Before the Christmas break, Sir Keir Starmer, approaching the six-month mark of his premiership, had come to a stark conclusion about his hopes of re-election.
To win a second term, he would have to defeat not a traditional centrist Conservative Party but an altogether spikier force positioned on the populist Right.
“I know I will not be facing a Right-of-centre opposition at the next election,” the Prime Minister confided in others. “How that looks exactly, I don’t know.”
The private assessment was eye-catching for two reasons.
Firstly, as Right-wing populists surge in Donald Trump’s America and on the European continent, it had become clear to Sir Keir that Britain was by no means immune.
And the second: the Prime Minister thought his path to re-election could be blocked not just by the Tories but by Reform, possibly with the two forces linking arms.
How to keep the first new Labour government in a quarter of a century electable amid the headwinds of populism has become something of a fixation for No 10.
That is just as well, given that the start of 2025 in Westminster was dominated by a debate about grooming gangs, fuelled – and arguably ignited – by Elon Musk, Trump’s number one cheerleader, in posts on X, formerly Twitter.
The scorn the tech billionaire poured on Jess Phillips, the safeguarding minister whom he dubbed a “rape genocide apologist”, resulted in Sir Keir criticising Musk in forthright terms.
The move reflected a strategy No 10 has developed to deal with soundings-off from Team Trump as it looks ahead to four years of a Maga White House.
Mr Musk had “crossed a line”, Sir Keir judged, and so a punchy response followed, in which the Tesla owner was accused of “spreading lies”.
A similar approach will be adopted for Mr Trump: each provocation weighed but not all leading to a put-down.
“We can’t respond to everything,” a Starmer ally said. By not seizing on the incoming US president’s wackier proclamations, but standing firm when British national interests are at stake, the Prime Minister hopes to maximise his chances of a constructive relationship.
At home, Sir Keir does not have the luxury of side-stepping the challenges of a surging Reform and a reforming Conservative Party. Nigel Farage and Kemi Badenoch, the parties’ leaders, are quick to use social media to attack the Government.
Those tasked with plotting the path to a hoped-for Labour re-election in, at the latest, 2029 are alive to the threat – some think the probability – of a Reform-Tory pact.
“They will do some sort of deal because ultimately Reform, for all this anti-establishment posturing, is really an offcut to the Tory Party,” said a No 10 insider.
“If you look at the people involved, look at where the backing comes from, where the biggest chunk of voters comes from, it is all the Tories.
“Farage is a very clever, shape-shifting politician and I have no doubt whatsoever with the promise of power he will absolutely get into bed with the Tories.”
There are two views about when such a deal could happen. One argument goes: Mr Farage would have to start indicating the possibility this year to create political space for such a move.
Others think it would be closer to the election, when the relative strength of both parties is clearer.
For now, No 10 is content to watch, while assuming a deal could well happen.
The electoral danger is not hard to see. Opinion poll averages have Labour on 28 per cent, the Tories on 24 per cent and Reform on 22 per cent – double where it was last spring.
Add those last two figures together and they dwarf Labour. The maths is rudimentary; similar games can be played with the Labour and Liberal Democrat vote shares.
But it is the past history of deal-making on the Right that makes the possibility more tangible.
Arguments that Mr Farage could never “get into bed” with the Conservatives given his popularity is rooted in decrying their past failings can be countered with reference to 2019.
That year, Mr Farage agreed to stand down his election candidates for the Brexit Party – the precursor to Reform – in Tory-held seats to allow Boris Johnson to win re-election and take the UK out of the EU.
Mr Farage’s original demand in those private discussions, according to a Tory closely involved, was for a clear run for Reform in several seats.
That pitch was rejected, but a similar one would be likely to be the price for a deal this time round.
Mrs Badenoch’s early leadership appears to be positioning the Tories on the populist Right.
Labour figures have accused her of riding “on the coat tails” of Reform, noting how similar her statements on grooming gangs have been to those of Mr Farage.
One Tory shadow minister – a Robert Jenrick ally – has taken encouragement from how she seems to be learning from Mr Trump’s victory last year.
Mrs Badenoch is safe as leader until at least 2026, the source added: “Robert would not move against her before then.”
Both Badenoch and Farage camps, naturally, always wave away any suggestion of deals.
One Labour hope comes in the form of Morgan McSweeney, Sir Keir’s chief of staff with a track record of managing to puncture the bubbles of support that have emerged on the Far Right in the past.
The red-haired Irishman cut his teeth in the trenches of Lambeth Council in the late 2000s countering a surge in support for the British National Party.
His strategy: deliver tangible results that improve people’s lives to cut through the voter disillusionment that feeds populists.
“Lots of people are saying not ‘something must be done’ but ‘nothing can be done’,” said one Starmer ally about today’s dilemma. “We’ve got to show them that the Government can make a difference and is on their side, to restore that trust and confidence.”
And so, looming into the foreground come two policy areas identified in Downing Street as critical to countering the Reform surge: bringing down immigration – both legal and illegal – and curbing soaring welfare spending.
Sir Keir has hardened his rhetoric on the former, accusing the Tories in November – when historic record net migration statistics dropped – of overseeing an “open borders policy”.
But will he really take steps to markedly reduce migrant work visas at the risk of harming economic growth?
Allies point to how the Office for Budget Responsibility was not given heightened immigration estimates to help massage-up growth figures for the last Budget.
On welfare, No 10 and the Treasury are now aligned on the need to save billions of pounds from the ballooning benefits bill, no doubt triggering a backlash from the Left. Downing Street will use the cuts to frame Labour squarely as the “party of work”.
Come the next general election, the Government’s big challenge – whether the Right is split between the Tories and Reform or united – will be to convince voters their lives are improving under Labour.
Harry Quilter-Pinner – the executive director at the Institute for Public Policy Research, the Left-leaning think tank – said: “The second term is always an election campaign that says ‘we’ve done half the job, give us the mandate to finish it off’.
“No 10 has to be able to say the first bit – which means public services on the road to recovery and the economy showing green shoots of growth – and for it to resonate with people.”
As the economy stalls and public finances tighten, that is becoming a harder job than Sir Keir hoped as he headed off for the Christmas break.
