For months, government insiders have speculated that McSweeney is now isolated and marginalised within No 10: living, like Starmer, on borrowed time.
His ten-minute speech gave the opposite impression. It began not in 2025, a year most in the room are already longing to forget, but 2029 — on the eve of a general election he insisted Starmer would win.
“Let me start with where this journey ends,” he said. “In 2029, Britain is a country that has been changed by a Labour government. A country where effort is rewarded, where the state is competent and fair, where communities feel safe and where parents believe their children will have a better life than they did.”
The country, he admitted, was “weary” and voters were feeling “stretched, sceptical and impatient”. Starmer had fallen behind in the polls because they had not felt the change promised by Labour’s manifesto. “Their patience,” McSweeney said, “is thin.” 2026, he promised, would not be a “year of promises”, but “the year of proof”.
What he said next felt particularly pointed to his audience. Insisting that voters would begin to feel progress under a Labour government next year — “not in theory, not in speeches, but in their lives” — McSweeney launched a muscular defence of the budget and the abolition of the two-child benefit cap, a policy to which he was once resolutely opposed.
“Next year,” he said, in remarks leaked by some of those watching to The Times, “this Labour government will lift 350,000 children out of poverty. That is 1,000 children, every single day of 2026, whose lives are a little lighter because of the decisions made by the people in this room.” Then, using one of the words Wes Streeting, the health secretary, recently deployed to criticise No 10, he added: “That is not abstract. That is not technocratic. That is moral action.”
That was about as close as McSweeney came to acknowledging the weeks of infighting that have brought this year to such a miserable end for his colleagues in No 10.
McSweeney concluded with a call to arms. He spoke of the government and his audience as “the thin red line” that protected Britain from the “moral abomination” of Nigel Farage, the leader of a party whose pockets he claimed were “filled with Russian money”.
Still, however, he was optimistic. “2026 is the year the country starts to feel the difference: in bills, in public services, in the places people call home. Not the full flood yet, but the first real ripples of hope. This is the year Britain turns the corner.”
Starmer is preparing to give a speech late next month on the cost of living as part of a more streamlined approach to government. His message will be that Britain is starting to turn the corner, with six cuts to interest rates and falling levels of inflation.
The hope is that people will begin to feel better off, and that flagship government policies such as the rise in the minimum wage, scrapping the two-child benefit cap, cutting energy bills and freezing prescription charges will begin to have an impact.
The challenge for Starmer and McSweeney, however, is that voters are not feeling the benefits.
The budget included another £26 billion of tax rises, taking the tax burden to the highest level on record. The centrepiece was another three-year freeze in income tax thresholds until 2030-31, which will drag millions of people into paying higher rates. The Office for Budget Responsibility, the official forecaster, has warned that living standards will remain stagnant for the rest of this parliament.
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Research by YouGov shows that voters are significantly more pessimistic now about their finances next year than they were just last summer. In August, 30 per cent of voters thought their finances would get worse over the following 12 months — a figure that has risen to 35 per cent. Similarly the number of people who think their finances will improve has fallen from 23 per cent to 19 per cent.
Starmer’s other approach will be to pick more fights. This week was a case in point. The prime minister demanded that Roman Abramovich, the Russian oligarch, release the proceeds of the sale of Chelsea Football Club for Ukraine.
He also launched a formal investigation into allegations of electoral interference by foreign powers, one that is likely to have Farage and Reform UK firmly in its sights. The announcement follows the conviction of Nathan Gill, the former leader of Reform UK in Wales, for accepting bribes from Russia.
Starmer will intensify the attacks in the new year, when he is expected to warn that Farage will lead a far-right government if he wins the general election. Labour, he will say, is the only party that can stop him. Those around Starmer say he will seek to define himself as much by what he is against as what he is for.
But as the May elections approach pressure will only intensify. Rivals including Streeting, Andy Burnham, the mayor of Greater Manchester and Angela Rayner, the former deputy prime minister, are likely to become increasingly vocal.
Some soft-left Labour MPs are making plans to present Starmer with an ultimatum if the May local elections prove to be as bad as expected.
They will promise Starmer they will not mount a leadership contest on two conditions. One is that Rayner, Louise Haigh and Lucy Powell are all returned to the cabinet. The second is that Starmer sacks McSweeney. An MP said: “At that point, Keir would do anything to stay alive. There is no way he would turn down that deal.”
Starmer will spend Christmas at Chequers, his grace-and-favour home, with his family and is hoping for some much-needed rest. He will need his energy for what is to come in 2026, which promises to be an extraordinary year in politics on any measure.
