Beth Rigby: Starmer's fate could be decided by a looming crisis much closer to home

Sir Keir Starmer was not meant to be doing an emergency news conference on the Greenland crisis in the Downing Street briefing room on Monday.

The prime minister was meant to be about 200 miles away, delivering a speech much closer to voters' concerns around household budgets and what this Labour government is doing to try to help.

2026 was supposed to be the year in which he tried to win back disillusioned voters - and MPs - with a big push to cut the cost of living, be it around rail fares, energy bills, childcare or lifting the two-child benefit cap.

Instead, he has found his agenda blown wildly off course by the whirlwind that is Donald Trump.

But what matters on the global stage affects voters at home: tariffs will hurt the economy and could cost jobs. Conflicts drive up costs, be it in your shopping basket or heating your home.

As the prime minister put it on Monday when he called out Trump on his tariff threat over Greenland: "In today's world geopolitics is not something that happens somewhere else… when instability grows, it's rarely those with the most power who pay the price… we must use every tool of government, domestic and international, to fight for the interests of ordinary people. Tackling the cost of living today also means engagement beyond our borders."

As Starmer does that, deputy Labour leader Lucy Powell is taking on the role of "campaigner in chief" for the party ahead of the May elections.

Because, as global crises keep rolling, Labour could be running into a polling crisis at home.

Later this year, Labour will be contesting 4,000 council seats, representing 20 million voters, plus Scotland's Holyrood and Wales's Senedd. They come with the party trailing Reform and the Conservatives on 17% of the vote.

It is a perilous predicament in what looks set to be a bloody set of elections which could see Labour pushed into third place behind Reform in Scotland and Wales, where Labour could lose control of the Senedd for the first time ever.

The resignation of first minister and Welsh Labour leader Eluned Morgan would surely come shortly after if that becomes Welsh Labour's fate.

But Powell, MP for Manchester Central, who became deputy leader in November, doesn't seem daunted by the task.

The core message

When I meet her in a community centre of her patch run by the Manchester Settlement, she has a clear message for her party: Labour must focus relentlessly on what matters to voters and get behind Starmer.

"The cost of living crisis and cost of living issues are absolutely in the fore of everyone's mind, and I think it's important for us as politicians […] to just constantly remind ourselves that for most people, they're struggling to pay their rent, they're struggling with their housing costs, they're struggling to pay the bills," she said.

"I think people really want to know we are on their side and working every single day as a government to rewire the country and reshape the economy so that life works better for them. I just don't know that we have really pulled it together more strongly as a story."

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'Worst of all worlds' if Labour turn on PM

Part of Powell's job is to remedy that - and the deputy leader is proving more loyal to the leadership than many of her colleagues had perhaps expected.

The soft left Labour MP was sacked from the cabinet by Starmer and was not the leadership's choice in the battle to replace Angela Rayner. There were many who thought she would be a constant thorn in Starmer's side, but instead her message to colleagues is to "not undermine Keir, not undermine ourselves".

"I do think that's probably counter-intuitive for some people to see me saying that, because obviously part of my election was [because] people wanted to see us change a bit and have a course correction and do better than what we've been doing - and that is the mandate I've got," she admitted.

"But I strongly believe we're not going to do that if we all turn in on ourselves and have months and months and months of this constant speculation, that's the worst of all worlds.

"The Tories changed the prime minister three times in three months, and it didn't change the outcome for them at the election one jot. If we don't tell our story ourselves, no one is going to do it and that's what we've got to do."

Who might challenge Starmer?

Powell tells me Starmer will lead the party after the May elections and will be leading Labour into the next election. That she of course cannot know. But what is ringing clear in our conversation is her call for unity.

It comes at a febrile time, with chatter over a possible Wes Streeting leadership bid constant as the briefings and counter-briefings roll on between Starmer supporters and allies of the health secretary.

Streeting is constantly referenced by MPs as a politician with the ambition, network and funding to mount a leadership bid. Some MPs tell me it is in Streeting's interests to go sooner rather than later as the two obvious left candidates - Angela Rayner and Andy Burnham - are not ready for a challenge should it come (the former needs to get her tax situation solved and then rebuild, the latter lacks a seat in parliament).

The upshot is that "will he, won't he" is a constant refrain in Labour circles.

All of this reflects the difficult predicament Starmer is in. The situation got so bad in the run-up to Christmas, the PM's allies felt it necessary to tell MPs he would stay on and fight any rival rather than fold.

That a PM was forced to say that just 18 months into his premiership, on the back of a landslide victory, was both astonishing and a reflection of just how bad things for this government had become.

Foreign affairs to the rescue?

But there is also huge reticence, anxiety even, about trying to turf out a sitting prime minister.

As one cabinet minister put it to me last week: "Changing the leader is a bit Tory for me.

"If we try to change the leader, the party will end up tacking to the left and that is not Labour's problem with the country, so it won't be the solution. It's probably better to try to work on making Keir Starmer better."

The international crisis also helps Starmer, as attentions turn from domestic politics to managing the most serious rift in the transatlantic relationship in decades.

As fellow party leaders fell in behind Starmer on his position on Greenland, it helped him look statesmanlike: this grave chapter in geopolitics is not a moment in which a rival would mount a leadership bid.

In the meantime, Starmer will no doubt soon be back out and about, touring the country rather like he did during the 2024 election. The five pledges, six pillars and three foundations of this government - remember those? - have been buried in favour of a focus on the cost of living.

As part of this, the government is now quickly ditching policies that are unpopular or distract from the core cost of living message. In Westminster parlance, this is known - to quote the former Conservative election chief Lynton Crosby - as "scraping the barnacles off the boat".

The decision to water down the farms tax, business rates on pubs and ditch compulsory digital IDs has seen ministers get a battering in news studios for U-turns (and yes it does roil backbench MPs), but it is a short-term hit senior party figures think is worth taking.

"I think less is more," Powell tells me. "I think people want to see a clearer agenda that they can connect to and that they see. And I think sometimes when you first come into government, there is this attraction of 'let's try to manage everything and do everything'.

"And you know, politics is painted in primary colours, our colour is red. Let's paint in that colour, let's paint in our primary colours and leave the kind of managing of things to other people whose job that is."

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On U-turns, Powell concedes it "would be much better to do a lot of that thinking and get things right beforehand" - but the crux of the Labour challenge in 2026 is the government has to deliver.

From Number 10 to new MPs, everyone in Labour agrees that voters - who were promised change in 2024 - need to begin to feel better off.

Starmer is acutely aware that people haven't felt personally better off or seen public services improving since the 2008 financial crash, and saying it will get better isn't cutting much ice.

"People won't believe it until they feel it," is how one cabinet minister put it to me.

To that end, there will be much more activity around cutting costs and improving the NHS, which Labour see as a proxy in voters' minds for better public services.

There will be, I suspect, more barnacles off the boat, as Labour look to lessen the noise in the party and Westminster and campaign into the May elections and beyond. The government might delay reform of jury trails - the legislation is planned for March - in order to avoid a showdown with some of its backbenches.

There will be many that see it as weakness from Starmer, but this is a PM who wants to dial the noise down in order to try to push Labour's dismal polling ratings up.

It is a perhaps insurmountable task for a PM being tested to his limits at home and abroad.

May will be a huge ballot box test for the Starmer administration - and could well determine his fate with his party.

(c) Sky News 2026: Beth Rigby: Starmer's fate could be decided by a looming crisis much closer to home