In opposition the Labour party set traps for itself from which, in government, it is struggling to escape. Net zero and green targets, fiscal rules and tax pledges are being softened or reconsidered if not yet overturned or abandoned as Sir Keir Starmer’s government adapts through necessity to the cold, hard realities of power in an age of geopolitical turmoil and economic stagnation at home.

In her first Budget Rachel Reeves, the chancellor, changed her fiscal rules, which state that ministers must balance day-to-day spending with income and only borrow to invest, but insists she will not follow the lead of Germany and suspend or fully revise them. Events may yet dictate otherwise as Donald Trump unilaterally restructures global trade.

Starmer served to the last in Jeremy Corbyn’s shadow cabinet but was never aligned politically with the hard left. Driven by personal ambition, he had an unyielding determination to win his own mandate and has turned out to be temperamentally well suited to the tumult of these new times because of his pragmatism and realism.

But troubles are multiplying at home, and parliament was recalled yesterday for a rare Saturday sitting to approve the effective nationalisation of British Steel.

Morgan McSweeney, Starmer’s chief of staff, is concerned that Labour has not won the trust of the country on the defining issues of immigration, border security and law and order, exacerbated by the grooming gang scandal that has returned to torment Labour as the party prepares for local elections in England. McSweeney believes Labour needs a new social contract, or even some kind of “covenant” of trust, between the government and the people. How this would be achieved is another matter.

Since the defenestration of Sue Gray, his first choice as chief of staff, Starmer has become increasingly dependent on McSweeney not only for strategic leadership but also to provide ideological definition. Starmer is a practical politician and is largely uninterested in ideas and political philosophy. A recent Spectator essay by Michael Gove, who is respected by McSweeney, accused Starmer’s Labour of having no theory of social justice. The article was noted by several cabinet ministers – “It was brutal,” one said - but made no impression on Starmer.

McSweeney’s politics are misunderstood but he accepts that the government needs a philosophy, a set of principles, an ideology. He is considered by Labour’s arch progressives to have become too close to the socially conservative Blue Labour faction. Blue Labour is enjoying a revival because of the prominence of the peer Maurice Glasman, courted by Maga Republicans, and the influence of Jonathan Rutherford, who is leading the Future of the Left project at Policy Exchange. Rutherford and McSweeney worked together in the early period of Labour Together, the informal network which became a well-funded think tank. But McSweeney is less Blue Labour than what is being called Hard Labour.

Hard Labour rejects default progressive orthodoxies and the pieties of left-wing virtue-signalling. It does not believe that liberalism will inevitably prevail in a disorderly world. It believes in the centrality of the nation state and strong borders. It champions rearmament and reindustrialisation. Hard Labour is above all else realist: McSweeney, and by implication Starmer, want nothing less than to formulate a new post-progressive politics of the centre left that will set the political agenda for a generation.

I observed Hard Labour in action when, on Thursday and Friday, I accompanied John Healey, the realist defence secretary, on a trip to Nato headquarters in Brussels, where he chaired meetings with fellow defence ministers on Ukraine and security. “More than any other leader I’ve served under, Keir believes that the first duty of any leader is the defence of the country,” Healey, who was elected to parliament in 1997, told me. “That is to get to the root of his politics and everything we are doing flows form that. Those who say that our Nato-first foreign policy and commitment to increased defence spending are a response to Donald Trump are wrong. These commitments were forged in opposition.”

In recent days, Starmer and senior ministers have declared the end of globalisation. The “world as we knew it has gone”, the Prime Minister said, as if mourning something sacred and cherished but irretrievable. The Liberal Democrats are riding an anti-Trump wave but for the Labour government the US president remains the Great Unnameable. They indulge and flatter Trump but feel unable to condemn his excesses for which they are reviled by the left.

Friedrich Merz, the incoming chancellor of Germany and a longtime Atlanticist, has said his country must “achieve independence from the US”. Labour disagrees. Nor is Starmer interested in pursuing the old Gaullist dream of strategic autonomy or of striking anti-Trump postures in pursuit of short-term popularity. Starmer accepts that Britain is too intertwined with and dependent on the US for security, defence and intelligence to risk destabilising the alliance.

A capricious and unreliable American ally and the Ukraine war have galvanised Labour and presented Britain with an opportunity to lead in Europe for the first time since the 2008 financial crisis: as the post-Cold War order crumbles Starmer is assembling a coalition of the willing in pursuit of a resilient peace in Ukraine and aspires to be, as Healey puts it, “democracy’s most reliable ally”.

The party system may be fragmenting, with the Greens, Liberal Democrats, the SNP and Reform gaining support at Labour’s expense, but the government wants to use these moments of crisis to pursue new ideas - the “rewiring” of the state, a defence-security-industrial strategy that it thinks could lead the revival of marginalised post-industrial towns and cities where Reform UK is strong. The intervention to save the Scunthorpe steelworks – the strategic mismanagement of which is a parable of the modern British state – is fundamental to government strategy, Healy told me as we chatted on the train back from Brussels, because having “British made steel is a matter of national security”.

But contradictions abound. Starmer demonstrates purposefulness on the world stage but struggles to tell a convincing story about what the interconnection of foreign and domestic policy means for Britian in this new political era. If globalisation is over, what comes after it? Starmer has not said.

The question Labour must also answer before too long if unrest among its MPs is to be contained is: who’s in charge of economic policy, the chancellor or unelected mandarins? The Chancellor’s senior colleagues are not openly critical of her performance, and yet they continuously complain about “Treasury orthodoxy”, which is a euphemism for Britain’s broken economic model. “But it’s not simply about economic policy,” one senior adviser said. “The power of the Treasury is the consequence of the absence of any political narrative and strategy at the centre. There is no political economy because the leadership never took its need seriously.”

Starmer and Healey, who became shadow defence security in 2020, insist they were well prepared for the second Trump administration. The fragility of the new world order has reinforced their conviction that there is no alternative to rearmament and pragmatic engagement with Trump and Maga America as the government scrambles to avoid permanent tariffs of 10 per cent on exports to the US. But Labour needs more than pragmatic engagement: it needs a comprehensive joined-up policy programme commensurate with the crises at home and abroad. For better or worse, Starmer now leads a security government. The era of Hard Labour has begun.