Sir Keir Starmer has lost control of the Labour Party
In surrendering to his rebellious backbenchers on his flagship benefit reforms, Sir Keir Starmer has followed exactly that path. There are, however, two problems with this approach. The first is that Britain, after decades of wasteful spending, and with a sky-high tax burden, is rapidly running out of fiscal road with which to buy out future opposition. The second is that Labour rebels will now smell blood in the water and they will undoubtedly turn their attention to thwarting the Government's attempts to make savings elsewhere.
The bill for health and disability benefits is expected to reach £70 billion a year by the end of the decade. These measures were expected to cut them by just £5 billion. A previous climbdown this week had reduced that to £2.5 billion. Now what's left of the Bill has been gutted, with the Government withdrawing elements in a panic.
That Sir Keir, who won a majority of 174 just a year ago, has found that he cannot make even a small change to a welfare system that is spiralling out of control without meeting mutiny from his Labour colleagues, speaks poorly of Britain's ability to change course before it is forced to by circumstances beyond its control.
In the short run, the Government has a £5 billion hole to fix in its fiscal plans, and a blow to its credibility in the eyes of the bond markets. In the long run, its concession has made it significantly more tempting for Commons rebels to engage in games of chicken in the belief that Sir Keir will back down. The Prime Minister's track record is already littered with U-turns and backtracks but this latest reverse has shown that he may simply be unable to manage his party, let alone govern this country. Indeed, even after this chaotic concession, 49 of his own MPs still voted against the Bill.
What prospect is there of Sir Keir and Rachel Reeves now getting to grips with the sort of large scale welfare reform that Britain really needs? The pressure, if anything, seems to be from an ascendant Left which demands more spending, more taxation, more state intervention in the economy: the scrapping of the two child benefit cap is already in the sights for some rebels. It is a bleak thought that Sir Keir's response to this may be to tack Left. Once you pay the Danegeld ...
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North Wales Chronicle
25 minutes ago
- North Wales Chronicle
Keir's first year: Starmer under pressure after a rocky start for Labour
Labour swept back into Downing Street with more than 400 MPs on July 4 last year – clinching a majority just short of Tony Blair's landslide in 1997. A year later, polling expert Professor Sir John Curtice is calling it 'the worst start for any newly elected prime minister'. Sir Keir was accused of setting a gloomy tone at the outset, telling the public that 'things will get worse before they get better' and warning of 'tough choices' and a 'black hole' left in the finances by his predecessors. Soon after, a plan was unveiled to cut back winter fuel payments for pensioners, only for an enduring backlash to see the Government U-turn and widen eligibility months later. This and the recent climbdown over plans for welfare cuts to stave off a backbench rebellion have raised the prospect of further tax rises in the autumn budget as the Chancellor seeks to balance the books. It has also raised the prospect of rebellious MPs being emboldened to continue pushing back on future policy, putting Sir Keir's plans at risk. When it comes to whether voters like him, Sir John has argued that the Government has a 'lack of direction' and that the Prime Minister was 'never especially popular' and that 'the public still don't know what he stands for.' 'The only vision he's really presented is: 'We'll fix the problems the Conservatives left us.' But it's not clear how he wants to change the country,' he told Times Radio. Sir Keir has acknowledged the 'challenge' of 'getting our story across'. 'If I was to list to you all the things we've done, it's a big long list of things. [But] how do we tell the story of what we've done? How do we make sure it's actually felt by working people?' he said in an interview with The Times. He also said he took 'ownership' of all decisions made by his Government, and that he did not get to grips with the growing rebellion over welfare reforms earlier as he was focused on international affairs. Although that rebellion was eventually reduced from 126 MPs to just 49, it required extensive concessions and marked the biggest revolt of his premiership so far, just days before he celebrated his first year in office. He has played a balancing act on the world stage, strengthening ties with the EU while courting US President Donald Trump, who he wooed with an invitation for a second state visit to the UK when they met in the White House. The football-loving Prime Minister lists a 'hat-trick' of deals – an EU 'reset', a deal with India, and an agreement for relief from Mr Trump's tariffs which has been partially implemented – among his key achievements. He also touts his commitment to get defence spending up to 2.5% of GDP by 2027 – and the new Nato defence and security spending pledge of 5% of GDP by 2035. At home, he is battling the rise of Reform UK. A YouGov megapoll released last week said a general election now could see Reform UK taking more seats than Labour, while the latest Ipsos poll puts Nigel Farage's party at 34% with Labour behind at 25%. Sir Keir framed Reform UK as Labour's main opposition at a press conference in May, saying the Conservative Party has 'run out of road'. It came after Reform UK hoovered up council seats across England in local elections, as well as gaining a seat previously held by Labour in the Runcorn and Helsby by-election. An immigration speech in which the Prime Minister said the UK could become an 'island of strangers' drew criticism and comparisons with Enoch Powell's infamous 'rivers of blood' address that was blamed for inflaming racial tensions in the 1960s. Sir Keir has since expressed regret at the phrasing. But he reportedly plans to target 'authoritarian-leaning' voters with a focus on tackling migration and crime. In recent polling by LabourList of members, 64% said they wanted the party to shift to the left, with only around 2% favouring a move to the right. The next test at the polls will be Welsh and Scottish elections in May, at which Reform UK hopes to end Labour's 26-year domination in the Senedd next year. Sir Keir again took aim at the party in a speech to the Welsh Labour conference last weekend, saying Mr Farage has 'no plan at all' for the nation. Political historian Sir Anthony Seldon has praised Sir Keir's ability to react to crises in foreign policy and during the riots last summer, but urged him to counter Reform UK by communicating 'growth' and 'optimism'. 'Show people that you're Prime Minister, show people you've got a story, show people things are getting better across the whole country with growth and then, you know, that will deal with Reform,' he told Sky News. Sir Keir has pledged to lead a 'decade of national renewal' and said that the first year of that has been 'cleaning up that mess' his Government inherited. In a signal he is seeking to put a positive spin on the future, he told business leaders last week: 'We've wiped the state clean, we've stabilised the economy, and now we can go on to the next phase of government, building on that foundation.'
Reuters
31 minutes ago
- Reuters
Breakingviews - AI dooms the billable hour – and Big Law earnings
LONDON, July 2 (Reuters Breakingviews) - Artificial intelligence promises to save time for white-collar workers. If true, that could be bad news for companies that bill clients by the hour. Law firms, auditors and other professional-services outfits might find ways to mitigate the financial hit. But there's no getting around the fact that automation risks devaluing part of the pricey service they're offering. The 'billable hours' model dates to Reginald Heber Smith, a legendary managing partner of Hale and Dorr between 1919 and 1956, who 'pioneered the rationalization of the modern law firm', as described, opens new tab by its descendant White Shoe outfit WilmerHale. At heart, billing by the hour means getting staff to meticulously track the time spent on projects so that they can invoice clients accordingly. Beancounters and tax advisers at groups like Deloitte are also heavy users of so-called timesheets. About 82% of U.S. law firm partners' work is charged by the hour, Thomson Reuters Institute research shows, while such revenue makes up 65% of income at U.S. audit firms, according to, opens new tab the Association of International Certified Professional Accountants. Rates can be eye-popping. The most senior partners at elite firms, like Kirkland & Ellis or Quinn Emanuel Urquhart & Sullivan, can bill up to $3,000 an hour. The rate for junior lawyers can be $400, according to LexisNexis's Sean Fitzpatrick, or sometimes much more at White Shoe firms. It's normal, opens new tab in Big Law to charge out juniors at multiples of their salaries, which can be a nice earner for the top partners. But AI, particularly so-called AI agents which work autonomously, are now threatening to undermine the time-honoured practice. Goldman Sachs analysts estimated, opens new tab in a 2023 report that 44% of legal tasks in the United States could be automated. It might sound like a good thing that an AI agent could draft a non-disclosure agreement in minutes, or instantly synthesise board minutes for an audit. Yet a perverse outcome of the billable hour structure is that being more productive, all else equal, can mean generating less revenue. According to American Bar Association guidelines, opens new tab published in July, lawyers can only charge for actual time spent on tasks, even if AI allows them to perform them faster. Compounding the problem is the fact that professional-services firms may face a chunky upfront IT bill to get the new software up and running. Only one-third of tax firms surveyed, opens new tab by Thomson Reuters reckon they can directly pass on generative AI investment costs to customers, implying that developing or buying slick new AI agents will initially eat into profit margins. There are no painless ways to respond to this double whammy. One extreme option, in theory, would be to let AI agents replace a big chunk of the junior staff. Clients pay partners for their wisdom and personal touch, not the grunt work. The implication is that seniors could keep charging themselves out even if the rest of the firm becomes populated by faceless AI robots. And to the extent that some juniors spend time on work that can't be billed, agents could boost profitability. Associates, who are generally younger members of staff, are already shrinking as a proportion of law-firm headcount – to 40% in recent years compared with 45% from 2005 to 2009, according to Thomson Reuters, opens new tab. One problem with this option, other than its heartlessness, is that firms need a constant pipeline of juniors to repopulate the partnership. Who else will replace the old guard when they finally cash out to hit the golf course full time? It's also far from clear that the hallucination-prone software is ready for the big time, implying that a horde of associates may still be needed to check AI agents' accuracy. That points to a different solution: moving away from billable hours. It's already happened at the elite strategy consultancies like McKinsey & Company, Bain & Company and Boston Consulting Group, who often charge flat project fees tied to specific outcomes. Doing the same would flip the AI equation for law and accountancy firms: productivity improvements could boost margins rather than hurt them. There's a precedent in the legal world too: Allen & Overy in 2002 created a subscription-based business called Aosphere, whose lawyers give advice online to 1,200 clients. 'We don't even do time sheets', its website claims, opens new tab. Buyout shop Inflexion and Endicott Capital agreed to invest in the division in 2023 at an unspecified valuation, suggesting that the model may hold some promise. But it's a different type of service to advising on a complex deal or piece of litigation. The risk is that it will be tough to systematise pricing across the vast variety of projects. Doing so might be easier for beancounters, since audits can in theory share a common overarching process. But no two lawsuits, for example, are the same. Switching to a project-fee approach puts the onus back on professional-services firms to judge how many resources a clients' work will take. The bigger problem, however, is that automating tasks makes it harder to charge a margin. Under the classic law-firm model, for example, revenue gets split equally three ways between overhead costs, salaries and partner profit. The implication is that seniors should charge juniors out at a minimum of three times their pay. Yet clients may balk if Big Law tries to apply the same logic to an AI agent. Why should a White Shoe firm add a markup to software that it just bought from someone else? Corporate clients could argue that they could just get their own AI agents instead. It's a management challenge that Hale and Dorr's attorney mastermind Reginald Heber Smith would probably have relished. Solving it will require moving beyond the billable hour. Follow Karen Kwok on LinkedIn, opens new tab and X, opens new tab.
BBC News
32 minutes ago
- BBC News
Doug Beattie: Ex-UUP leader was 'beaten badly' in the Army for being Irish
The former Ulster Unionist leader Doug Beattie has said he was "beaten badly" by instructors for being Irish when he joined the Army at the age of became a soldier in 1982 and served three tours in Afghanistan with the Royal Irish Regiment (RIR). Originally from Portadown, Beattie became a UUP assembly member (MLA) in 2016 and was leader from 2021 until last year, after an internal row prompted his said bullying he endured during his early years in the armed forces had a huge impact on his life. Speaking to BBC News NI's Red Lines podcast, Beattie said he joined the military as a teenager, after his mother died and his father struggled with alcohol said he went to Somerset to do his initial Army training, where he faced discrimination because of his background."Because I was an Irishman - and I've always been an Irishman - I was beaten badly by instructors, by people I was looking up to," he said."I found myself bullied quite badly, it doesn't matter that I was a unionist or my father was a military man. "The fact I came from Northern Ireland meant I found myself being bullied and beaten quite a lot and that had an effect on my life as a young man." 'Lack' of women in high-profile roles Beattie also spoke to the podcast for the first time about how the furore over his resignation as party leader unfolded last stepped down as leader after an internal row over the selection contest to replace Robin Swann as the UUP's North Antrim MLA after he became the MP for South Antrim. Beattie said he had wanted a female candidate to replace Robin Swann, saying the party had a "lack" of women in high-profile jobs at Stormont, and that he was "prevented" from bringing in another candidate he preferred over Colin Crawford, who was selected by the party's North Antrim association to take on the role. The Upper Bann MLA said when that happened, he felt it was "clear I could no longer influence the party"."People who weren't supporting me made what I was doing really difficult to stay on... the truth was I had no choice," he added."I put in a letter of resignation, I didn't go to anyone I just went to the party chair. Then I was persuaded by the MLA group to withdraw it, I went back to withdraw and the party chair said no, they put it to party officers who said 'we're not letting you withdraw it, the letter stands'."The bottom line is I stepped down, I found my place back in the party as an MLA and that's where I'm working now."Beattie admitted the affair had left him "bruised" after three years in charge, but said he would like to run for the assembly again in the next election scheduled for May acknowledged that the UUP was a "broad church", which sometimes made the party "impossible to lead when you're trying to appease every level"."It's a fair criticism... it's never been easy to be leader of the UUP regardless of who it is," added was replaced as leader by Mike Nesbitt, Stormont's Health Minister, who also previously led the party from 2012 until 2017.
