political elite must not fight on identity politics that might seem important to it, but on the issues that matter most to millions of voters.

In the US, living standards and illegal immigration were critical, and they will be at the next UK election, which is already making some Labour backbenchers jittery. Why?

The Bank of England said on Thursday that Rachel Reeves’s Budget will mean a small rise in inflation, while her increase in employers’ national insurance contributions will hold down wages. Meanwhile, Keir Starmer’s tough talk on the small boat crossings has not yet got the numbers down.

To the UK list, we can add the NHS – the symbol of Labour’s pledge to improve public services, on which it will be judged at the next general election.

Labour ministers argue that they are already on the right page with their emphasis on the “working people” – a demographic that was won over by Donald Trump. Labour might struggle to define precisely who these people are, but at least is trying to appeal to them. The Budget largely spared them the pain inflicted on better-off groups, while raising the national minimum wage and freezing fuel duty.

Some Labour figures will doubtless argue (wrongly, in my view) that the defeats of Hillary Clinton and Kamala Harris show that Labour should resist the temptation to ensure that its next leader is a woman. Shamefully, on that front, the party is 0-4 down in its match with the Conservatives. But when a former Independent colleague asked me recently who would succeed Starmer, I replied: “The contest will be dominated by Labour’s need to have its first female leader, as Angela Rayner battles it out with Rachel Reeves. Then it will elect Wes Streeting.”

The factor in the US election that should most worry Labour is that, since the jump in inflation that followed Russia’s invasion of Ukraine, incumbents are being toppled around the world, with only a few exceptions. Any opposition will want a “change” election – and, with seven out of 10 Americans unhappy about their country’s direction, Trump could offer change in a way that he could not when running from office in 2020; Harris was too closely tied to the Biden administration to be able to do so.

In 2029, Labour will have to fight on its record in power. Morgan McSweeney, Starmer’s chief of staff, wants Labour to run as “insurgents” – to see off the threat from the populists, such as Reform UK, to its right, and the Greens on its left flank.

It won’t be easy. Memories of the Tories’ record during their 14 years in power will have faded. The £22bn “black hole” they allegedly bequeathed to Labour will have evaporated. Labour will be seen by many voters as the ruling establishment – and you can’t run against yourself.

Starmer’s cabinet will soon take a crucial decision that will shape Labour’s strategy for 2029: what should become of the five missions at the heart of this year’s election offer. I’m told there’s a big battle behind the scenes over whether the missions should be downgraded, or even scrapped, when the government issues a “priorities for change” blueprint in the next few weeks. While Starmer’s political team is pressing for change, he is reluctant to let his missions go.

The compromise might be to give them a sharper focus. One lesson from America is that Starmer’s aim to secure the highest growth in the G7 should be replaced with a pledge on living standards. To concentrate Labour minds, the party might as well recognise now that voters are going to ask the question posed both by Trump this week and by Labour in July: are you better off than you were at the last election?

Many Labour figures saw Trump’s victory coming months ago. A clue came when Reeves stopped comparing her economic strategy, with its big investment in green energy, to Bidenomics (though it was more accurately described as “Bidenomics without the money”). Labour was perplexed that higher US growth was not matched by Americans feeling better off after a period of high inflation; the result was a “voteless recovery”.

So Labour will somehow need to generate a “feelgood factor” before the next election. That will be hard: real disposable household income is forecast to rise by an average of just 0.5 per cent per person by 2029, the lowest under any Labour government, while real wages are expected to have grown by only £13 a week over the previous two decades.

Labour has no alternative but to aim high: that is what an impatient and volatile electorate will demand, in a new political landscape that suits populists like Nigel Farage and his friend Trump much more than it does the established parties.