Labour Party wins UK election amid a crisis for British capitalism

A version of this article first appeared in the fortnightly “Tabqati Jeddojead” (The Class Struggle), the Urdu language publication of the Marxists in Pakistan. It was translated into English by Omer Abdullah. Below we publish it with some updates by the author.

The Tories have suffered a historic defeat in the recent UK general elections. They were able to secure just 121 seats in the parliament, an extraordinary fall of 244 seats since the last elections. Their share of the total vote dropped from 43 percent to 23 percent. Meanwhile, the Labour Party increased its seats by 209, reaching a total of 411, with only a slight increase in their overall vote share to just above 33 percent. The “centrist” Liberal Democrats took third place, gaining 63 seats to reach a total of 72, with the share of the total vote at 12 percent. In any case, the Labour Party was able to form the government single-handedly with a majority of 174 seats. Consequently, Keir Starmer, the party leader, will be the new Prime Minister of United Kingdom. He is going to be the seventh prime minister from the Labour Party, which is returning to power for the first time since 2010.

The above-mentioned statistics along with the other aspects of election results, more than depicting the victory for the Labour, point to a deep crisis or even a partial collapse of the Conservative Party. The people of Britain wanted to oust the Tories at any cost. In this regard, they cast a vote of hatred and disgust against the Tories rather than a vote of hope and optimism for Labour. The situation is the inevitable result of Tory policies over the last 14 years, which have desperately worsened the conditions of toiling Britons. A majority of the people now believe that they are worse off as compared to 2010, when the Tories came to power. As a result, the Tories have even lost the constituencies historically considered their strongholds.

Under the crisis of British capitalism, the one and a half decades of Tory rule was also riddled with internal divisions, instability and uncertainty. During that period, five prime ministers took office (four of them just between 2016 and 2022), with Liz Truss managing to stay in power for only 50 days. Similarly, no one was ready to take folks like Boris Johnson and Rishi Sunak seriously, and they had become more of a subject for social media memes than respected heads of government.

A closer examination of the election results and the related opinion polls uncover significant facts about the current state of British politics and society. For example, the turnout for this election was 60 percent, the second lowest of any general election since 1885, with the lowest being 59 percent in 2001. It reflects the disinterest and lack of confidence of the British electorate in the political status quo. Consequently, as in many other countries, the largest share of the total vote went to “no party” in the form of abstention.

The sentiment was also evident in the pre-election polls. For instance, a survey from June 2024 revealed that trust in the British government and politics is at its lowest of the past 50 years. In this poll, 79 percent of people expressed distrust in the system of governance, and 71 percent (up from 51 percent in 2019) were of the opinion that conditions had worsened since Brexit.

Another important aspect of the election result is the historic divergence between the number of votes that parties received and the number of their MPs in the parliament, raising serious questions and concerns regarding the electoral system itself. For instance, Labour got almost twice as many seats as the percentage of its votes—63 percent of the seats versus 33 percent of the votes—while the far-right Reform UK secured only 1 percent of the seats despite receiving 14 percent of the votes. The Liberal Democrats and the Green Party suffered a similar result. According to the BBC, in a system in which seats were allocated according to the share of votes, Labour would have gotten 195 seats, while the Tories, Reform UK and the Green Party would have got 156, 91 and 45 seats respectively. However, this didn’t happen as the party votes in lost constituencies are simply multiplied by zero. Hence the seats won by the Labour Party present a very exaggerated impression of its popularity and the number of votes it actually received.

Anyway, the Green Party was able to secure four seats, marking its biggest electoral achievement so far. On the other hand, the far-right Reform UK increased its vote share from 2 percent to 14 percent despite winning just four seats. The latter is not a positive development and serves as a warning for the British working class.

A comparison of the share of total votes received by Labour under Keir Starmer and Jeremy Corbyn is also imperative. Vote share of Starmer’s Labour dropped by 7 percent points as compared to what the party received under the left-wing Jeremy Corbyn in 2017. Even in 2019, despite a drop in votes, the Labour Party under Jeremy Corbin was able to win the same percentage of votes as it did in the recent elections. However, it secured only 262 and 209 seats respectively in the last two elections. Therefore, the impression of the corporate media and the right-wing inside and outside the Labour Party about the party’s grown popularity under Starmer is misguided. Keir Starmer received the lowest percentage of votes of any prime minister since 1929.

Another crucial factor contributing to the defeat of the Tories was the division within the right-wing voting pool. In 2019, the Tories and Nigel Farage’s Reform UK, then known as the Brexit Party, were in an electoral alliance and together secured 14 million votes. Their vote was divided this time, but if we add the number of votes received by both parties, they still totaled 11 million votes—1.2 million more than Labour’s total.

As discussed earlier, almost all of the vote for Labour was cast not out of confidence or optimism but by an electorate deeply disappointed and frustrated with the Tories. For instance, in another survey conducted in June, only 5 percent of voters who intended to vote Labour agreed with its policies. A significant 48 percent simply wanted to get rid of the Tories, and the remaining voters had different but similarly motivated reasons. Only 2 percent of people wanted to vote Labour based on the principle of a lesser of the two evils. As pointed out by the Financial Times, the lack of enthusiasm for the Labour Party among people was astonishing, and those voting for the party were far more disconnected from it compared to the past. In the similar vein, another survey revealed that 71 percent of people felt their issues were not being appropriately addressed in the election campaign.

Another important aspect of the election result is the victory of five pro-Palestinian independent candidates. Four of these candidates are from a Muslim background, and the fifth one is Jeremy Corbyn, who, running as an independent candidate, defeated the Labour candidate by seven thousand votes.

Nevertheless, now that Labour is in power, the question is what to expect from it. In his victory speech, as reported by Red Flag, Starmer mostly focused on his four years of efforts to “change” the Labour Party and the “changed” party that has resultantly emerged. “This election could only have been won by a changed Labour Party.” He was basically referring to the purge of Jeremy Corbyn and the related left-wing figures from the party. In this regard, no one should have any illusions in Starmer. In fact, it is quite easy to draw a parallel in between him and Tony Blair, an imperialist stooge and war criminal. Right from the moment he assumed the leadership of the party in 2020, he has declared his intentions and policies without any hesitation. Just prior to the elections, while publishing the party manifesto, he clearly stated that the Labour Party should be business-friendly. It’s important that one the two largest trade unions in Britain, Unite, was very critical of the manifesto and refused to support the party in the elections as a token of protest. Starmer is also an opponent of the idea of increasing taxes on big capital and the expansion of social services provided by the government. Likewise, he is a staunch Zionist and has also hinted at plans for “controlling” immigration. It is not without reason that large sections of British establishment and the corporate media, including figures within The Economist and the Financial Times, are throwing their support behind him. It is also not a coincidence that the British stock market skyrocketed the day Labour won the elections. History is full of ironies!

It is not only the question of Starmer’s subjective intentions or desires but also of the objective conditions of the system under which he must govern. Since the end of World War II, British capitalism—after enjoying an imperialist hegemony over most parts of the world for hundreds of years—has suffered from a continuous downfall, ultimately sinking to the position of a subordinate partner of US imperialism. Margaret Thatcher’s rise to power in the 1980s was an important development in this process. Through an onslaught of neoliberal policies, then in their infancy, she destroyed the very bases of once mighty British industry, manufacturing and mining. With British capital’s falling rate of profit, she—as a political representative of her upstart and short-termist capitalist class—transformed British capitalism into a kind of rentier economy. This rentier economy is based on the corrupt practices of privatization; stock market, real estate and financial speculation; fueled by the ceaseless supply of black money from the newly emerging crooked and gangster bourgeoisie in Russia and India, and also by the petrodollars of the reactionary sheikhs of the Gulf monarchies. In recent decades, Chinese capital has also jumped in, accounting for as much as 20 percent of the big real estate deals in 2021.

In 1981, only 3.5 percent of the shares in Britain were owned by non-British individuals or corporations. By 2020, this figure had soared to over 56 percent. Similarly, more than 50 percent of the total assets held by US multinational companies in Europe are located only in Britain. The number of employees working for US corporations in Britain exceeds their combined total for Germany, France, Italy, Portugal and Sweden. These companies contribute more than 25 percent to Britain’s GDP. All of it depicts that somewhat self-reliant, proud and protectionist national capitalism of the “good old days” has gone to pieces.

Since the 2008 financial crisis, economic conditions in Britain have only worsened, which is also reflected in the turmoil and instability of British politics. Every basic economic indicator reflects this historic crisis, as explained by Marxist economist Michel Roberts in one of his recent writings. Britain ranks at the bottom of the list of the imperialist countries in terms of labor productivity, which according to Paul Krugman is “everything in the long run”. Economic growth in real terms is 20 percent below the pre-2008 trend. Currently, the economy is experiencing its worst growth of the last 65 years, effectively stagnating or even shrinking. Per capita GDP is virtually the same as it was in 2007, and real buying power is even lower than in 2007. Under the last 14 years of Tory rule, living conditions for most people have only deteriorated. During the last three years, there has been a 60 percent increase in energy prices and a 30 percent rise in the food prices. All this has led Britain to a place where poverty rates are now higher than Poland’s.

According to income and wealth ownership data, Britain is now the second most unequal country in the developed world, while just 50 years ago it was considered one of the most equal ones. Government statistics show that the richest 20 percent of Britons own more than 63 percent of the total wealth and receive 36 percent of the national income. In contrast, the bottom 20 percent hold just 0.5 percent of the wealth and obtain only 8 percent share in the income. There are also significant regional disparities in quality of life and incomes. In 2023, about 4.3 million children suffered from poverty, representing about 30 percent of the total child population. Similarly, three million people had to rely on food banks to survive.

The acute shortage of houses is another burning issue. In the 30 years after 1989, three million fewer houses were constructed than in the 30 years’ period before 1989. This enormous gap between demand and supply has caused the median house price in London to rise from 4 times the median income to 12 times after 1997. As a result, homelessness or living in precarious conditions has increased by 60 percent in the last two years alone, while the number of families living in poor conditions has doubled since 2010.

The policies of austerity have caused more than 190,000 excess deaths from 2010 to 2019. Since the Tories came to power, the average life expectancy has not improved, and people living in disadvantaged areas are dying earlier than before from chronic diseases. This takes us to another aspect of the crisis, the failing National Health Service (NHS). Once considered one of the best health systems in the world—created by the post-War Labour governments to provide free, quality healthcare to the British people—the NHS has been pushed to the brink of collapse through relentless privatizations and underfunding. Estimates suggest that the NHS budget shortfall has exceeded 12 billion pounds. The education sector may also be telling a similar story very soon.

The share of investment in GDP has been falling since the last three decades. At 17 percent of the GDP (and only 10 percent for big corporations), it is now lower than the most comparable economies, and, ironically, matches the crisis-ridden, third world economies like Pakistan. Like most of the rest of the world, it again reflects the falling rate of profit of British capital, and ultimately urges governments to pursue the policies of austerity and privatization, through which potentially profitable sectors are handed over to private capital and the tax burden on corporations is reduced. In the resulting conditions of falling income and rising deficits, the governments start borrowing more. But borrowing has its own limits. Loans must be repaid with interest, and beyond a certain level the whole process turns into its opposite, with debt servicing eroding more and more of the government revenue. In the recent years we have seen this in many countries including Greece, Sri Lanka and Pakistan. So, while this approach might temporarily stave off the crisis, it ultimately leads to a deeper and more acute one, forcing governments to impose even harsher austerity measures.

As a result of aforementioned policies, the total debt of the British government now stands at 100 percent of GDP. At these levels of deficits and debt, it is becoming more and more challenging for the government to fund local governments facing bankruptcy, cover budget shortfalls of the public sector and invest in new infrastructure including housing. So the new Labour government, coming into power amid a deepening social and political crisis, will have to face immense challenges from day one. The solutions presented by Keir Starmar and his finance minister, Rachel Reeves—a champion of ‘modern supply side economics’—in their essence are not much different to what the successive Tory governments have been implementing since 2010. Starmer’s economic policy can be best summarized as regulating and stimulating the private sector, and it is not very perplexing to predict what it would mean for the working masses of Britain. In the words of late Munir Niazi, a distinguished poet of Urdu and Punjabi in modern times,

There was another river, Munir, looming ahead of me
I had somehow crossed one river when I saw

Accordingly, Starmer’s government could face mass discontent and backlash, and the possibility of it becoming unpopular relatively quickly, descending into turmoil and coming into an open confrontation with the working class cannot be ruled out. Under these circumstances, reactionary tendencies like the Reform UK may gain more popularity, but new opportunities will also open for the revolutionary left.

The point is that the crisis of capitalism has eroded the very economic bases upon which social democracy once used to stand. Due to the crisis of the rate of profit, government incomes have shrunk, and their capacity to intervene in the economy has considerably diminished. In the 1980s, the collapse of the Soviet Union, the degeneration of the labor movement, the flight of Western capital into China, and the neoliberal onslaught pushed left-reformism from the classical social democratic programs to the center-left. However, after 2008 they have tilted so far to the right that it has become difficult to distinguish them from the traditional right-wing. In this context, the failure, defeat and expulsion of Jeremy Corbyn from the Labour Party, and his subsequent run in the elections against the very party he once led, carry valuable lessons.

But then, for the same economic reasons, the traditional or classical right itself in its ‘soft’ and liberal forms is in a deep crisis all over the world. All of this has led to a general breakdown of the old political order. One consequence of this has been the rise of right-wing populism or the far-right with different forms and intensities, which, through its illiberal and vulgar methods, proposes more aggressive and exploitative solutions to the crisis of capitalism. Under certain circumstances, these programs and slogans, despite being ineffective, can become popular in the absence of a revolutionary alternative. Meanwhile, a significant space exists on the left side of the political spectrum that, at least so far, has mostly been filled by new reformist tendencies. They may appear more radical than the old left, but often fail and disintegrate rapidly because of their inability in looking and going beyond the limitations of the system.

This process, however, will continue to unfold in the days to come, until and unless capitalism is decisively uprooted. But such historical processes can be much longer than human lives, often plunging petty-bourgeois radicalism into frustration, and compelling it to bizarre political and organizational experimentation and adventurism—or pushing it to the other extreme, in the desperate quagmire of compromise and opportunism.

However, one thing that is evident in these circumstances is that neither the existence of traditional or prevalent parties of the working class is an eternal reality, nor is working within or orientating towards them a fixed, universal method. Under the force of great social developments and the rise of class struggle, parties are born, and they evolve, going through incessant transformations. Through the same process, they may also become obsolete and go extinct once their socio-economic bases are wiped out. Under certain situations, their degeneration and disintegration may be prolonged, resulting in transitional or contradictory conditions, but it doesn’t invalidate the ongoing historical process. In such circumstances, trying to impose the past on the present by clinging to the obsolete and rejected parties becomes a foolish endeavor—provided the goal is not the gain of material benefits and perks and privileges under the guise of revolutionary politics. As, instead of foolishness, it becomes the case of a consciously committed and unforgivable crime.

On the other hand, it doesn’t mean at all that simply announcing an independent party with a revolutionary name and appearance and then repeating its rhetoric like a parrot would resolve the historic crisis of the leadership of the proletariat. A serious struggle must always begin with a serious and realistic analysis of the society. Additionally, a revolutionary organization must continually reevaluate and correct its methods, tactics and positions at every sharp turn of events. But this cannot even begin without admitting the mistakes made in the past. Above all, changing the course of history requires a morale higher than mountains, a patience deeper than the seas and a will more solid than the most unbreakable of the rocks, since neither history follows any pre-written schema, nor can there be a ready-made blueprint for the revolution. Or else, revolutionaries like Lenin and Trotsky would not have constantly revised and corrected their perspectives and methods.

A meticulous analysis would show that almost all developed countries are facing conditions fairly similar to those of Britain. As a contradictory expression of the same crisis, the far-right in France is standing at the doorsteps of the corridors of power, while the entire left is hastily trying to resist it. But the conditions in the underdeveloped parts of the world are much more dire. What has recently been happening in Kenya is merely a continuation of what began in Tunisia and Egypt in 2011, and, with ebb and flow, has passed through one country after the other, including Sri Lanka, Lebanon, Sudan and Chile. The exploited masses of Britain will have to pass through the test of Stramer’s government, and, apart from other lessons, they could also draw this conclusion in a more concrete manner: there can be no salvation without building a revolutionary alternative to the entire capitalist system along with its political order.