In July 2024, just over two years ago, the British Labour party won 411 seats out of 650 available at the general election, a huge majority and a wildly disproportionate return – the party won 33.7% of the votes but 63.2% of the seats. Labour had been out of office for 14 years and the win was hardly a surprise.

The new government could expect a full five-year term but the financial position was dire – a substantial burden of sovereign debt was the Tories’ legacy, increasing each year as there was also a stubborn budget deficit.

Keir Starmer and his colleagues had campaigned without a detailed programme to address the financial challenge and must regret their failure to take early action.

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The problems have worsened in their first two years – economic growth remains sluggish, there is a commitment to double defence spending within a decade and there is no willingness to contemplate serious increases in tax revenue.

There must be many in the Labour party who regret the failure to employ the following manoeuvre immediately on taking office.

Stroll down to the Treasury, only a few hundred yards away, accompanied by a cluster of TV cameras, to “inspect the books”.

Emerge, ashen-faced, an hour later to announce that the previous crowd have left the cupboard bare, there is no money left, and all bets are off.

Increase taxes (serious ones that raise real revenue, like VAT and income tax), forget whatever manifesto promises had been made and blame the Tories. Cue howls of protest from all quarters except the bond market, where a brisk rally would follow.

There is always healthy demand for government debt when it looks likely to get scarcer.

What actually happened was a refusal to raise any of the taxes that yield serious amounts of money, reluctance to seek economies in social transfers or health spending, the biggest items in the budget, and a reliance on some magical thinking about economic growth to make the sums add up.

The rate of economic growth is not a policy instrument which the government can tweak to order, it just happens. Post-Brexit Britain had seen fairly disappointing figures on growth before the 2024 election, indeed long before Brexit, not that Brexit helped.

Along came an undeclared war in the Middle East, a sharp adverse movement in oil import costs and a creeping sell-off in the bond market. The UK Treasury has recently been paying close to 5% on 10-year borrowing, not pleasant when there is a lot of debt to be serviced.

The rate slipped back a little at the end of last week but remains well above what comparable European countries are facing.

Meanwhile, the UK government has announced its intention to increase defence spending dramatically over the next decade, as have all the European members of NATO.

Resigning

There is no money to pay for this and cabinet ministers are resigning or threatening to do so.

Of course the incoming government in 2024 would have been deluged in criticism had they engaged in the pre-budget manoeuvre outlined above but they are shipping the criticism anyway.

In the meantime, the recent local and regional elections have seen the far-right Reform party poll well ahead of the others but with four main national parties (Labour, the Conservatives, Greens and Liberal Democrats) all polling not too far behind. In Scotland and Wales the nationalist parties did best.

Thus there will be five contenders for seats in England with six in Wales and Scotland. Some election experts believe that Nigel Farage’s Reform party could do best whenever the next election is held and there is talk of constitutional reform to get rid of the first-past-the-post (FPTP) voting system, which produces bizarre results when there are lots of parties.

When Reform, in an earlier incarnation, was the smallest party a decade ago, Farage favoured proportional representation, to which both Labour and the Tories objected when FPTP suited them better. On the basis of recent polling it may now suit Farage.

Politicians in the Republic would be foolish to imagine that they are immune to the impact of populist inclinations in their electorate.

The essence of populism is the denial of trade-offs, the insistence that things will work out fine and that difficult choices which might upset someone can be avoided.

In Ireland the inclination to solve problems by spending more money is encouraged by the appearance of a strong budget surplus dependent on the corporate tax bonanza from US multinationals.

Their bountiful annual gifts to the Exchequer may prove as transient as the tax revenue boom from the banking bubble before the crash of 2008.

If there are Irish ministers feeling smug about the sea of troubles in which their British Labour counterparts are floundering, they have short memories.