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Archive for July, 2019

What if he fails? A public affairs guide to an unsuccessful Boris Johnson premiership

We are on the eve of a Boris Johnson government.  In the context of the many challenges it faces, WA is scenario planning around whether it succeeds or fails.

Yesterday we published our thoughts on what a Johnson government might look like, if it succeeds.  Here are our thoughts on what a Johnson government may look like if it fails, and our advice for companies looking to work with the government.

As part of this ‘failure scenario’ we cannot dismiss the iceberg that is Brexit. It is inevitable that the first 100 days of a Johnson government will be consumed by the same challenges that eventually brought down Theresa May.

His chances of getting a deal? Slim, and getting slimmer every time he hardens his red lines as he did earlier this week. He faces exactly the same structural challenges as Theresa May:

  1. No overall majority: even with DUP support his working majority will start at three, likely to be reduced to two in the Brecon and Radnorshire by-election
  2. An apparent majority against no deal in Parliament
  3. No indication whatsoever that the EU is willing to make any significant concessions on the deal offered to Theresa May

These inescapable facts are on a collision course with Johnson’s clear and repeated pledge that the UK will leave the European Union on 31st October. A technical majority of two isn’t worth much when you factor in known ardent remainers such as Dominic Grieve, as well as the recent pronouncement of Guto Bebb that he essentially won’t support a Johnson government.

Put simply, just getting past October 31st will be a major challenge. But supposing he does. What then can we expect?

A court of competing factions, each seeking to curry favour with the Prime Minister and following competing agendas. The risk being that policy making across government is even less joined up than usual with separate fiefdoms jealously protecting their own turf. Contentious issues such as immigration will, in particular, fall victim to internal spats over what the future direction of the UK should be post-Brexit. Demonstrating the benefits of ending freedom of movement will quickly run up against the economic reality of an economy held back by more vacancies than it can fill at a time of record high employment. This is not a recipe for certainty for business.

Detail-light, unachievable announcements. Impressive sounding proclamations and policy targets will be made before any credible, worked through plan to deliver them is in place. Ministers and advisers will be left to back fill the detail of how to actually make them happen. Rolling out full fibre broadband by 2025 is just the first example of a welcome but very stretching ambition that will be handed over to others to realise. Some of these announcements will turn out well, but many will waste time, money and effort, both of civil servants and industry, on white elephants – think Boris Island and the Garden Bridge.

Enduring Brexit splits. Whether a deal has been done or not, the Conservative Party’s deep Brexit wounds won’t heal overnight. Under a deal scenario, we will face another two years of debate over the future relationship while sitting in the transition phase. Many policy debates will be distorted by whether the desired outcome is to further distance the UK from Europe or to steer a course keeping us closely linked to the Single Market. Johnson’s attempts to promise different things to different factions will only exacerbate this problem. Following a no deal, there will be blame shifting and recriminations.

Our public affairs advice to companies looking to work with the new government under this scenario is as follows:

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Johnson reshuffles his cabinet, what does it mean for investors?

Boris Johnson announced his arrival at Number 10 last week with one of the most comprehensive -and arguably ruthless – Cabinet reshuffles in modern history. With so many new arrivals in Cabinet, the biggest questions for investors will be the style of governance of the new PM, his policy priorities (other than Brexit, of course), and whether and to what extent his infamous “f*ck business” comment will reflect his approach now he’s in office.

Whilst the immediate priority within government remains that of no-deal preparations, Johnson has started his time in Number 10 with a bang, announcing a raft of new spending initiatives designed to boost domestic growth, particularly in the “left behind” regions, such as the post-industrial communities in the Midlands and North that swung heavily behind the Leave campaign in 2016. Johnson is likely to stick to this approach in the coming months, combining tough talk on Brexit with a feel-good domestic agenda based on significantly increased government spending.

With so little policy decided, the most useful indicators are the new Cabinet Ministers themselves, and their own priorities in key sectors. Johnson’s preference as a leader will be to delegate much of the decision making to Cabinet Ministers while positioning himself as a ‘figurehead’ for the government, in much the same way he did at City Hall. Investors should expect each government department to have significantly more free rein to pursue policy objectives than under Theresa May’s tenure, setting the scene for a faster pace of policymaking, driven by the individual goals and interests of Ministers.

A key player in unlocking all this newly promised money will be Chancellor Sajid Javid, who has championed increased spending across government in the past. Johnson’s early priorities of increased spending on schools, the police, housing and infrastructure are all causes Javid has supported in the past, often clashing with May in doing so. He continued this advocacy during the leadership campaign, promising a £100 million infrastructure fund and greater support for house building should he be chosen to lead the party. With Javid now settling in at Number 11, expect considerably less resistance to higher spending from the Treasury than we saw during Phillip Hammond’s tenure.

Health and Social Care

Although Matt Hancock remains in post at the Department of Health and Social Care, there is likely to be a shift in some of Hancock’s core policies – from softer issues like prevention and tech, to stronger vote-winners, including significant investment in hospital upgrades and progressing social care funding reform.

During his leadership campaign, Johnson’s libertarian instincts prompted him to suggest a rethink on the expansion of ‘sin taxes’ – including the controversial sugar tax – which was a key aspect of Hancock’s newly announced prevention model. So while Hancock had made a big push on prevention over the past year, his main proposals may never be implemented.

On the capital investment front, NHS trusts and providers have become increasingly strident in their calls for more money for buildings and equipment. Getting more money to the frontline is seen as a potential vote winner and a way to counter Labour’s traditional strength on the NHS. For investors, it also opens up opportunities for providers of services, upgrades and equipment across healthcare estates.

Social care reform continues to be challenging as the government balances the need to be seen to take action on the issue with the risk of public backlash against the proposals. If Johnson ploughs on without calling a general election, his working majority of two means getting any legislation through parliament – particularly on a sensitive and historically intractable issue– will remain a potentially Sisyphean task.

Prior to Johnson’s election, Hancock had stated that he had been beavering away on his own solution to social care funding, namely an additional £3.5 billion-a-year from Treasury coffers, combined with a voluntary insurance model. This solution has been heavily criticised by the House of Lords Health and Social Care Committee, and the likely tax increases needed to fund this approach are unlikely to go down well with Hancock’s new Cabinet colleagues, or with the Conservative grassroots. Hancock may well be forced into adapting yet another policy to suit the changing political winds. The long-delayed social care green paper, which the sector has been awaiting since the summer of 2017 and is now provisionally slated for publication this autumn may be the first indication of whether the government’s approach to social care has changed, and how bullish it intends to be in pushing forward with its proposals.

Any new funding for social care is likely to be positive for investors. Hancock has already shown his ease with the delivery of health and social care services by private and independent providers, and innovation driven by the private sector will remain a key part of his strategy to make sure the UK’s health system is fit to meet 21st century demands. Innovative, cost-effective solutions to social care, public health and disease prevention are likely to be the order of the day, with healthcare businesses offering these solutions likely to benefit from government support and funding.

Energy

The appointment of Andrea Leadsom as Secretary of State for Business, Energy and Industrial Strategy (BEIS) is likely to signal continuity for the energy aspect of her brief, but businesses may be wary of her pro-Brexit stance. Leadsom’s predecessor, Greg Clark, was a committed Remainer who was incredibly mindful of the concern businesses felt over a possible no-deal Brexit. Leadsom, on the other hand, is openly comfortable with no-deal, something that is unlikely to sit well with the UK’s industrial and manufacturing sectors.

Leadsom is likely to combine green energy initiatives, like promoting electric public transport and decarbonisation, with advocacy for the continued use of gas, nuclear energy and fracking. She has previously stated that “fracking is one industry that represents a huge opportunity for the UK, and our regulatory environment for it is the safest in the world.” Leadsom has previously called for the end of renewable energy targets and was involved in the reduction of green energy subsidies during her tenure as Minister for Energy and Climate Change. However her approach to energy at BEIS is now likely to be tempered by her new boss wanting to showcase the government’s environmental credentials.

Johnson’s early statements on energy are good news for investors, having stated that he intends to ensure the private sector is at the forefront of efforts to tackle climate change. He has pledged to keep the current target for net-zero carbon emissions by 2050 and has developed a notable habit of referencing climate change in his speeches.  Could this be to distract from the fact that little in the way of concrete policy has emerged so far? Brexit, and the extent of the Cabinet reshuffle, means that the long-awaited energy white paper is likely to be delayed until late autumn 2019 at the earliest. Key issues likely to be addressed in the white paper, when it emerges, include a new approach towards the funding of nuclear power plants and carbon capture and storage. Alongside this, BEIS and Ofgem are planning a shake up of the energy retail market and are currently consulting on proposals to ensure customers are able to benefit from a low carbon, flexible energy system. This is likely to include changes to the regulatory framework and measures to ensure energy remains affordable for customers following the end of the energy price cap, which is currently due to end in 2021. Given the consistent focus of Labour on energy prices and the behavior of utility companies in general, the Conservatives are likely to develop and adopt consumer protection and green energy policies as a priority to counter this narrative.

Outsourcing

The prevailing mantra of the Conservatives will continue, namely that the private sector is good for the public sector. Nevertheless, the post-Carillion approach to outsourcing within government is still in the midst of major change, with former Cabinet Office Minister David Lidington having published a new ‘Outsourcing Playbook’ to guide all government departments through the process of future outsourcing of public sector contracts. Lidington resigned from his post with work still unfinished on the social value aspect of the government’s new outsourcing policy, designed to act as an extension to the guidance laid out in the Playbook. While most of the work has already been completed, Boris Johnson’s libertarian instincts may push outsourcing reform further down the government’s agenda, meaning Lidington’s work may remain incomplete, at least for the time being. Lidington had been working towards the introduction of a social value model for outsourcing, which would ensure government considers the wider value of their contracts, rather than awarding them to businesses on cost grounds alone. It was hoped this would ensure outsourcers demonstrate transparency and a strong ethical background well before contracts are approved. This would mark a significant change of direction for a Conservative government, which has traditionally relied on a strictly market-based approach to outsourcing. Given that Lidington’s successor, Michael Gove, has defended the government’s outsourcing policy in the wake of Carillion’s collapse, describing its failure as “business-specific,” he may be keen to focus on other, more pressing matters.

The government will also need to find a replacement for Private Finance Initiatives (PFI), which were scrapped for new projects by Chancellor Philip Hammond at the 2018 Budget. It is highly likely that at least some of the major infrastructure plans currently being announced by Johnson and his team will need to be delivered in partnership with the private sector, something that the PM and his Cabinet are keen proponents of. Johnson has already discussed working with the private sector to improve regional bus services and increase green energy usage. How exactly he plans to work with private companies to finance his ambitious infrastructure plans is not yet clear, but investors can be almost certain that Johnson envisages a key role for the private sector in seeing his grand plans through to fruition.

Education

While new Education Secretary Gavin Williamson is something of an unknown quantity at the Department for Education (DfE), there is one aspect of his brief he has maintained a long-standing interest in: apprenticeships. Williamson has previously described apprenticeships as “vital” in reducing youth unemployment and has said that he wants them to be seen as “equal to if not better than, going to university.” We can anticipate that Williamson is likely to deviate from his predecessor, Damian Hinds, who largely focused on schools policy within his brief. Williamson has taken over direct responsibility for the old skills portfolio, including apprenticeships, signaling the importance with which the government views the issue. However, as the skills brief was formerly the responsibility of an individual minister, there are risks it will no longer receive the attention it needs from the new Secretary of State, who will have to balance the brief with other issues in his portfolio.

Other education policies have been dictated by Johnson in the form of early promises of funding increases. Education funding was in danger of becoming a toxic issue for the Tories during the final months of May’s tenure, with government statements on increased funding contrasting badly with tales of schools being forced to close early due to a lack of funds. Johnson has made it clear he wants to address this and has already pledged to increase the education budget by £4.6 billion a year by 2022-3. However, all this would do is return the education budget to its 2015 level, a settlement unlikely to satisfy the powerful teaching unions.

Responding to the Augar Review of further education will be a near-term priority for the new Education Secretary. Recommendations include a cut to tuition fees for domestic university students (a policy strongly opposed by Jo Johnson, Universities Minister and younger brother of the new PM). The report also calls for increased funding for alternative forms of higher education, which is likely to be viewed positively by Williamson and his new team. Williamson’s existing interest in apprenticeships will mean these recommendations are received sympathetically, while an increase in funding for regional further education colleges is also likely as part of the Prime Minister’s pledge to reinvigorate ‘left behind’ towns.

Transport and Infrastructure

Echoing his priorities as London Mayor, transport has been an early focus of Johnson’s, forming a major part of his strategy to create economic prosperity across all parts of the UK. In addition to the likely continuation of HS2 despite opposition from some in cabient (Andrea Leadsom remains strongly against the new line) Johnson hasn’t been deterred from announcing a new high-speed rail network from Manchester to Leeds as part of the Northern Powerhouse project. Further big transport projects are likely in the near future as Johnson tries to bolster his credentials as a Prime Minister unafraid of large investment projects, drawing a further clear distinction between himself and his spending averse predecessor.

The appointment of Grant Shapps as Transport Secretary suggests some big projects are on the cards. Until his appointment he was Chair of the British Infrastructure Group of MPs, championing greater investment in airports and broadband across the UK. Shapps is a vocal proponent of the Heathrow expansion and his appointment indicates that Johnson will be quietly sweeping his previous opposition to the project under the political carpet.

Rail is also likely to be in for a shake up. Shapps’ Welwyn constituency is a commuter town that was seriously affected by the Thameslink timetable meltdown in 2018 and he has previously called for Thameslink to be stripped of the contract with immediate effect. There is plenty in the way of both large-scale and shovel-ready infrastructure projects that Shapps could focus on, including the expansion of the East Coast Mainline and greater investment in modernising the UK’s rail network.

Beyond transport, Johnson has made an ambitious commitment to accelerate the roll out of full fibre broadband, bringing forward the government’s target for achieving national fibre coverage from 2033 to 2025. Johnson has made this a key part of his domestic policy platform, referencing it in every major speech he has given so far, though without providing any detail on how he hopes to achieve this. The pledge is ambitious given the roll out is dependent on the work of private companies, but Johnson has nonetheless put pressure on Nicky Morgan in her new role as Secretary of State for Digital, Culture, Media and Sport to deliver on the target.

Financial Services and the City

The appointment of Sajid Javid as Chancellor is likely to be one of the most complex for investors to negotiate. On the one hand, Javid is a former investment banker who knows the City and is sympathetic to its concerns. On the other, Javid has signed up to manage the finances of a country openly moving towards a no-deal Brexit.

In the run-up to October 31st at least, we can expect Javid to preside over the kind of spending increases that will make former Chancellor Philip Hammond despair. Having been in office only a week, Boris Johnson has already signed off on policies worth more than £9 billion, not including those made during the leadership campaign. It is now Javid’s job to find the money while doubling-down on no-deal preparations and ensuring the UK is prepared for the potential economic disruption that may come on its coattails.

On broader fiscal policy, Javid is likely to increase support for entrepreneurs and small businesses, potentially through tax cuts or other financial incentives. Investors should expect an emergency budget in October following the Conservative Party Conference, in which Javid will set out his plans in more detail. This is likely to include broad tax cuts to support the economy through Brexit-related uncertainty, and further investment in infrastructure and public services.

Since Johnson entered Number 10, he has been noticeably quieter on fiscal policy, preferring big infrastructure announcements to generate headlines. However, neither his supporters nor his opponents will let him forget the pledges he made during the leadership race, during which both Javid and Johnson set of a similar vision for taxation. Johnson’s most headline-grabbing pledge proposed raising the higher rate income tax threshold from £50,000 to £80,000. According to estimates by the Institute for Fiscal Studies (IFS), this would deliver a tax break worth £9 billion to 4 million people in the UK, with top earners benefitting the most from the changes. Javid also spoke in favour of tax cuts for high earners during the leadership debate, though he steered clear of any specifics.

How can we help

Much of Johnson’s early approach to government rests on generating economic optimism through high spending, and more widely by trying to harness what’s left of the UK’s joie de vivre. Nevertheless, there are clouds on the horizon and Johnson’s honeymoon period already looks swiftly to be coming to an end.

WA Investor Services can support investors in scenario planning for the new government in the months ahead, ensuring you are ahead of the curve when it comes to the restless world of policy and regulation in the current climate.

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What if he succeeds? A public affairs guide to a successful Boris Johnson premiership

We are on the eve of a Boris Johnson government.  In the context of the many challenges it faces, WA is scenario planning around whether it succeeds or fails.

Here are our thoughts on what a Johnson government may look like, if it succeeds.  In the next couple of days, we’ll provide an alternative analysis of what failure looks like.  In both we provide our advice for companies looking to work with the new government.

The success story obviously assumes that Johnson somehow delivers Brexit.  Taking this as a starting point, his government will be busy:

Generating a sense of national optimism.  There will be carefully managed cross-country visits, flag waving and the odd zip wire moment.  Johnson’s joie de vivre will contrast to the seriousness of our other politicians to capture some of the 30-35% of the electorate who don’t normally vote.  The approach will be continuity with his Brexit narrative of hope.  It will be framed as GB unity – echoes of winning back a lost ‘global Britain’ – but will mainline to English nationalism to shore up leavers across the country in preparation for an election.

Unveiling a framework economic strategy to make Brexit a genuine success.  Expect a more bullish positive economic vision of the opportunities for the industries of tomorrow.  There will be activism on innovation, high-tech hubs and collaboration between entrepreneurs, finance, universities and government.  Government will play even more of a role as funder and pump-primer of innovation, and as opener of new market access opportunities.  There will be an immediate deregulatory drive and the beginnings of an overhaul of the structure of regulation, in order to promote more competition and support high-productivity sectors.

Preparing for an Early General Election.  This means campaigning and not policy-making in any great detail.  Proven campaigners will be given the prime Cabinet positions and will focus on big announcements of retail policies that start a long election campaign.  Detailed policy-making will be left to departments, largely centred on junior ministers, SpAds and the civil service.  More controversial areas like social care funding will be left unaddressed.  Manifesto development will get fully underway, and the manifesto will be about tone, not detail.

Under this successful scenario we don’t believe that there will be a cabal of ideologically-driven advisers, waiting in the wings e.g. drawn from the ERG, Lynton Crosby or Steve Bannon.  No one group of advisers will ‘run’ Johnson.  He is a liberal and he will delegate and distribute power across a wide group of people, keep an extremely powerful but non-ideological Chief of Staff close, and as we expect with all good politicians, play the many different factions – left and right, Brexit and Remain – against each other in order to remain safely in place for longer than most are expecting.

Our public affairs advice to companies looking to work with the new government under this scenario is as follows:

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Prosecco & political insight for WA’s summer party

Thursday 11 July was a warm, balmy evening – perfect for our Annual Summer Party! The evening was a great opportunity for us to celebrate and look back over the first half of what has already been another successful year for WA – and of course to look forward to more success for the rest of 2019.

We were delighted to be joined by Katy Balls, the Deputy Political Editor of the Spectator and host of the Women with Balls podcast, who was on hand to talk us through her understanding of the current political landscape and give us her predictions for the Conservative leadership election. Katy quipped that it was great to be at a Westminster Summer Party where the speaker wasn’t vying for the job of Chancellor – not yet at least.

Whilst much of Westminster has all but accepted that the next leader of the Conservative Party is going to be Boris Johnson, this is not a dead cert according to Katy, who told us that not as many Tory party members have returned their postal ballots as had been anticipated. This means that there is still a lot for both Johnson and Hunt to play for, and a lot of room for both candidates to get things wrong.

As to the candidates’ respective popularity with the parliamentary party, Johnson is now a lot more popular amongst his colleagues than had been previously thought – which we saw evidence of with his dominance of the parliamentary ballots. The parliamentary party needs a Brexiteer like Johnson to fend off the threat of the Brexit Party. However, Katy told us that it could also be put down to the Johnson campaign being a tighter ship than it was in 2016, being comprised of a strong team of experienced and respected advisers.

So, if it is to be a Johnson premiership, what would the government look like? Where May was often perceived to be threatened by the big names in her cabinet (leading her to choose loyalty over ability), Katy’s view is that Johnson is happy to have a team of Tory party A-Listers, and that he wouldn’t shy away from playing factions off against each other. Expect to see former leadership rivals in senior posts, and the return to the frontbench of Johnson loyalists.

Yet it is important to remember that the change in leader does not change the numbers in parliament, and the new leader is set to face many of the same challenges faced by May in terms of trying to push a Brexit deal through parliament.

Interestingly, Katy told us that Johnson is not as opposed to holding a second referendum as many might think, though it would be a last resort and he would, of course, campaign again for the ‘leave’ faction. Yet he would also likely pitch himself as a centrist and a liberal, Cameronite “One Nation” Tory to try to appeal to the middle ground of the electorate.

It was an informative discussion that helped to make the political climate seem a lot less murky – for now at least. We hope that everyone who attended found it as interesting and entertaining as we did.

A special thanks to Katy Balls for entertaining us with her insights, and to all our guests for joining us for a fantastic evening.

We hope to see you all at our next party!

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A year in WA Health

It’s a year since I joined WA’s Health Team – and I’m a firm believer of using anniversaries to look back and take stock. I joined as an account executive into what was a fairly new, but clearly ambitious health team. It was a daunting but exciting move.

Every company sells itself as a great company to work at. ‘Growing’. ‘Ambitious’. ‘Fun’. The usual selling points. For some companies, this is either wishful thinking or shrewd marketing.

It can be difficult in interviews to get the true sense of a workplace. All the same, I felt confident when I started working at WA that I had made the right choice and found a workplace where I could not only develop professionally – but also enjoy doing so.

And so, a year in, I can comfortably and confidently say that the gut instinct was right.

WA has a knack for attracting talented people who get along well and can work hard together but also genuinely enjoy going for drinks at the end of the week.

My background isn’t in healthcare. I’m a politics geek at heart. And the last year has pushed me to learn a huge amount. But working in this fast-paced environment has fast-tracked my learning and experiences.

I look back and can tick off my key ask of this job, which was to work on genuinely interesting and intellectually stimulating work every day; writing insightful reports and patient booklets, holding exacting but ultimately rewarding roundtables and events both in our office and in parliament, and advising them on strategic challenges. Just this week we supported a parliamentary event where Parliamentarians had their faces scanned to see skin damage.

Winning pitches and being nominated for awards have been particular highlights for me as well – and are the start of a trend I think we’re definitely going to continue.

Its genuinely impressive to watch how quickly my colleagues can get up to speed – and help me to as well – with the terminology and details of incredibly complex challenges. It’s always been important for me to be in a job where I can develop my knowledge and expertise – and though it sounds cliché I really do feel lucky to be in a position to learn so much from my colleagues every day.

I’m looking forward to the start of my second year at WA, and taking into consideration how the team has developed since I joined –  I’m confident that it’ll be even better than the first.

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Are Labour gambling on regulation?

On the face of it, the call from Tom Watson, deputy leader of the Labour Party, for more stringent regulation of the gambling industry is a typical Labour solution to a problem: more government intervention, more taxes and more money for the NHS. In a speech given at a Demos, the centre-left think-tank on 18 June 2019, Watson outlined his vision for a stronger regulatory system for the gambling industry. The tripartite structure he proposes involves the Gambling Commission taking responsibility for operators, a newly-created Gambling Ombudsman protecting consumers and an NHS programme coordinating research, education and treatment relating to gambling addiction. The new regulatory framework is to be funded either by a levy on gambling operators set at one percent of the industry’s gross gambling yield, or a system which draws a certain amount from the industry in response to a needs-based assessment; it is expected the measures will raise more than £100 million.

There are undoubtedly problems with the way some gambling firms operate, and an ombudsman working alongside the NHS could be the best way to protect and help vulnerable gamblers. However, there is a strategic element to Labour’s latest policy announcement. On the economy, Labour’s message is the current system is rigged in favour of a select few and does not adequately work for the ordinary man or woman in the street. Over the last 18 months, the party has chosen to focus its policy proposals on areas that reinforce their headline message on the economy: cracking down on outsourcing in the wake of the Carillion fiasco; promising to nationalise water companies after it emerged they had been loaded with debt and avoided tax while bills increased; and a commitment to better regulation of the gambling industry following revelations that some bookmakers had exploited vulnerable customers.

This is a smart play by Labour. It illustrates the party’s message with concrete examples and demonstrates the inability of what they see as the ‘neoliberal hegemony’ to work in the interest of regular people. Even better, it leaves the Conservative’s in an ideological check-mate. They can either oppose Labour’s arguments, or they can agree somewhat and present a diluted, ‘Labour-lite’ policy. If the Tories choose the former approach, they end up looking like shills for big business, playing into Labour’s hands; if they choose the latter, they run the risk of appearing as a pale imitation of Labour, allowing Corbyn to push the message that voters might as well vote for the real thing.

Many of Theresa May’s difficulties as a Prime Minister were caused by Labour’s strategic positioning on the economy. Theresa May, never a natural defender of the market, was always going to be drawn down the interventionist path. Notable examples of May’s willingness to eschew the market include the introduction of an energy price cap, and her attacks on executive pay and ‘corporate greed’. Brexit largely obscured the divisions May’s policy approach caused within the parliamentary party on these issues. However, when her position started to look untenable, ministers like Liz Truss began banging the drum for a more a more traditional Conservative policy programme: lower taxes and less regulation. This mood has been reflected throughout the Tory leadership race, with many of the candidates promising tax cuts and a more liberal approach to the economy. Rory Stewart’s elimination from the contest perhaps represented the final rejection of May’s policy approach.

While Labour’s strategy of highlighting the excesses of capitalism is a strong one, a Conservative leader better able and more willing to defend the virtues of the market will more easily avoid the trap that Theresa May fell into. Nevertheless, the debate on the economy and capitalism itself, ahead of the next general election is set to be the most polarised in a generation. Labour’s vision will have to extend beyond pointing out what is broken and offer a positive message about how they would reform the current economic model, and the Conservative’s will have to demonstrate how a freer, less regulated economy will work in the interests of the least well off.

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