Senior figures in the Labour Party always knew it would be difficult heading into government after so many years in the political wilderness, but in truth most didn’t realise precisely how difficult it would be.
Preparations began more than two years ago for ‘the transition to power’, working with and specifically hiring many civil servants to address the experience gaps in the political team. A lot of attention went into understanding how government works in each department.
In reality, it has been central, not departmental problems that have caused the new government most difficulty. The Gray/McSweeney power struggle has been accompanied by a series of political miscalculations, reflecting an absence of political grip. After all, few would have expected Labour’s first 100 days to be dominated by donation scandals, infighting at the top of the party and accusations of broken promises over winter fuel payments.
For a party that won a huge mandate on a message of ‘change’, our assessment is that Labour’s first 100 days has not yet delivered. The delay of the Autumn Budget has also meant that the government has hamstrung itself, unable to make spending commitments and therefore continuing a huge amount of policy uncertainty. This has left further frustration from business and industry that have been calling out for more detail.
But an absence of detail provides opportunity for businesses that possess workable solutions to problems Labour has inherited from the Conservatives. Ministers insist they are keen to build relationships with industry and so it is imperative those offers are taken up and opportunities spelt out.
Recap: Labour’s business agenda since taking office
From pessimism to opportunity: During party confidence Starmer sought to reassure business after drawing fire for the pessimistic fiscal outlook put forward by the party over previous months. At Labour’s “business day”, where tickets for the event cost £3,000, Starmer was at pains to stress his government viewed the private sector as a partner, understanding the mission on economic growth could not be achieved “on our own”.
Infrastructure focus: Darren Jones announced today that the government would bring infrastructure delivery under a single body, “the National Infrastructure and Service Transformation Authority” in a to tackle the systemic issues plaguing the roll-out of nationally significant projects and restore private sector confidence in the UK. Businesses will hope this marks the start of concrete policy plans, which have been few and far between until now, with questions remaining over just how the Starmer plans to reshape Britain.
Unlocking investment: With the investment summit next week and budget looming at the end of month, pressure is on the government to provide clarity and restore business confidence, to attract private capital and realise economic growth. In a fiscally constrained environment, Labour need private partnership to unlock the active state role envisaged by Reeves’ securonomics.
The new deal for workers
The government unveiled its Employment Rights Bill as part of its plan to ‘make work pay’. In total, 28 individual employment reforms will be brought forward under the bill, including:
- basic employment rights from day one for all workers. In practice, individuals will be entitled to take parental leave and sick leave from their first day of employment, and will be protected from unfair dismissal from ‘day one’, thereby removing the existing two-year qualifying period. A new right to bereavement leave will also be established;
- flexible working will become the default for all workers from day one, with employers required to accommodate this unless it is ‘not reasonably practicable’;
- a ban on ‘exploitative’ zero-hours contracts, introduction of new anti-avoidance measures and a new right to a contract that reflects hours that are regularly worked over a 12-week reference period; and
- a commitment to consult on a new statutory probation period for companies’ new hires – it’s preference is a nine month period.
A cautious welcome from business: The CBI has praised the government’s ‘willingness to engage with businesses and unions’, yet it notes that many critical details of Labour’s plan remain subject to consultation and stresses the need to ‘build on the good engagement to date’. Others have raised concerns about the lack of detail currently available and the difficulty smaller businesses will face in navigating the changes.
Potential impact on employment: More troubling may be the potential impact the reforms will have upon businesses hiring practices, with 57% of business leaders saying they will be less likely to hire new workers as a result of the employment rights changes, according to survey conducted by the Institute of Directors.
Trade unions, are in the main celebrating the bill as a major ‘win’. New rights of access will be introduced to allow trade unions to ‘meet, represent, recruit and organise members’. Moreover, the government has committed to consult on reforms to ‘modernise and update trade union laws’, with the potential to inform further amendments down the bill’s passage.
A dollop of political self-interest. It’s interesting to note the government’s intention to consult on scrapping the ballot requirement on trade unions’ political funds (i.e. money they wish to spend on party political activities). Scrapping the requirement to hold a full postal ballot of members every ten years - to confirm whether they want to keep the fund - will clearly benefit Labour, a Party established by unions and with whom most remain affiliated with.
Consultations matter. The full impact of the Employment Rights Bil will only really be determined post-consultation. With consultations due to kick-off in 2025, the government states the majority of the reforms will take effect in 2026 at the earliest – although given the complexity of employment law changes, this may prove an optimistic timeframe. Nevertheless, the government has separately committed to implementing the reforms to unfair dismissal (day one rights) ‘no sooner than autumn 2026’.
Conservative leadership – and then there were two
After months of speeches, hustings and behind-the-scenes wrangling, Kemi Badenoch and Robert Jenrick were yesterday chosen by their fellow MPs to be the two leadership finalists to face the Conservative Party membership.
It was not without its drama. Centrist James Cleverly had topped the MP poll the previous day, before being unceremoniously and unexpectedly dumped by his colleagues just 24 hours later. Conspiracy theories abound - did team Jenrick lend him too many votes and recalled them for the final push? Did his pole position give Cleverly’s supporters too much confidence, leading them to erroneously trading away too much support in an attempt to manipulate the final battle?
Whether through error or conspiracy, the result is that members now have a choice between two self-styled right-wing candidates; Jenrick - who is standing on a platform to leave the ECHR, slash immigration and return to ‘traditional’ conservative values - and Badenoch, who is fiery and forceful but consequently prone to making controversial statements that distract somewhat from her plans for both party and country.
Which will be better for the recovery of Conservative fortunes? Who will be able to strengthen the grassroots, taking the fight to Labour, the Lib Dems and Reform? Which of the two will Sir Keir Starmer want to face least across the Despatch Box? And will they survive until the 2029 General Election?
Jenrick and Badenoch will spend the next few weeks touring the country trying to woo as many grassroots supporters as possible. The result is expected to be announced on Saturday 2nd November.
If you would like to get in touch with the team, please contact Head of Public Affairs, Tim Snowball, at tim.snowball@mhpgroup.com