Labour Government Faces Scrutiny Over Policy Reversals

Labour Government Faces Scrutiny Over Policy Reversals
Charlotte Baroukh

Charlotte Baroukh

Tax Expert @ Pie

3 min read

Updated: 18 Feb 2026

3 min read

Updated: 18 Feb 2026

The current Labour government, led by Prime Minister Sir Keir Starmer, has reversed course on a series of major policy decisions since coming to office.


Recent weeks have seen the abandonment of plans to postpone local elections, alongside significant amendments or reversals on issues spanning benefit reform, tax policy, and key manifesto pledges.


These developments have sparked debate over the government’s consistency and responsiveness to legal, financial, and political pressures. This article examines the main policy U-turns made by the Starmer administration, providing analysis and context for each case.

Local election postponement reversed

In a recent development, the government announced it would no longer seek to delay local elections for approximately 30 councils in May. The proposed postponement, which would have affected over 4.5 million voters, was initially justified on the grounds of resource constraints linked to ongoing local government reorganisation.


However, following legal advice warning against the move, and in the face of legal action brought by the Reform UK party, ministers withdrew the proposal. Nigel Farage, leader of Reform UK, publicly claimed credit for challenging the postponement.


Government sources indicated that legal concerns were central to the decision. Housing and local government officials confirmed the reversal on Monday, attributing the outcome to both legal and democratic considerations.

Hillsborough Law amendment delayed

Plans to amend the proposed Hillsborough Law have also faced setbacks. The government withdrew an amendment that would have allowed security services greater discretion in providing information to public inquiries, in response to criticism that it risked undermining the law’s “duty of candour.”


Campaigners and regional mayors, including Andy Burnham and Steve Rotheram, expressed concern that the opt-out was too broad. The bill remains delayed as negotiations continue, with MI5 leadership engaging directly with MPs on the issue.


Supporters of the Hillsborough Law Now campaign have called for a revised approach that will achieve consensus among parliamentarians, security officials, and campaign groups. The timing for resolution remains uncertain pending agreement on the extent of transparency required from intelligence agencies.

Digital ID scheme changes

In September, the government announced the introduction of the “Brit card,” a digital identification initiative intended to regulate employment eligibility and immigration status.


Initially designed as a mandatory digital identification card to be used via smartphones, the policy was revised following criticism of compulsory requirements and concerns about access for vulnerable groups, particularly those in rural areas. Government sources stated that stepping back from mandatory use was aimed at reducing contention and ensuring flexibility.


The adjustment reflects broader debates over digital exclusion and personal data security, with policy discussions ongoing regarding the potential uses and voluntary elements of a UK-wide digital ID system.

Business rate relief for pubs

Chancellor Rachel Reeves was reportedly set to end temporary business rate relief for pubs, a measure introduced during the Covid-19 pandemic. The relief was valued at up to 40 per cent, with a £110,000 cap on annual reductions.


Following significant opposition from the hospitality industry and concerns raised by Labour MPs, the chancellor signalled a reconsideration of the decision. The partial U-turn aims to prevent closures of pubs and restaurants adversely affected by higher costs.


Reeves had initially announced an end to the relief in her Budget, but pressure from industry representatives prompted further review of the scheme.

Agricultural assets tax adjustment

Labour’s plans to apply a 20 per cent tax on the transfer of agricultural assets valued above £1 million, set to take effect from April 2026, met with widespread opposition from farmers and agricultural organisations. Critics argued the measure would disproportionately impact family-run farms.


As a result, the government increased the threshold from £1 million to £2.5 million. This adjustment, following extensive discussions with the National Farmers’ Union and industry protests, is expected to reduce the impact on smaller agricultural businesses.

Final Summary

The Labour government’s approach to governance has featured significant reversals on several high-profile policies since coming to office. These U-turns reflect internal party dynamics, stakeholder pressures, legal considerations, and evolving economic conditions.


While critics argue the frequency of policy changes undermines the government’s credibility, ministers contend that responsiveness and pragmatism are necessary in a changing landscape.


Public and political reaction to these developments has varied, with some praising the willingness to amend unpopular measures and others questioning the consistency of leadership.


As the administration continues to refine its policy agenda, close attention from parliament, campaigners, and the press is likely to persist. For further updates on political developments and tax policy, users may consult the Pie app for accessible insights.

Want to get smarter about taxes?

The Tax Pible has tax tips, guides, video tutorials, and expert insights.


Stay up to date with the latest tax news and watch the UKs first tax podcast - the Piecast

Want to get smarter about taxes?
Whatsapp Pie Tax