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E-scooters at a crossroads
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Archive for the ‘Insight’ Category

What are the learnings so far at Integrated Care System (ICS) level to reduce health inequalities?

In conversation with NHS Gloucestershire Integrated Care Board (ICB)

The need for local community action to address health inequalities has never been greater. Over the last few months, we’ve seen a disbanding of the Office of Health Inequalities and Disparities (OHID), the government department set up to drive a meaningful step change in health inequalities.

However, with disappointment comes opportunity.

In a year of political change, many are looking to ICSs who have a statutory duty to reduce health inequalities, as the engines of meaningful progress. Now almost two years on since their formal legislation, each ICS is taking a different approach in response to addressing health inequalities, with great success.

We sat down with Becca Smith, Associate Director Clinical Programmes, Frances Beavis, Senior Project Manager and Natalia Bartolome Diez, Insights Manager EDI to talk about their tailored approach to working with people and communities, and why they are confident it is already working.

What are you doing differently to understand the nuances of the diverse community you work with?

Everything starts with building trust. Whilst national health campaigns over the years have had great results in shifting behaviour, it is the underserved populations that are often forgotten. There are multiple reasons for this, too many to get into today, but one of the most important factors is a lack of trust in the health system. We decided to create a new role, an ‘Insights Manager’ to act as the point of reference for many different religious, ethnic and social-economic communities into the NHS to work out how to overcome this. Our Insights Manager’s main role is to listen and to truly hear the needs of seldom heard communities. Doing this allows us to truly understand what we need to do differently, what are the simple fixes and what are the longer-term changes that will get the results these groups deserve. All good plans start without assumption, and we are seeing the benefits of this first hand.

And more broadly, how does addressing health inequalities fit within your wider organisation?

Often within an ICB, there is a dedicated health inequalities team. However, responsibility for health inequalities is also shared by team members across the organisation, including team members in specific disease areas −transformation roles as well as clinical leads may share responsibility.

If you are interested in collaborating with an ICB on a health inequality initiative, we would recommend mapping stakeholders via desk research. You should also be prepared to speak with several people within the ICB to identify the right person with responsibility for your area of interest.

Is it time to stop categorising ‘ethnic minorities’ into a catch all definition?

We have seen that there is real benefit in developing engagement strategies that are tailored to specific ethnic groups. There are different social and cultural norms between different groups and with this, different barriers and drivers. There can be a tendency to develop health engagement strategies for all ethnic minority communities but increasingly as a sector, we are understanding that engagement needs to be more specific. What might work for one community may not work for another.

Do you have any projects that show this new approach is succeeding?

There are a few examples that we are incredibly proud of.

Our collaboration with the Gloucester Health and Care Community Cancer team to host an early diagnosis in prostate cancer event for Black men demonstrated how local community events are starting to inform local policymaking.

Firstly, we made sure that the prostate cancer event was hosted in a local, familiar space that Black men attended regularly – in this case the local community centre. We also invited a range of people including doctors, clinical nurse specialists, support workers and a Black man with lived experience to provide information on the symptoms of prostate cancer, treatment options and support options.

During the event, attendees suggested some helpful screening recommendations, including offering a drop-in clinic at the community centre for prostate-specific antigen (PSA) testing. This will be discussed with Gloucester ICB’s Cancer Patient Reference Group, a group of people affected by cancer that inform the strategy and activity of the ICB.

We also worked with the Gloucester South Asian local community centre over the course of a year to explore barriers to NHS England’s digital diabetes platform, which sets out to help people manage their diabetes. We managed to identify specific language barriers and develop solutions to inform a national pilot programme.

It’s great to see these new approaches achieving high engagement from communities and now feeding in to how we shape our services in long-term chronic conditions.

If you are interested in further examples of local best practice or how to work collaboratively with an ICB, contact Rose Brade at rosebrade@wacomms.co.uk or Clara McDermott Simarro at claramcdermottsimarro@wacomms.co.uk.

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Unravelling the Budget – Health and Life Sciences reflections

Alongside the economy, health is one of the top concerns among the electorate. In today’s Budget, likely to be the last before the General Election, the Chancellor made announcements which will have implications for the healthcare system and clients alike. 

Here, we take a look at three key take aways for the health and life sciences industry:

An efficiency saving trade-off for the NHS 

The Chancellor’s flagship Budget announcements were largely based on personal finances. This includes a 2p cut to national insurance tax, freezing fuel duty, and raising the child benefit cap. Despite this, Hunt did find room for one significant financial package for the NHS – £3.4 billion of funding towards the NHS Productivity Plan.  

The Productivity Plan aims to fund digital advancements across the board, including for AI MRI scanners, ungraded IT systems and digitally enabled prevention services. The plan will also fund electronic patient records in all NHS trusts by 2026 – something initially committed to by Hunt when he was Health Secretary in 2013.  

This funding package and the commitments attached to it should be welcomed; however, they will be delivered alongside an expectation that the NHS achieves annual productivity growth of 2%. In the wake of ongoing industrial action and the largest real terms cut to NHS funding since the 1970s, this may be difficult to achieve.  

Clients engaging with the NHS should bear this in mind – policies and proposals that offer productivity gains or efficiency savings will be warmly welcomed.  

Scuppering Labour 

Hunt’s unexpected decision to reform the non-dom tax status takes away the only funding source for Labour’s health service reform plans, just as they will have finalised their manifesto commitments.  

Shadow Health Secretary Wes Streeting confirmed yesterday that this leaves a hole in their funding allocation, and they would have to look at alternatives. Hunt’s decision to act here puts a sizeable spanner in the works for Labour’s health mission.  

While there is nothing to suggest that Labour are inclined to move in an entirely new direction, this new development will likely require them to consider their priorities and rethink their direction of travel in health policy.  

What about Life Sciences?  

Hunt’s budget this year reaffirmed the Government’s position placing Life Sciences as a key growth sector in a series of announcements including funding for medical research charities and R&D tax reliefs. He hailed the success of AstraZeneca’s £650m investment in R&D and manufacturing sites in Cambridge and Liverpool respectively. 

Richard Torbett, CEO of the ABPI, suggested that this shows UK medicine manufacturing can be reinvigorated if the policy environment is right. The policy environment he refers to is one that values growth, jobs and investment.  

This is a mindset shared with Labour. Attracting Life Sciences industry investment is central to their plan for the sector and wider ambitions for growth. Any opportunity to leverage home-grown domestic growth and inward investment will be looked on favourably.   

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Spring Budget – Moving the political dial

Today’s heavily trailed Spring Budget demonstrated the difficulty the government will have in moving the political dial before the General Election.

Chancellor Jeremy Hunt has been operating under tight fiscal margins after ONS data showed the UK entered a ‘technical’ recession at the end of 2023. Nonetheless, news from the OBR that the government had more than halved inflation since November 2022, the top priority on Rishi Sunak’s 5-point plan, gave Hunt the confidence to cut taxes for a second time, in what could be their last opportunity to appease voters.

According to the OBR forecast today, the economy is expected to grow by 0.8% this year and 1.9% in 2025. That is slightly stronger than the 0.7% and 1.4% growth rate expected at the time of the Autumn Statement in November.

In this economic context, it was no surprise that Hunt’s speech was marked by a series of smaller scale changes rather than big policy interventions. Instead of an injection of cash to target waiting lists the Chancellor chose to announce an ‘NHS Productivity Plan’ to support a digital transformation within the NHS. On housing, a capital gains cut for residential properties was announced, but no sign of the rumoured Stamp Duty holiday for buyers.

At the heart of his speech was the 2p cut to national insurance, a measure that will partly be funded by abolishing the non-domicile tax status by 2025. This highly political move puts Labour on the backfoot by forcing Starmer to endorse the personal tax cut in his response, while creating a major challenge for a new Labour government, who have already allocated the money changes to the non-dom status will raise to the NHS.

There was also a notable continuation of existing commitments, with the freeze on alcohol duty and fuel duty both extended for a further 12 months. A U-turn on the household support fund, scrapped in the Autumn Statement, to provide an additional six months of funding also speaks to the Chancellor’s plan to push tough decisions until after the General Election, setting potential traps for a Labour government.

Whilst some fiscal headroom will be created through measures announced today, the reduction in national insurance will lead to a tighter squeeze on public services at a time when local councils are increasingly struggling with their budgets.

In his response, Labour Leader Sir Keir Starmer accused the government of “delusion” and “giving with one hand and taking more with the other”. He was quick to highlight that theft of Labour’s non-dom policy signalled “a government bereft of ideas”, and warned about stealth taxes that would swiftly follow through council tax.

However, pressure is now on Starmer and Shadow Chancellor, Rachel Reeves, to show how a Labour government will deliver economic growth and public sector reform without increasing taxation. This will become a lightning rod issue in the General Election.

Governments have a longstanding history of reducing taxes before a General Election to put more money in their voters’ pockets. However, there is scepticism within sections of the Conservative Party that today’s national insurance reduction will be enough to shift the political dial, after the Autumn Statement’s giveaways failed to do so. All eyes are on the polls over the coming days, as pressure grows on the Prime Minister and the Labour Leader, who now must navigate the fallout from today’s Budget.

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Navigating the Media in an Election Year

Uncovering, shaping and setting the political agenda, journalists across the media spectrum are important cogs in the wheels of Party decision making – particularly in the lead up to a General Election.  

Seeking to understand how media content changes, and adapts to, an increasingly polarised political landscape – and crucially how organisations can navigate this landscape and cut through the noise – WA Communications hosted Caroline Wheeler, Political Editor at The Sunday Times; Sam Rix, Senior News Editor at Good Morning Britain; and Steve Richards, WA Senior Adviser, broadcaster and journalist, for an in-depth panel session.  

This session is the latest in a series of WA events looking towards the 2024 General Election with senior political and media figures. 

Here are our main takeaways from the discussion, and our advice on how to navigate this shifting landscape: 

Setting the Agenda 

Although we live in an ever-evolving social sphere, the power of traditional media remains, driving public conversation and painting perceptions of those at the top of party politics.  

Sunday newspapers are the key orchestrators of this. Filled with whisperings from the corridors of power, exclusive interviews with key stakeholders, anonymous leaks and briefings and in-depth insights from company-led polls, print news holds influence over politicians, businesses and wider society – setting the weekly agenda and influencing broadcast coverage.  

In an election year, with people falling over themselves to have a say on the ongoing Labour-Conservative dividing lines, this influence is more heightened than ever.   

To achieve cut through, it will be important to align with the political narrative of the week and draw on ‘big splash’ interviews and regional political activities, offering new perspectives that play into shifting topics of interest. 

A Noisy Landscape  

The panelists painted a picture of an increasingly crowded media landscape this election period, pointing to strong voices on platforms like X – formerly Twitter – and the growing expectation for ‘all singing, all dancing’ interactive content.  

They noted how social media commentary from politicians, journalists and wider society changes media narratives and continually shifts agendas. Less ‘traditional’ channels like TikTok and podcasts are also increasingly shaping political rhetoric, driving news content, and maintaining – or often igniting – public engagement in certain stories.  

As we get closer to the General Election, we can expect media outlets to publish more data, audio, visual and short-form video content across Tik Tok, X and LinkedIn, as they continue their effort to keep abreast of the latest political developments.  

Surveilling and using these channels will be more important than ever in assessing how and where best to share your voice.  

Communication with Today’s Politicians  

It is no secret that media have long played into symbiotic relationships with politicians in Westminster, to obtain information and construct stories that shape narratives and connect with the public. 

Despite this, the panel outlined the hesitancy and cautious approach they have experienced from today’s politicians, who seem scared by a perceived threat of public-facing exposure. Whilst Conservative leaning papers struggle to show support for Rishi Sunak, Labour leader Keir Starmer struggles to engage with the media at all – a possible stumbling block in his leadership campaign.  

Overall, party communication with the media has been relatively weak, with the panel suggesting press offices are poorly briefed and spokespeople poorly guided. There are, however, some glimmers of hope for Labour in the likes of Wes Streeting and Lisa Nandy.  

Whilst the parties struggle to embrace media opportunities in the run up to the General Election, constructive engagement from businesses will be welcomed to fill this gap.  

Looking Ahead 

As the political landscape evolves, the panel predicted several key themes that are likely to shape media discourse in the coming months. 

This includes increased scrutiny over Government spending and party finances, particularly in areas related to green finance and cost-of-living. Artificial intelligence is also likely to have an increasing influence in the media, with deep fake clips resonating with social audiences. Beyond this, foreign affairs could play a more influential role in this year’s election, with a focus on the impact of the Donald Trump administration and the implications of the Israel-Gaza conflict.  

In light of these changing focuses, keeping an eye on media priorities will be the most effective way to determine which narratives to play into, which journalists and outlets are covering topics of interest to your business, and to pinpoint where you can offer new and stimulating perspectives. 

WA Communications works to help businesses navigate the shifting landscape, and land meaningful coverage across national, broadcast, trade and regional media.  

For more information on how WA can help, please contact media@wacomms.co.uk or get in touch with LeeFindell@wacomms.co.uk or RachelFord@wacomms.co.uk.  

 

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Regaining momentum: Labour’s double by-election win despite political difficulties

Last Friday, Labour gained a double by-election win in the Conservative safe seats of Wellingborough and Kingswood, despite a tough couple of weeks for the party politically.

Labour secured 44.9% and 45.9% of votes in Kingswood and Wellingborough, respectively, with a 28.6% swing in Wellingborough, making it the second biggest Conservative to Labour swing in a by-election since the Second World War.

Critically, this boosts Labour’s tally of seats gained from the Conservatives in by-elections since July to six.

Last month, WA were delighted to host political polling guru Professor Sir John Curtice. His analysis outlined many of the issues at play in these two by-elections – the Conservative Party’s misreading of public priorities, the rise of Reform, yet a mixed record and lack of enthusiasm for Labour.

A strong cause for Conservative concern

Locally, in Wellingborough, Helen Harrison, partner of the constituency’s former MP Peter Bone, emerged as the candidate. The by-election arose after the suspension of Bone following allegations of bullying and sexual misconduct. While Harrison expressed confidence that these distinctive circumstances would not affect her electoral prospects, it would not be unexpected if they had done so.

Conservatives like Jacob-Rees Mogg have pointed to low voter turnout as the crucial element responsible, with 38% in Wellingborough and 37.1% in Kingswood. But when you delve into the details, the argument loses its edge. Low turn-out in by-elections is not unusual, and considering Labour’s prior successes, it seems they have developed a trend of consecutive by-election victories.

Nationally, the Conservatives have faced a myriad of issues that may have impacted electoral outcomes:

On Thursday, the ONS announced that the UK economy is in a recession, adding to voters’ concerns about the NHS and the ‘cost of living’ crisis. This is a significant setback for Rishi Sunak, who pledged to ‘grow the economy’, and instead is now faced with a 0.3% shrinkage in the economy in the last quarter of 2023.

Another influential factor in shaping the by-election results likely stemmed from the government’s handling of immigration issues – where ‘stopping the boats’ is now closely intertwined with ‘stopping Reform’.

The by-election has underscored that significant challenge posed by Richard Tice’s party to the Conservatives. Reform fielded candidates in both by-elections, securing 10.4% of the vote in Kingswood, and 13% in Wellingborough – demonstrating that their appeal translates from hypothetical opinion polling into votes (and more … with Wellingborough’s 13% result for the party a record result, and comfortably exceeding its 10% national poll figure).

Plans to put up a candidate against every Conservative in the upcoming general election means the Conservatives may find themselves engaged in a multi-front battle that hands victory to Labour – Reform splitting the Conservative vote to the extent seen on Thursday could result in dozens more Tory MPs losing their seats.

Tough time for Labour politically.

But Labour has also had a tough time politically. (One poll by Savanta conducted the weekend before the by-election even suggested a seven-point drop for Labour).

One source of this political difficulty stemmed from the abandonment of their flagship £28 billion green energy spending commitment. This decision has proven to be a significant dilemma for Shadow Chancellor Rachel Reeves – as she tried to balance the overriding priority of demonstrating responsible economic stewardship, with a spending pledge portrayed by opponents as reckless, and the perception that a policy reversal portrayed the party as indecisive and overly responsive to opposition critiques.

A second political challenge had arisen from the controversial remarks made by Rochdale candidate Azhar Ali that Israel had used the October 7th attacks as a justification for invading Gaza. Many criticised the Labour Party for not suspending him fast enough. Given Keir Starmer’s efforts to distance the party from the Corbyn era, especially concerning accusations of unaddressed antisemitism, the handling of this situation created opportunities for the opposition to attack.

A further setback for the Conservative Party than a substantial advancement for Labour?

The outcome is the same nonetheless, Keir Starmer adds a further two seats to his tally of consecutive by-election victories, and the political weather moves on (at least for now) from what has been a difficult few weeks for the Labour Party leader.

The double by-election victory has undoubtedly alleviated concerns within Labour, suggesting that these challenges have not significantly affected voter behaviour.

But for the Conservatives, public enthusiasm has waned, perceived government failure on immigration is pushing voters towards Reform, and those Reform voters are turning out at the ballot box.

While there remains a question regarding the level of enthusiasm among voters for Labour, the party seems to be on a trajectory toward forming the next government – while the Conservatives added a new front to their list of problems.

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Tackling the £28bn question

It’s been the political headache facing Labour for nearly a year – questions over exactly how their Green Prosperity Plan will be funded and delivered. The multiple climbdowns and the significant deliberate ambiguity were not enough to fend off their critics, who identified – rightly or wrongly – an area of vulnerability for the party.

The electoral and political implications are dominating the media, but what exactly does this now mean for the energy industry?

  1. For industry, the ambition and targets are more important than the funding

While the media has been focused on the level and sequencing of government funding for the Green Prosperity Plan, for industry this is arguably the less critical issue. Generators and others in the sector want policy certainty and ambition in order to be able to make the case to their boards and investors to deploy capital in the UK.

The 2030 target – even if it is recognised as being virtually impossible to deliver – provides this. While backsliding over the £28bn figure could be perceived as a signal that Labour is wavering on green investment, it’s the 2030 target that really matters. Recommitting to this yesterday was key. The question now is whether Labour is willing to take the bold steps required to deliver it…

  1. As political and media attention shifts to how 2030 power decarbonisation can be achieved, there’s risks and opportunities for the sector

However, the reality is that the political and media focus will simply – and we’re already starting to see this – shift to scrutiny of how this target will be delivered, with critics arguing that Labour now have a hugely ambitious target in place with no investment behind it to enable delivery. The political argument that the government and others will prosecute will be that either Labour are selling a vision to the electorate that they know cannot be delivered and so aren’t prepared for office, or that there will inevitably be ‘secret tax rises’ coming to fund this.

Further backsliding from Labour on the 2030 target should not be expected, but the risk of disagreements opening up within the party over it is unhelpful for industry particularly if enhanced media focus ends up driving up public scepticism over the right route to net zero.

The opportunity for industry now is to highlight even more clearly how it will be private capital that will do the heavy lifting to decarbonise the economy. As Labour – and the media – look even more closely at how power decarbonisation is achievable, now is the moment – in a highly political year – for industry to be explicitly showcasing the projects that will practically get the UK to net zero.

  1. Strengthening the argument for bold supply side reforms?

To achieve private sector delivery at pace, the case for non-financial supply side reforms that enable projects to move from plans to reality in order to achieve 2030 power decarbonisation becomes even stronger. Grid connections and planning reform; swifter, longer-term and more consistent policy decisions; the right fiscal environment to encourage investment are all being pushed.

Ed Miliband has spoken ambitiously about a ‘Covid taskforce’ approach to government, hitting the ground running from day one to deliver the Clean Energy Mission. Industry is getting the right noises from government with a recognition that it gets the scale of the challenge, but if there is any chance of coming even close to the target, these things are now non-negotiable. Labour has already notionally committed to acting on these things, but the industry’s ability to press for these changes at pace and ensure full accountability for delivery has arguably been strengthened significantly this week with funding now reduced.

  1. There are inevitably still plenty of gaps

While the ‘plan’ published yesterday provides a little more detail in some areas – particularly on the Local Power Plan – there are inevitably still large gaps and areas where industry is still lacking detail.

There are also still questions over exactly how key parts of Labour’s net zero vision – including carbon capture – will be funded.

This gives industry the chance to continue to shape the right pathway for delivery. Labour wants solutions – ideally with no or little costs attached – that will help the delivery of its Clean Energy Mission. This is the moment for industry to share thinking on how specific elements of the plan can be implemented, aligning business priorities with Labour’s language, structures and funding envelopes.

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Labour and the Civil Service – Access Talks

So, access has been granted. One of the rituals of the run up to a British General Election can begin: the private, official talks between the Opposition and the Civil Service, which allow both sides to prepare for a possible change of Government.

When access should happen is down to the Prime Minister, and Rishi Sunak’s decision last week means he has already cut things fine for his opponents compared to some past Elections (2010 for example). But what happens in access talks, and do they actually matter?

To start with one thing that shouldn’t happen: don’t expect a running commentary in the press. Both civil servants and the Opposition are told to keep the discussions confidential, and past experience suggests this is one convention still observed. There are powerful incentives for secrecy: for Labour, it’s about message discipline running up to the Election; and for civil servants, it’s about building the confidence of your likely future employers.

It also helps to keep things secret when only a few people are involved. And this brings me to the first point about how access talks actually work: they’re tightly controlled and only a few people know what’s happening. For Labour they’ll be overseen by Sue Gray, and I think that will mean an even tighter and more disciplined process than usual.

Sue’s opposite number in Government is her former boss and Cabinet Secretary Simon Case, who’s now back at work. The first job for Sue and Simon will be to agree to some ground rules. One rule, for example, may be that a member of Keir Starmer’s office has to be present at every meeting. Only when the rules are settled will the shadow Secretaries of State and departmental Permanent Secretaries start talking to each other.

I was involved in access talks running up to four Elections from 2010 to 2019. My experience was they were taken very seriously by both sides and they actually mattered. These were discussions right at the top – between the shadow Secretary of State, the Permanent Secretary and just a few others on each side. They were an opportunity for the politicians to ask lots of questions about the department and the real challenges it faced, and for both sides to discuss the practical implications of big new policies. Above all, of course, it meant the senior people could get to know each other. On the official side the people involved were all very senior, DGs or above plus one (senior) link person, and the Opposition team was similar.

So given the secrecy and small number of people involved, what should businesses and other organisations with an interest be doing about access talks? Nothing directly I suggest. But this is still a critical time to engage the top of the Civil Service in every area: the approach just needs to be broader and more subtle than a focus directly on the access talks. Instead, every organisation should be asking itself about the evidence, insight and relationships that it can bring to bear, to help the senior people in departments through this phase and achieve its own goals. And there are plenty of lessons from 1997 and 2010 about how things can either go well for businesses – or badly.

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In Conversation with Professor John Curtice

Sir John Curtice, professor of politics at the University of Strathclyde, gave his views on the current state of play in British politics in conversation with Tom Frackowiak, Partner at WA Communications. With the Conservatives in “deep trouble” and Labour seemingly headed to power, his analysis of the polls shed a lot of light on the year ahead. 

The conversation is the latest in a series of events on the upcoming general election with senior political and media figures hosted by WA.  

Deep trouble for the Conservatives… 

With polling currently showing a 20-point Labour lead, it is easy to forget that for the first two years of this parliament the Government were never consistently behind the Opposition. The scale of the turnaround in the Conservatives’ fortunes can be put down to two decisive events: the unravelling of the Johnson Government due to the ‘partygate’ scandal, and the ongoing economic impact of the short-lived Truss Government. The first of these allowed Labour to decisively pull ahead of the Conservatives, while the latter pushed Starmer’s party up to 50% in the polls. 

Following the dramatic departures of his two predecessors, Rishi Sunak inherited the premiership amid high hopes that the popular former Chancellor could reinvigorate the Conservative brand and pull off a 1992-style election victory.  

However, his popularity has waned – having entered office almost 30% more popular than his party, both Mr Sunak and the Conservatives now have -49% favourability ratings. For this reason, Labour’s 20-point lead has remained consistent despite Number 10’s efforts. 

Sir John Curtice attributes Conservative malaise in the polls to a misreading of evidence on the issues that matter to voters. While Jeremy Hunt, the Chancellor, prioritises tax cuts, the public – including a majority of Conservative voters – favour using the proceeds of increased tax to invest in the NHS and tackle record-breaking waiting lists. With dissatisfaction with the health service higher than in 1997, rescuing the NHS will undoubtedly be a key issue during the general election campaign. 

On immigration, an issue prioritised by Number 10, the polling also suggests strategic errors. Not only does the subject not have the same salience to voters as the NHS or the economy, but evidence suggests that perceived government failure on the issue is pushing voters towards Reform UK rather than keeping them with the Conservatives. 

A mixed bag for the Labour Party… 

While it is undoubtable that the Labour Party owes much of its success to the chaos within the Conservative Party, they have made significant steps forward since 2019. With Jeremy Corbyn bequeathing just 203 seats – the worst general election result since 1935 – to Keir Starmer, the fact that they now look poised to win is a major achievement. 41% of voters now see Labour as moderate and only 19% as extreme, a major reversal compared to 2019. 

Nevertheless, weaknesses persist for Labour. Most prominently, Mr Starmer’s personal favourability ratings trail those of his party by between 5 and 10 points. This is a marked contrast to the superstar status of Tony Blair in the run-up to the 1997 general election.  

Labour has only a mixed record in its efforts to win back working class Leave voters. Amongst Brexit supporters – who overwhelmingly backed Boris Johnson in 2019 – Labour has gained some support since 2019. Yet more of these voters (17%) have switched their vote from Conservative to Reform.  

Labour has also not managed to reassert its traditional overwhelming dominance amongst working class voters, instead seeing a relatively uniform increase in support across class groups. 

Furthermore, a plurality of voters (44%) still believe that Labour is not yet ready to form a government. The party may be the bookies’ favourite to win the next election, but it seems that they will not be riding a wave of enthusiasm through the campaign. 

Despite these issues, changing electoral geography is turbocharging Labour’s large lead. Data from YouGov’s recent MRP poll – which prompted a great degree of controversy – shows Tory support experiencing its sharpest decline in Conservative safe and marginal seats, making Labour gains more likely. Meanwhile, evidence from the local elections in May 2023 show clear signs of organised anti-Conservative tactical voting among Labour and Liberal Democrat voters. Following the premierships of Johnson and Truss, unionist Scottish voters have shifted their support to Labour from the Conservatives – a trend that has only been exacerbated by the turbulence within the Scottish National Party. 

But take everything with a pinch of salt. 

As usual, disclaimers about the value of polling evidence must be borne in mind. Shock election results in 1992 and 2015 show that pollsters can get it wrong as methodologies are tweaked to adapt to societal shifts. But it is worth noting that even if the polls are overestimating Labour support, this overestimation would have to be unprecedentedly large for Labour to lose in the autumn. 

However, the UK electorate has shown itself to be increasingly volatile over the last decade. Poll watchers can no longer rest of simplistic assumptions. Boris Johnson believed in 2019 that he was headed for a decade in power but was proven wrong. With this in mind, it is not so hard to believe that Labour could win an historic majority in 2024 only to find themselves overwhelmed by the significant economic and international challenges facing the UK today. 

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A tale of two Cities: Labour’s vision for financial services

A tale of two Cities: Labour’s vision for financial services seeks to balance stability and reform

Labour’s Shadow Chancellor Rachel Reeves and Shadow City Minister Tulip Siddiq this morning showcased ‘Financing Growth’ – the party’s long-awaited review of financial services – to over 400 private sector leaders at its annual business forum. The scale of the event is reflective of the extensive engagement that the Labour Treasury and Business teams have conducted with the private sector over the last few years. The advisory panel that fed into this review is made up of leading members of the industry, policy and regulatory spheres – it is clear that Labour officials have put in the hard yards in engaging with the City on this work.

That said, while there are some significant new policies announced in the document, many of the key areas of focus will not come as huge surprise to those who have monitored the Shadow Treasury team’s comments over recent months. This stays true to Reeves’ stated aim of providing stability and security with her proposals, avoiding any major upheaval in policy to promote investor confidence and growth.

Expected measures to foster ‘stability and security’

This continuity is offered in Labour’s policies around consumer protection and financial inclusion; its plans for supporting and promoting the UK’s fintech sector; and in leveraging green finance as a crucial part of their wider environmental initiatives.

Increasing levels of consumer financial protection – particularly the regulation of the Buy Now Pay Later (BNPL) sector – is an area which Labour has signposted for some time it will move quickly on should it win power. Labour has used the absence of regulation brought forward on BNPL as a stick to beat the government with over the last few years – as such, Siddiq and Reeves commit in the report to bring forward their ‘industry-approved plan for regulation’ quickly after the election.

The same is true of the proposals for the fintech sector. With Ron Kalifa on the advisory panel of this report, it is no surprise to see Labour seeking to build on many of the measures suggested by Kalifa in 2021 to increase the UK’s international competitiveness. These range from using its AI Strategy to encourage use-cases of the tech in financial services, to supporting the Joint Regulatory Oversight Committee (JROC) in delivering the next phase of Open Banking, and ‘working with regulators and industry’ on a new roadmap for Open Finance.

New announcements on regulation and savings have the potential to spiral

Whilst it is true that many of the policies set out in the report have been previously trailed, there are several new announcements that may have significant implications for businesses across the sector.

The first of these to highlight are a series of possible regulatory reviews and reforms in the name of ‘improving efficiency and promoting innovation’. Labour confirmed it will review how the entire range of City regulators operate in conjunction with one another, identifying areas of overlap and gaps in oversight. This will be supported by a major FCA ‘streamlining’ consultation with industry to align with the Consumer Duty, and a new Regulatory Innovation Office that will monitor performance, introduce new progress metrics and promote transparency. Clearly, a sector-wide review of regulatory mandates has the potential to be extremely impactful: inputting into these consultations and monitoring how the new watchdog shapes the industry-regulator dynamic will be critical for both established players and smaller innovators alike.

Another area of focus for Labour in the review is on measures to ‘reinvigorate’ capital markets and pensions – both from a consumer outcomes perspective and to channel more private capital into growth sectors of the economy. To this end, Labour today committed to undertaking a major review of the savings landscape, consulting across the whole industry and consumer group representatives to not only consider how the public can increase returns and be better protected, but also to encourage greater investment into UK-based assets. This was supplemented by the announcement of measures modeled on the French ‘Tibi’ scheme for Defined Contribution (DC) funds, who can opt-in to invest a proportion of their assets into UK growth assets.

While the exact scope of the review still needs to be clarified, it’s clear that like the current government, Labour recognises the potential value of private capital in generating the revenue it will need to achieve its policy priorities – Reeves speaks frequently about the ‘1:3 public-private investment ratio’ that she will aim for should she become Chancellor. It is clear Labour are exploring all possible policy levers it can pull in order to help achieve this.

Focus on diversity connects FS to the wider Labour policy platform

Finally, it would be remiss to not highlight the focus Labour has placed upon encouraging diversity in the UK’s financial services sector as part of this review – not only in the workforce itself but also geographically. Alongside introducing new diversity and inclusion guidance for the PRA and FCA to hold firms to account on their hiring pledges; and codifying two additional KPIs for the British Business Bank to channel investment into women and ethnic minority-led start-ups; Labour has placed a heavy emphasis on growing regional financial centers outside of London and Edinburgh. This leans on implementing the recommendations of both the Harrington Review into foreign investment and Labour’s own ‘Start-up, Scale-up’ – applying the same regional lens to the Labour FS agenda that exists across nearly all other aspects of the current party policy platform.

With this in mind, firms that are able to demonstrate how their work helps alleviate regional economic imbalances – avoiding mentioning the dreaded ‘levelling up’ – will be at an advantage when engaging with the Labour Treasury team on any variety of policy issues.

Wrap-up

In sum, much of ‘Financing Growth’ was unsurprising by design – in keeping with the regulatory direction of travel in the sector and reflective of the many conversations Labour has had with those in the City over the last few years. However, there are several new policies contained in the report that, given their as-yet undefined scope and ambitious nature, have the potential to pose challenges for firms across the sector and significantly impact the public. Gaining more detail from Labour on these proposals, and shaping the policy development process where possible, will therefore be critical as we move closer to the next election.

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Political Update with Steve Richards – unpacking the year ahead

WA Senior Adviser, broadcaster and journalist, Steve Richards gave his views on an exciting year ahead in British politics in conversation with Laura Gabb, WA’s Deputy Managing Director. From Conservative turmoil to the upcoming general election campaign and Labour’s plans for power, a lot is going on.  

The conversation is the latest in a series of discussions with senior political and media figures hosted by WA. You can read key takeaways from the discussion below:  

Tories face the future with trepidation 

Tory MPs are pessimistic about their chances of retaining power, with some senior MPs fearing a 1997-style wipeout – or worse. This reflects fear of an opposition ‘pincer movement’, as Labour target northern ‘Red Wall’ seats, while the Liberal Democrats take leafy ‘Blue Wall’ seats in the south.  

Upcoming by-elections in Kingswood and Wellingborough risk further undermining Mr Sunak’s authority. The resignation of Chris Skidmore in Kingswood – and the possibility that he will endorse Labour – reflect ongoing issues retaining liberal Tories who support green policies. Meanwhile, losing a Brexit-voting seat like Wellingborough to Labour would be catnip to Suella Braverman and others on Sunak’s right.  

Against this backdrop, rivals are positioning themselves to succeed Sunak if the election is lost. Three likely candidates from the party’s right – Kemi Badenoch, Suella Braverman, and Priti Patel – will vie for a spot on the ballot, facing down the moderate One Nation Group. Kemi Badenoch is seeking to portray herself as the most sensible of these, but this may damage her among the powerful and hardline Tory membership.  

A key proxy battle in this shadow leadership contest is the ongoing debate around the Rwanda bill, with moderates like Robert Buckland seeking to water down hardline proposals from the right before the bill is voted on again later this month.  

The long campaign ahead  

Sunak fired the starting gun on a long election campaign at the beginning of January, as he appeared to rule out a spring election – making it all but certain that the poll will be held in the autumn.   

A November election seems most likely given that party conferences are held in early October, with the expectation being that the Prime Minister will use his conference speech to announce the dissolution of Parliament.  

The long run-up to the election will give the Tories something they urgently need – time. Jeremy Hunt, the Chancellor, will be hoping to use as many levers as possible to demonstrate that the Tories have a viable plan for the future. Not only is the Spring Budget expected to cut income tax, but there are whispers of a further fiscal event in June or July to continue a giveaway to voters. Economic competence is a crucial issue at any election, but it is even more salient given the cost-of-living crisis and ongoing global turmoil.  

A sure sign that the long campaign is already underway is the frequent appearances of Rishi Sunak and Keir Starmer setting out their stall to the country. While the rhetoric may grow more heated, it’s worth noting that both leaders are addressing a common theme: the need to secure sustained economic growth after fifteen years of stagnation.  

There are plenty of opportunities to exercise influence during these crucial few months as election manifestos are finalised and the Government aims to tie up loose ends in parliamentary business. But in doing so, it’s worth crafting approaches so that they address the wider electoral interests of each party.  

Labour prepares for power  

Reflecting the likely scenario that Keir Starmer wins the election, Labour’s election supremo Morgan McSweeney had aimed to have an embryonic manifesto in place before February. Work is still underway on the document and there is plenty of time to influence its contents before its release early in the general election campaign, but core themes have become clear.  

Since 2019, Labour has notably adopted a conciliatory stance on divisive culture war issues – such as immigration, Brexit, and gender – to neutralise Government lines of attack. While Sunak may try to provoke a response on these, Starmer’s office has maintained a strong focus on the bread-and-butter issues of the economy and public services.  

At the centre of Team Starmer’s vision for Britain is the idea of ‘mission-driven government’, with policy focused on five goals relating to economic growth, decarbonisation, the NHS, education, and crime. Any attempts to influence Labour before and after the election will need to appeal to one or more of these, with economic growth being paramount to Labour’s long-term vision for supporting the public sector.  

Starmer and his shadow chancellor, Rachel Reeves, are at pains to stress that Labour will not go on a spending binge in government to avoid unnecessarily having to raise taxes or increase borrowing. Capitalising on this, the Tories have made cutting taxes a core part of their appeal to voters. In response, Labour will have to either reverse these cuts or implement dramatic spending cuts to make the sums add up. For this reason, we are likely to see an emergency budget within a month of Labour winning an election, as Reeves decides her fiscal priorities. As ever, these events and their ability to unlock vital funding and incentives are a key target for any organisation trying to influence policy. 

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Addressing England’s cardiovascular disease emergency – learnings from the new ICS five-year plans

England’s Integrated Care Systems (ICSs) have published their five-year joint forward plans, setting out Integrated Care Boards (ICB)-led priorities to tackle physical and mental health challenges being faced in their populations. We are summarising the key priorities of ICS’s in a series of articles, based on data revealed in our interactive map. This map is free to use, supporting better engagement and collaboration with all stakeholders in the healthcare community – industry, patient organisations, and the NHS.

Here, we focus on ICS five-year plans tackling cardiovascular disease (CVD).

Cardiovascular disease continues to be a top priority

Cardiovascular disease (CVD) is the top priority in almost two-thirds of ICS plans, second only to cancer, and every ICS has identified it as one of their top priority clinical areas. And rightly so. CVD affects around 7.6 million people in the UK and is a significant cause of disability and death. Since the beginning of the COVID-19 pandemic, CVD-related excess deaths have spiralled and although we are seeing signs of recovery year on year – the number of deaths involving CVD has remained higher than expected.

So, what are the key approaches being taken to tackle CVD across the nation for the next 5 years? Prevention, targeting inequalities, moving care into the community, identifying risk, and using digital technologies.

Prevention. Every ICS emphasised the importance of CVD prevention. Most plans pledge to tackle modifiable risk factors such as smoking, alcohol, and inactivity. Case example: The Humber and Yorkshire ICB CVD Prevention and Detection Plan 2022-24 covers primary, secondary, and tertiary prevention tactics for CVD, in addition to proposed methods for risk stratification and early identification.

Targeting inequalities. People living in England’s most deprived areas are almost four times more likely to die prematurely of CVD than those in the least deprived areas. So it’s reassuring to see Core20PLUS5 features in every plan and that many ICS plans are tailoring community interventions to help those most deprived. Case example: Dudley is launching a mobile Healthy Hearts Hub to empower residents to manage their own CVD health and will be moving throughout the area to reach the most deprived communities.

Community services. Many ICSs propose to increase care in the community for people with CVD, reducing demand on hospitals and reaching more patients. Some plan to achieve this through Community Pharmacies and Neighbourhood teams, others through digital engagement. Case example: Black Country is expanding community pharmacy blood pressure services and further embedding personalised care at that level through Health and Wellbeing Coaches as part of the Healthy Hearts Project.

Identifying risk. Optimal management of cross-cutting risk factors like high blood pressure and high lipids, to prevent CVD, or diagnose and treat people earlier. In many ICBs, cardiac pathway reforms are being proposed to enable this shift. Case example: Suffolk and Northeast Essex is encouraging the use of Accelerated Access Collaborative pathways to simplify lipid management and encourage adherence to national guidance for optimal management of patients at high risk of CVD.

Digital technologies. Many plans emphasise the monitoring, treatment, and detection of patients with CVD-related conditions, tying into the imperative around community care. This is tied to a much broader drive to scale tech innovation in the NHS whereby each ICB has laid out an extensive digital strategy. Case example: Mid and South Essex is continuing with the successful national pilot BP@home, where residents are self-monitoring blood pressure; they are also rolling out mobile heart monitors allowing people to detect, monitor and manage heart arrhythmias.

What does this mean for industry?

We hope you found this useful – if you would like to discuss in more detail, please get in touch.

Further reading:

Five key takeaways: Engaging with ICS priorities panel session https://wacomms.co.uk/five-key-takeaways-engaging-with-ics-priorities-panel-session/

Engaging with Integrated Care Systems priorities https://wacomms.co.uk/engaging-with-integrated-care-systems-priorities/

What the new integrated care model means for specialised services https://wacomms.co.uk/what-the-new-integrated-care-model-means-for-specialised-services/

 

About WA Communications

WA Communications is an integrated strategic communications and public affairs consultancy. Our specialist health practice supports clients across a diverse range of diseases at the intersection of policy, government affairs and communications, to achieve their strategic objectives.

If you would like to discuss how to best work in partnership with Integrated Care Systems, and our analysis of their key areas of focus, contact Lloyd Tingley at  lloydtingley@wacomms.co.uk.

 

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Tax, tax, tax: Hunt’s Autumn Statement was a tax give-away aimed at driving growth

Yesterday’s Autumn Statement marked the penultimate fiscal event ahead of the next General Election; a clear opportunity for Chancellor Jeremy Hunt to tell the House, and indeed the country, that the economy has “turned a corner” in order to turn the tide on the government’s ballot box prospects.

His approach and announcements were clearly aimed at shoring up support across party factions and appealing to the broadest spread of voters, whilst maintaining the traditional focus on balancing the books.

However, with the Conservative Party still behind in the polls and a tough battle ahead to win the hearts and minds of the electorate, the question remains whether Hunt has gone far enough to impact change in a Statement which has been heralded as “sensible, but underwhelming”.

Here are WA’s five key takeaways from yesterday’s speech:

Balancing the party politics

Hunt’s 110 fiscal measures and focus on the Conservative Party’s success in halving inflation were met with cheers from the backbenchers. The politics of the speech were as much about internal party management as they were about external ratings and Hunt notably applauded the effective representations made by backbench MPs in marginal seats such as Bolsover, Wrexham, Clwyd South, and Keighley. It will become clearer over the coming weeks if this has been enough to unite the party’s right with the mainstream, or if more needs to be done in the months to come to create a unified front for the election.

Tax, tax, tax

Hunt’s heavily pre-briefed “rabbit out of the hat” moment was a headline announcement of a 2% reduction in National Insurance contributions, one of many changes rumoured for inclusion in the run-up. It forms part of a series of tax cuts and “cost of living” measures which are clearly aimed at bolstering household and business finances – including an increase to the National Living Wage to £11.44 per hour in April, a freeze for the small business multiplier, an extension of the Retail, Hospitality and Leisure (RHL) relief, and most notably the permanent introduction of the super deduction for large businesses that was first announced in 2021.

Speculation is already mounting that further tax announcements will follow in a pre-election ‘give-away’ in the Spring Budget, and Hunt was clear that the government’s plan will have an immediate real-term impact, but the job is not complete.

Growth and investment at the centre of Hunt’s plan

Hunt’s statement set a clear direction for the immediate future of the UK’s infrastructure, R&D and life sciences sectors. To drive forward innovation and boost productivity, the government is making changes to simplify and improve R&D tax reliefs, and £4.5bn has been allocated to unlock investment in strategic manufacturing sectors including automotive, aerospace, life sciences and clean energy, changes welcomed across sectors.

Planning reforms to speed up approval processes for electricity networks also made the cut, reflecting Hunt’s previous focus on improving connectivity to the grid. However, with investor confidence shaken by recent announcements of a more “practical and pragmatic” approach to the net zero transition, these measures will need to go some way in giving the private sector the visibility it needs to release investment.

Public sector finances: a trap for Labour?

Notably, there were no big announcements on the departmental funding settlements or stipends for local government. So, whilst measures on wages and national insurance will nominally increase public sector worker incomes, there is a question mark over the future spending available to the public sector.

Politics were at play here too, with Hunt boasting that his party hadn’t buckled to the full demands of unions and spoke of boosting productivity through efficiency reforms via the first ever NHS Long Term Workforce Plan. For Labour, who have also vowed to balance the books on public spending but have close longstanding ties to the country’s unions, this presents an immediate challenge to address in Reeves’ first Budget should they win at the next election.

Regardless, a comprehensive spending review will be needed in Autumn 2024 regardless of general election timings, so Hunt may have just pushed the problem further down the line.

Labour’s response: too little, too late

Fiscal statements are said to be fun for the Opposition, but only when the party opposite is delivering bad news. Today’s statement, which included an array of eye-catching pre-election commitments, intended to create dividing lines with Labour, meant that Shadow Chancellor Rachel Reeves was left with limited room for manoeuvre.

Choosing an economic route, Reeves focused heavily on the “fiscal drag” effect driven by frozen tax thresholds and questioned the real long-term impact of Hunt’s announcements. She also argued that households will hardly feel the benefit of National Insurance cuts, in light of recent council tax increases which have left millions out of pocket. The overarching message: too little, too late to win over voters.

She too is looking ahead to the next election, reassuring Labour MPs that voters will be asking themselves as they reach the ballot box “what has the government done for my family and I in 13 years and are we better off?”. Reeves and her team are already in planning mode for a Labour move to No.11, one where quick fix fiscal changes will be needed to demonstrate immediate impact for households and businesses.

The government will be hoping that today’s package of announcements is enough to also beg the question “what could the government do for me in another five years’ time?” Voting intention polls will give an early indication of this, but time is narrowing for the Conservatives, who now only have one major event left in the form of the Spring Budget before they face the electorate.

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Autumn Statement – five takeaways

Fiscal events are always highly political, and you may be forgiven for thinking we are entering a General Election year – with measures to freeze all alcohol duty until 1st August 2024, a cut in employee National Insurance by 2%, and the government reconfirming its commitment to the triple lock resulting in a rise in the state pension by 8.5% in April 2024.

There will be lots in today’s speech that is welcomed by business – only 110 measures to work through – especially measures ranging from investment in skills and advanced manufacturing, making ‘full expensing’ tax investment relief permanent, and speeding up local authority approvals for infrastructure projects and business planning applications.

For financial and professional services, I have five key takeaways: 

  1. Investment: Both the Government and Opposition continue to vie for the ascendency in who can unlock and promote investment into UK infrastructure and fast-growing science technology businesses. On the back of Labour launching its National Infrastructure Council, as trailed, the Chancellor announced measures to take forward the Mansion House Reforms by committing £250 million to two successful bidders in the Long-term Investment for Technology and Science (LIFTS) initiative, and the intention for the British Business Bank to establish a new Growth Fund. The government will also legislate to implement long awaited Solvency II reforms, and published Lord Harrington’s Review of Foreign Direct Investment, accepting all recommendations. Both political parties see investment as central to their political visions for UK growth. It will continue to be a key political background between the two main political parties.
  1. Pensions: Pensions reform continues at a pace, and has the potential to be transformational. Again linked to investment, the government guidance for the Local Government Pension Scheme (LGPS) in England and Wales will be revised to implement a 10% allocation for investments in private equity, and it will consult on how the Pension Protection Fund (PPF) can act as a consolidator to increase opportunities for defined benefit schemes to invest in productive finance. On the retail side, the government’s consultation on a ‘lifetime provider model’ to solve the long-standing problem of small pots, although potentially causing a massive headache for employers, is likely to lead to better outcomes for pension savings. It will also lead to welcome innovation in the sector!
  1. The Future of Payments: On the back of the review, also published today, the government will develop a National Payments Vision and Strategy – published next year – to simplify the landscape and bring together strands of concurrent work currently being run out of the Payments Systems Regulator (PSR) and the Financial Conduct Authority (FCA). With regulatory oversight of payments a key topic of discussion at party conferences this year, this is clearly an opportunity to shape the future framework. It is also a recognition that the current dispersion of oversight doesn’t lend itself to a level playing field between established players and market entrants.
  1. Economic Regulation: The government continues its focus on ensuring regulators take into consideration growth and innovation. Following the secondary objectives for competitiveness and growth placed on the Prudential Regulation Authority (PRA) and the FCA through the Financial Services Markets Act, the government will consult on measures to strengthen regulators’ ‘Growth Duty’. In addition to bringing the three economic regulators (Ofgem, Ofwat and Ofcom) into the scope of the Growth Duty, the government is also carrying out a broader refresh of the statutory guidance, encouraging all regulators to input. And in the fintech sector HM Treasury has the ambition to ‘reduce their [regulatory] requirements on the industry’ by 10% in 2024.
  1. Statutory Instruments: With the Financial Services and Markets Act in place and no significant primary financial services legislation announced in the King’s Speech, the government continues to use secondary legislation, as the vehicle to enact further reforms across the sector. The Autumn Statement supplementary information confirmed that reforms to Solvency II, EU Packaged Retail, and Insurance-based Investment Products (PRIIPs) Regulation, and short selling regulation will be made through statutory instruments.

So, lots to be getting on with across an already packed agenda for financial and professional services.

And one political observation, pointed out to me by a colleague at WA Communications, while we waded through the avalanche of announcements and consultations following the Chancellor’s speech:

The fact that the cut in Employee National Insurance from 12% to 10% that impacts 27 million people is being introduced through emergency legislation from the 6th January 2024, rather than at the start of the tax year on 6th April points towards a May General Election. Maybe it doesn’t, but I will throw it into the mix for debate!

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New faces in the Treasury: What Sunak’s shake up of the top team means for the City?

Monday’s whirlwind reshuffle, prompted by Braverman’s removal from Government, has seen both new and old faces enter the Ministerial team. Driven by a need to refresh Sunak’s credentials as a moderate Conservative, this latest round of appointments is marked by the promotion of younger, centrist political figures that have long been tipped for high office.

Sunak’s new Government is a clear signal of his desire to promote a more moderate, professional tone that reassures voters in the Lib Dem facing Blue Wall and appeals to the “anti-Corybn” vote GCHQ have been pursuing. It is also a clear charm offensive, with this new suite of fresh-faced Ministers likely to become active spokespeople for the Party in the run up to the General Election as the Conservatives look to broaden their appeal. An appeal he no doubt hopes to double by bringing former moderate Tory Prime Minister David Cameron back into the fold.

Beyond the broad political direction, this move indicates departments across Whitehall saw sweeping changes amongst their Ministerial teams. HM Treasury is no exemption. Whilst Chancellor Jeremy Hunt remains in post, a number of long-standing Treasury Ministers have been reshuffled out of the Treasury only to be replaced by “rising star” candidates close to Sunak. Whilst Gareth Davies MP remains in his post as Exchequer Secretary to the Treasury, Victoria Atkins, Andrew Griffiths and John Glen are all moving on from No.11.

So what will these new Ministers bring to the table?

Deep industry expertise!

Notably for the City is the appointment of a familiar face – Bim Afolami MP – to his first Ministerial role as Economic Secretary to the Treasury. With real life experience in financial services before becoming an MP and as the long-serving Chair of the Financial Services and Markets APPG, Afolami is no stranger to the inner workings of the City. It was a clear choice for a Prime Minister trying to combat the charm offensive spearheaded by Shadow Chancellor Rachel Reeves.

As frontman of the 2018 Blue Book and champion of “common sense”, he has been vocal on the need for proportionate and sensibly paced regulation, and his open-door policy to City representatives means he’ll hit the ground running in government. With his appointment, we can expect to see a firmer stance on accountability for the regulators, a priority he’s championed from the back benches through the Regulatory Reform Group.

A trusted pair of hands

Laura Trott MP’s promotion from Pensions Minister to Chief Secretary to the Treasury also marks a shoring up of the Treasury ranks with a trusted pair of hands close to Hunt, and with strong ties to new Foreign Secretary David Cameron. Having also been an adviser to Lord Maude during his review into the inner workings of Government, she brings a deep understanding of the machinery of government at a critical time for the Conservative Party ahead of the general election.

Trott will now inherit one of the thorniest of briefs in HM Treasury. From large scale regulatory reform to sizeable infrastructure projects to the unenviable challenge of redirecting HS2 funds, she is set for a high-profile year. Her previous stint on pensions policy could smooth the path for Hunt’s Mansion House reforms, a hallmark policy he wants to see cross over the finish line before voters go to the polls.

A seasoned moderate Minister

Also joining the HM Treasury top team is seasoned Minister Nigel Huddleston MP, who has held four Ministerial briefs since joining the Government front bench in 2020. Having most recently held the International Trade brief and with a pre-election background in business, Huddleston will likely approach his new brief with business sense pragmatism and an eye for detail, as he has been known to do in his previous appointments.

Today’s inflation rate drop comes at a good time for the new Treasury team and will no doubt be welcomed as a positive start for the new cohort. But be in no doubt, the Government needs to demonstrate green shoots of activity in the economy in order to achieve electoral success.

The new faces of Jeremy Hunt’s Treasury team will need to deliver on a suite of regulatory and policy reforms already underway, as well as breathe new life into the economy, in order to deliver for Conservative voters ahead of polling day and sway those that are undecided.

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Government pushes on with plan for cryptoassets regulation – but questions remain for business

The Government’s response this week to the consultation on the future regulatory regime for cryptoassets represents a significant, positive step forward – matching other markets around the world – in establishing a regulatory framework to allow crypto and blockchain to flourish as a driver of growth in the UK fintech sector.

The document released this week set out the Treasury’s plan to implement, following industry feedback, many of the proposals for the future regulatory framework of the sector outlined in April this year. The areas covered by the consultation range from fundamentals like the definition of cryptoassets and the broad legislative approach; to plans to regulate core activities such as custody and lending; and to bring centralised cryptoasset exchanges into the financial services regulatory perimeter for the first time.

What the Government is aiming to do with the proposed framework is manage clear tensions in designing policy that improves consumer outcomes; encourages investment and international competitiveness, all the while protecting against market failure – driven by high profile examples like the collapse of FTX. This is a tricky balance to strike. Heading into an election year, the plan outlined this week still has a number of unresolved questions that will need to be worked through with industry and addressed before implementation.

Lack of clarity on timescales

The Treasury was keen to make clear the consensus that exists across the industry for the plan presented earlier this year – highlighting that nearly 80% of respondents were in ‘broad agreement’ – indeed, many of the proposals set out in the original framework earlier this year were taken forward without any modification. This has seen a number of the issues that were raised by critics unaddressed – for example how crypto gambling will be dealt with under the new regime.

In addition, the document was relatively light on detail in terms of when the critical ‘phase 2’ secondary legislation, that will give the Financial Conduct Authority (FCA) its new powers to regulate the sector, can be expected, nor on the exact mechanisms for how this will be added to the statute. It was confirmed that legislation would be “laid in 2024” subject to Parliamentary time. This timescale, while offering a general idea of when we can expect forward movement, becomes murkier when you consider the political uncertainty (and crucially, the loss of Parliamentary time) that will occur due to the general election expected next year. Given the state of the polls, it certainly makes Labour’s position on the future regulatory framework equally as important as that of the current Government.

Where Labour stand

Speaking of the Opposition: shadow Treasury ministers were keen to stress to businesses at Party Conference last month that they would not be ripping things up and starting afresh with the Treasury’s current proposals for crypto and the wider fintech sector. Some concerns were raised by shadow ministers as to whether proposals go far enough on consumer protections regarding the promotion of cryptoassets – reflecting Labour’s focus on this issue across many policy areas.

As it stands then, the consensus is that the direction of travel on crypto will remain broadly the same. However, should an incoming Labour government, with this added focus on protecting consumers, inherit a half-finished regulatory regime in late 2024, there remains the risk that the checks and balances on firms contained within the proposals could be made more stringent.

Any additional measures placed upon the FCA in the name of consumer protection (on top of the already greatly expanded powers handed to the regulator as part of this plan) would run the risk of overburdening an already-stretched regulator and adversely impact all firms in the space – not just those who are subject to the specific consumer-facing measures that Labour may seek to introduce. This is a risk firms should consider highlighting to the Labour Treasury team as they consult with business on the future of fintech.

Further friction between innovators and traditional players to be expected

From a wider industry perspective, there remains questions around how new and innovative financial products would be prioritised and onboarded into the proposed framework as they emerge. The lack of detail here is critical in terms of how it relates to recent issues such as de-banking of assets, with its highly charged political debate and subsequent scrutiny from the FCA. De-banking is an example of an issue that is known to disproportionately affect cryptoasset businesses – both those in the DeFi space and beyond. Other markets around the world – including the US and the EU with their Markets in Crypto-Assets (MiCA) framework – are making changes that seek to resolve this issue, encouraging growth and cross-sector collaboration. The Treasury’s plan set out this week does not yet address this issue – leaving the door open for suggestions from business to prevent the UK from falling behind its international competitors.

Conclusion

Therefore, while its clear that the measures outlined in the Government response this week are, overall, the right approach, the timeline put forward for when this will become a reality remains somewhat unclear, especially given the uncertain year we are anticipating from a political perspective, and factoring in positive progress in other markets around the world. For fintechs and the wider sector, there is still a significant amount of work to be done in making the case to both the current Government and Labour in advance of the next election for a swiftly implemented and proportionate future regulatory framework.

 

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In Conversation with Oliver Gill, The Sunday Times – Five key takeaways

WA Communications was delighted to host Oliver Gill, recently appointed as Industry and Leisure Business Editor at The Sunday Times, for an in-conversation lunch with some of our clients and contacts. Oliver discussed the big stories shaping his brief, which covers the manufacturing, transport, travel, hospitality, and utilities sectors. He also shared some honest advice on how best to engage with Fleet Street’s finest. 

Here we share five key points raised during the session, including ways in which communications professionals can fine-tune their storytelling to connect with a range of audiences. 

1. Journalists are responding quickly to the changing political winds. 

The political landscape is and will continue to be a key influence on the kinds of stories journalists are looking for and how they report on issues across sectors ahead of the general election. 

Journalists are becoming increasingly aware of how readers and businesses perceive the effectiveness of the government and opposition and will continue to report accordingly. We can expect papers to declare their party allegiances much closer to the election, but the rule of holding power to account always prevails.  

2. Journalist’s preference is always to see something physical. 

With hundreds of emails hitting their inboxes on a daily basis, having physical evidence to present to journalists will help to elevate your pitch. Stories can take time to develop, particularly feature pieces, so being able to show them a tangible asset will help to sustain their interest. While this requires careful planning and coordination, it may be the factor that takes your story from pitch to press and will often form the basis of the opening lines. 

3. Readers are becoming more switched on to sustainability. 

The stories that appeal most to readers are those that resonate with them personally. When it comes to net zero and sustainability, the stories that cut through are the ones that have a direct impact on people’s daily lives. That doesn’t mean it’s impossible for businesses to get traction with their ESG strategies, but for media success, it pays to look for those real-world solutions that people can touch and feel. 

4. Engage with media yourself, rather than letting others take your space. 

When a business finds itself in the media spotlight, it is far better to engage than let others fill the narrative with negative comment. Organisations that are under fire are unlikely to be able to avoid coverage, but they can certainly influence the shape of the story if they do engage with journalists. A hostile response to a journalist inquiry is unlikely to pay off, as it implies you have something to hide – and the journalist may well keep digging until they uncover that uncomfortable truth. 

Offering compelling evidence that counters the journalist’s view will help you to regain control of the narrative or move the story on. 

5. A journalist’s favourite story will always be one they believe their readers are going to tell their friends at the pub. 

The most compelling stories are those you would tell your friends when you walk into a bar. That’s how journalists are trained. Comms professionals could do well to borrow from that rule of thumb.  These stories offer something new or a fresh perspective. Something that makes a journalist think “I hadn’t thought of that” is likely to have the same effect on their readership. 

 

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Navigating party priorities: health policy in the political landscape

With Party Conference Season now behind us, we have (some) more clarity on the health priorities of the two major political parties. Now that both the Labour and Conservatives have established their positions, what does this mean for organisations seeking to engage on the commitments made by both sides, as competing priorities divide attention?

In this analysis we show how healthcare organisations can amplify their policy objectives with Government and the Opposition through shared ambitions, as Westminster gears up for a general election.

Prevention is the name of the game

Your policy positions need to align to the prevention agenda.

While political championing of prevention is not new, one of the clear shifts for both parties this year was the central focus on public health and prevention.

For the Conservative Party this is a significant change in direction, fronted by the smoking ban announcement made by Rishi Sunak on the final day of conference; arguably, what could be one of the most significant public health interventions of recent decades. This is perhaps not surprising, given it is unlikely that the Government will have met many of its 2019 health manifesto commitments by the general election and hence a desire to show real change.

For Labour, Wes Streeting’s ‘shift from treatment to prevention’ was reiterated throughout conference. Unlike the Conservatives’ approach of bold policy to demonstrate change, Labour’s position is focused on long-term planning. However, despite talk of 10-year strategies and the shift towards community-centric care, many were left questioning the practicalities of implementation including the rebalancing of investments and community staffing.

Crafting effective policy asks

Your policy asks must focus on levers that can enact change and drive impact.

While ambitious reforms may capture attention, policy teams in Government and the Opposition are facing competing priorities with limited resources.

Wes Streeting has reiterated this distinction, favouring detail and evidence over ‘pledge card policies’. This is especially important to bear in mind when engaging with Labour. Also, while Streeting may have presented his overarching goals in Labour’s Health Mission, his shadow ministers are still getting to grips with the intricate details of their briefs.

It is nuanced and well-articulated policies that will hold weight for Labour and the Conservatives in the run-up to the general election. This means an opportunity to engage constructively by offering expertise, insights, and data that can inform policy decisions. Organisations should invest in refining their precise policy asks that address the current real-world challenges, and where possible, costed roadmaps for implementation.

In it for the long haul

Focus on policy proposals that can unlock cash or productivity

What is abundantly clear is that both parties are positioning their priorities as long-term commitments and ambitions.

For both, this is in part necessity – with reluctance to commit to any new policy proposals for fear they could be held up as uncosted. The other part is about positioning, with parties wanting to be seen as the safe bet for the future. This pivot will arguably be harder to pull off for the Conservatives who have been at the helm for more than a decade. For Labour, it may suggest short term inertia if elected, with fiscal restraint likely to remain front and centre in the first 12-18 months.

For organisations looking to engage with the health policy agenda is greater scrutiny on the financial implications of policy proposals. Political and policy prioritisation is likely to be focused on interventions that can either unlock cash or create an immediate and measurable impact on productivity to unlock capacity in other parts of the system. Engagement should focus on being explicit about where these savings can be made.

About WA Communications

WA Communications is an integrated strategic communications and public affairs consultancy. Our specialist health practice supports clients across a diverse range of diseases at the intersection of policy, government affairs and communications, to achieve their strategic objectives.

If you would like to discuss how we can help your key areas of focus, contact Giulia Corsi at giuliacorsi@wacomms.co.uk.

Our analysis of the Labour Party’s health policy thinking draws Next Left – WA’s recently published Guide to Engaging with the Labour Party – which explores the people, processes and politics shaping the development of Labour’s next election manifesto, and how businesses in every sector can engage with the party’s plans.

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Labour Party Conference: Five key takeaways

As Labour concludes its annual party conference in Liverpool, Tom Frackowiak Partner and Head of the WA Financial & Professional Services practice outlines his five takeaways for business:

Five takeaways from Labour conference in Liverpool:

1. Conference momentum: Labour will be ecstatic with how the conference in Liverpool went! A record number of attendees, speeches from the Leader and Shadow Chancellor that landed a narrative focused on “national renewal” and rebuilding Britian, packed fringe events and receptions. The business community also turned up en masse to listen and engage with Labour’s vision for the UK economy. As one Shadow Minster said to me slightly tongue in cheek, “we are now the party of business”; having been in Liverpool it is hard to argue with that assertion.

2. Labour engagement will be difficult: Businesses in Liverpool were highly complementary of the efforts made by the Labour team to engage with their sectors, but many still struggle to secure individual meetings with Shadow Minsters and their advisers to have more detailed discussions on policy direction. Again, looking at the number of businesses in attendance in Liverpool this is unsurprising. Clear thought and consideration need to be given to how you achieve cut through! How is your business essential to Labour’s programme for Government?

3. So, listen to the words from conference: To get cut through, business need to show how they will help a Labour Government “build”, “invest”, “innovate” and deliver a “new direction for skills”. With aspirations to be a “Mission Government” how does your businesses corporate agenda align with Labour’s five national missions? Can this be framed in the short, medium, and long-term?

4. Still a lot of policy detail missing: While Labour has set out an overarching vision for Government there is still a lot of detail that businesses to hear for planning and investment decisions. Currently Labour’s ‘national wealth fund’ is doing a lot of heavy lifting for its economic vision for the UK economy. In sectors like financial and professional services – which only has four paragraphs in the final 112-page National Policy Forum paper – there is an eagerness and anticipation to know more.

5. Labour haven’t won the General Election: While clearly momentum is with Labour and national polling gives the Party a consistent double-digit lead over the Conservatives, there may still be over a year to go until a General Election. While there is a clamor from business to get to know Labour the General Election results of 2015 and 2019, plus EU Referendum should be a warning that election results can often ‘surprise’. Any strategic approach to advocacy and engagement should adopt a holistic or multi-stakeholder approach.

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From crisis to opportunity – the Education inheritance for a Labour government

As the Labour Party gathers in Liverpool next week, flush from a big by-election win and sitting on a healthy 20-point lead in the polls, attention will turn to what Labour will say about how it is going to govern. 

For any incoming government, a major priority area will always be the education system. Education and Skills is central to Keir Starmer’s five missions and is one of the most prominent parts of the National Policy Forum report that will set the framework for the Labour manifesto. 

The reality is though, that from early years through to university and beyond, the sector is facing systemic challenges. Whether it is the difficulties in the recruitment and retention of teachers; the failings of the apprenticeship system; the rising funding pressure pushing some universities to the brink of failure; the spike in pupil referrals; or school buildings crumbling. There are crises to be dealt with everywhere.  

To discuss the legacy that Labour will be left with and what they can do to ensure that the education system is fit for purpose, I was delighted to welcome senior representatives from an array of organisations across the education sector to a roundtable discussion on what an incoming Labour government could do to break down the barriers of opportunity. 

While the demands and challenges from each part of the sector are considerable, some of the key things to watch out for that came from that informative discussion are as follows: 

The last time a Labour government was elected, its central mantra was ‘Education, Education, Education’, and the Blair and Brown years saw the Labour government take bold decisions and heavily invest in education at all levels, trying to make good on this mantra.  

Starmer’s Labour will not be in as fortunate a position this time and will need to make choices on where they can spend limited money and think creatively about how to use the resources they do have in a different way. 

For those organisations businesses and institutions looking to ensure that their particular part of the sector gets the attention and resource it needs, then you need to be able to make a strong coherent case, showing how you can make effective uses of resources and deliver opportunities for all.  

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Sunak shatters consensus on HS2 and opens new questions on UK transport policy

In the last 14 years we’ve had four General Elections, six Prime Ministers and nine Transport Secretaries. We’ve also had consensus among the leaders of the big political parties that HS2 is a good thing and needs to happen. Yes, it has been trimmed along the way, and phases have been delayed, but the idea has survived – and Ministers have been proud to talk about the benefits.

Yesterday all that changed when Rishi Sunak announced he was cancelling the rest of HS2 – everything except Phase 1 from Euston to just north of Birmingham. What’s more he didn’t just cancel it – the way he spoke about it was deliberately critical. HS2 is not just the ‘wrong project’ but the ‘ultimate example of the old consensus’. It’s difficult to imagine any Minister in this Government talking positively about HS2 again.

Here are a few reflections on what this announcement means.

First, the risk premium for new infrastructure in the UK. This is a public sector project but one that has been highly visible around the world. The inward investment strategies of some of our largest cities outside London have been based on it. A whole structure of advice and planning – the National Infrastructure Commission – started at the same time as HS2. Whatever the merits of the decision, investors will see it as another reason to be wary of government. They may think (unfairly) the UK just can’t do infrastructure well. Both major parties could usefully think about how to reassure them.

Second, it’s not just a consensus about HS2 that has gone: transport policy is now more unstable than at any time in the last 15 years. Expect to hear more from the Conservatives about car drivers and private individuals, less about active travel and modal shift; more about towns and suburbs, less about our biggest cities. There’s an obvious political dimension to this but the Prime Minister no doubt believes in it too. It’s also possible to discern another force at work: the Treasury, one institution that consistently opposed HS2. George Osborne overruled his officials when he was Chancellor, but it’s not difficult to imagine their advice to Rishi Sunak – the enormous risks of mega-projects, their poor returns compared to smaller schemes, especially roads.

Third, the Government has now created a huge range of hard questions by its commitment to Network North. Transport infrastructure is complex: it takes years to plan, get consents, design and build successfully. The plan includes everything from extending existing schemes (£2 bus fare) to new projects that sound just as challenging as HS2 (£12 billion for Liverpool-Manchester, over £2 billion for Bradford-Manchester). But the money that has been saved on HS2 would, mostly, not have been spent for years: when will these new projects happen, who will lead them, how will they be funded? Expect DfT to be busy for years answering these questions – and note caveats in the official document about costs, business cases, benefits and funding profile.

Finally, whatever happens to these plans, the transport sector needs to think long and hard about the story it wants to tell, and how to respond to this challenge. Even if Sunak’s term as PM is short, the story he is telling about transport is not going to go away – nor is that old consensus going to re-emerge.

 

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Railing against the consensus – Conservative Party Conference and Transport

After weeks of speculation, Prime Minister Rishi Sunak has used his keynote speech at Conservative Party Conference to wield the axe against HS2’s Birmingham to Manchester leg.

The announcement is the latest shift from the Prime Minister that impacts the transport sector and reiterates the prominence of transport issues as we head towards an election in 2024.

What happened at Conservative Party Conference?

HS2 cast a shadow across the Conference. Whilst rail featured heavily on the fringe – covering topics from rail reform, contracting, rolling stock and decarbonisation – the debate over HS2 predictably dominated discussion.

Leaks meant that industry, Ministers, backbenchers, and regional stakeholders all sought to make their case ahead of the announcement, with West Midlands Metro Mayor Andy Street unsuccessfully trying to fight a rearguard action. Many on the fringe and across the sector will be frustrated by how No10 has handled the comms for this announcement, especially considering reports first emerged weeks ago.

Sunak’s alternative to HS2 is the reinvestment of £36 billion into the new “Network North” plan. Spending will be spread across new road, rail and bus projects aimed to improve interconnectivity across the North and beyond. However, there is little to cheer for the rail sector with DfT subsequently confirming that only about 30 percent of the funding will go to rail, with the remainder for local transport and roads, and no new capacity for north-south rail passengers.

Whilst rail dominated Sunak’s remarks, Transport Secretary Mark Harper reiterated the government’s focus on motorists.

His ‘Plan for Drivers’ brings together 30 measures aimed at improving car journeys at expense of bus lanes, low traffic neighbourhoods and travelable 15-minute communities. It is the latest example of how the Conservatives want to project a ‘pro-car’ image, and position Labour as ‘anti-motorist’.

Other modes of transport – plane, maritime, active travel and more – were largely absent from the focus of senior politicians in Manchester.

The reaction to Conference

Sunak is realistic his announcements will not be welcomed by industry or many politically and predictably the immediate reaction has been largely negative. This was borne out by the criticism from prominent Conservative and Labour Party figures who have been quick to raise concerns and reflect doubt about the Network North alternative.

On social media, for every positive post there are three negative.

Stakeholder reaction

The Prime Minister’s gamble – like with the delay on petrol and diesel cars – is that it reignites support for the Conservatives among the voting public that he needs to win over in more rural and suburban parts of the country.  He will be cheered to see positive support from several Conservative MPs in critical swing seats in the North.

What to look out for from Labour Conference

Yesterday’s announcement is the latest attempt in transport policy from Sunak to create a wedge issue between the parties. Labour must decide if it will support the government’s plans or risk supporting a project widely recognised as poorly run at the expense of many alternative projects that the electorate may prefer.

Like with continued support for the 2030 ICE ban in favour of EVs, Labour is caught between a rock and a hard place. Labour will need to use the Conference to set out its plans and give industry more confidence about what the future could look like, without falling into the Conservative bear trap.

For business, the transport battleground will require careful navigation. To be heard, sectors will need to recognise the competing priorities of both parties and how their case can align with them without becoming the focal point of a new debate. This calls for a balancing act of discreet engagement married with public communication that builds support with both.

To discuss how to achieve this balance, please get in contact with me on jamiecapp@wacomms.co.uk.

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Five key takeaways: Engaging with ICS priorities panel session

WA was delighted to host a panel session with Dr Layla McCay, Director of Policy and NHS Confederation and Mike Bell, Chair of NHS South West London integrated care board (ICB) and WA Health Senior Adviser.  

At the session, WA’s Head of Health, Dean Sowman, explored Layla and Mike’s perspectives on how the life sciences industry can meaningfully engage with, and play a role in delivering integrated care systems (ICS) priorities. 

In light of a 30% cut to operating budgets and industrial action absorbing the bandwidth of executive teams, ICSs are currently heavily focused on short-term operational priorities. We have outlined five key factors to engage effectively against this backdrop:   

1. ICSs are delaying some action until the general election 

Whilst both the Labour and Conservative parties have communicated support and optimism for ICSs, the reality is that political uncertainty and operational pressures mean that many ICBs have little bandwidth to implement their ICB led five-year joint forward plan.  

Instead, ICSs are increasingly deferring important decisions until there is a stable administration which can ensure the preservation of essential funding and objectives. The overarching concern is that the exact vision of ICS working to respond to local population needs will be overshadowed by national pressures.    

Whilst this is a considerable challenge, the take home message for organisations looking to engage is the importance of timing the hope is that following the winter period, which is a particularly politically sensitive time, ICSs will have greater bandwidth to begin to implement their strategies.  

2. There’s no shortcut to engaging with all ICSs, and no one-size fits all approach 

When looking to secure policy changes, there is currently no shortcut to speaking to all 42 ICSs. We are starting to see some ICSs coalescing or developing strategic multi-ICB structures where some ICBs lead on certain workstreams on behalf of others. This trend is likely to become more commonplace – so engagement may become more streamlined in the future.  

For now, the best route to engage with multiple ICSs comes through existing forums, including NHS Confederation’s ICS network and NHSE’s Academic Health Science Networks (AHSN) 

3. Medicines optimisation and management is a priority with positive examples needed  

One key barrier to ensuring medicines optimisation is that current financial models are created to show benefits to local service providers – some of which are not covered by ICS budgets. There needs to be an overhaul of where the service is delivered, where the money flows and where the savings are realised. While there is clarity on this being a problem – at present there is no solution.  

NHS Confederation would welcome examples of impactful collaborations between ICSs and industry as there is currently a shortfall of tangible examples.  

4. New evidence and ideas to support the delegation of specialised commissioning are welcomed  

The delegation of specialised commissioning to ICSs remains a concern. Prescribing budgets will remain with NHS England, but services deemed ready for integration will be delivered locally. There are outstanding questions as to whether individual ICSs are equipped with the right workforce and expertise, and what multi-ICB structures could be formed.  

This is especially pertinent in the case of rare diseases. Given their low prevalence in local areas, rare diseases are unlikely to be a core focus for ICSs, as evidenced by WA’s analysis which found that just five of the ICB five-year plans featured rare diseases.  

However, there is optimism that the transfer of specialised commissioning responsibilities offers the opportunity for a reset. If done right, it could ensure the repurposing of specialised commissioning budgets across the whole pathway, challenging local systems to reduce spend on tertiary services, and instead finding new ways to act earlier.  

5. Understanding where each ICS is placing strategic emphasis is critical 

Each ICS is at a different stage of maturity and there is distinct variation in size, scale and local characteristics, meaning a one-size fits all approach to engagement will not work. As a first step, understanding where you may wish to begin engagement and how to frame this in line with local priorities is essential. 

At the end of June 2023, 40 of the 42 ICBs had published their five-year joint forward plans setting out their strategic vision to tackle the health issues faced by their local population.  

To support industry, WA has undertaken an in-depth analysis of the plans to create an interactive map showing the level of priority each ICB is placing across 27 themes. Understanding the ICBs that are prioritising your areas of interest, can support you in identifying meaningful collaborations and partnerships aligned to an ICB goals. 

About WA Communications 

WA Communications is an integrated strategic communications and public affairs consultancy. Our specialist health practice supports clients across a diverse range of diseases at the intersection of policy, government affairs and communications, to achieve their strategic objectives. 

If you would like to discuss how to best work in partnership with Integrated Care Systems, and our analysis of their key areas of focus, contact Lloyd Tingley atlloydtingley@wacomms.co.uk. 

 

 

 

 

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Resetting net zero: the implications for business?

One of the key questions on the minds of business representatives attending Conservative Party Conference in Manchester this week will be just what the implications of the Prime Minister’s reset on net zero are. Industry will be looking for reassurance from ministers over the coming days that the broad net zero agenda remains in place and for confidence on other policy measures.

Last week, WA hosted a webinar with Nathalie Thomas, former Energy Correspondent and writer of the FT’S LEX column and Sam Hall, Director of the Conservative Environment Network to explore whether the political consensus on net zero is broken, and if it is, what that means for business.

These are our key takeaways:

1. There may have been limited substantial policy changes, but it has still caused uncertainty

The Prime Minister’s speech gathered significant interest, but on the substance, it arguably moved the dial less. While the phase-out date for petrol and diesel vehicles has shifted back five years, the ZEV mandate proposals announced by the government in recent days showed there will still be a very significant increase in EVs as a proportion of the market by 2030.

There are large swathes of the net zero agenda – particularly on industrial and power decarbonisation – that have not been impacted by these specific proposals. However, Sunak’s speech still caused concern and disruption to many of these businesses. For businesses and investors the sense that long-term policy frameworks could change so suddenly, has cast doubt over the certainty and stability of other policy areas.

2. It’s all about the politics

As we enter a critical general election campaign businesses need to recognise that politics is ruling the day. Ideas may stand up on pure policy and technical terms, but if they don’t fit into the government’s political agenda they’re unlikely to be taken seriously, and policy already in train that doesn’t meet this test could be under threat.

This means it is essential for business to fully understand the different factions and priorities within government, and knowing who’s influencing No10 and key departments. Messaging and policy asks from businesses need to be aligned with these political trends to succeed.

3. But how effective was the political trap the government tried to set for Labour?

The motivating factor within government was to force Labour into having to defend policies presented by government as expensive and disruptive to consumers. No10 wanted to create a ‘wedge’ between the parties. The Labour Party appear to have avoided this with a pragmatic commitment to reinstate the 2030 ICE phase-out date and by suggesting they will review the approach to domestic heating if they enter government.

The Conservative Party’s position in the polls has stabilised, and in some cases improved since the speech, but it is still to be seen whether it changes the fundamentals ahead of the general election. Currently, that doesn’t appear to be the case.

4. Businesses can do more to communicate the benefits of the green transition

Businesses are understandably frustrated at the policy instability. However, it also places the spotlight on the responsibility that businesses have to make the case for net zero and the green transition. The Prime Minister’s renewed focus on consumer affordability makes it even more critical for businesses to show that the agenda – and specific policies that will fit within it – will reduce costs for consumers and offer the best value for taxpayers and consumers.

Equally, the promise of ‘green jobs’ is made regularly, but there’s a renewed opportunity in the run-up to the next general election for businesses to be more specific and tangible about this – where are these jobs, what will they look like, how can they show they are ‘real’ and not just numbers from a spreadsheet?

This will make it much harder for policymakers to row back on the wider agenda in future, with clearer acceptance of the benefits and value, with net zero not just perceived as a cost.

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Labour Spotlight – Key people for financial and professional services

Under Keir Starmer the Labour Party has reset its relationship with corporate Britain and reestablished itself with the financial and professional services sector (FPS) through a sustained charm offensive in the City and beyond.

Led by Shadow Chancellor Rachel Reeves and closely supported by Jonathan Reynolds, Shadow Secretary of State for Business, and Tulip Siddiq, Shadow City Minister, this strategy is paying dividends. Bloomberg reported that the majority of money managers and traders backed a Labour government at the next General Election being the best outcome for the City.

While the Labour party can be pleased with establishing a receptive audience across FPS, which anybody who has recently attended an event with Rachel Reeves can testify, significant challenges remain.

Economic Growth

Primary among these challenges is delivering on the first of Labour’s five key missions for Government: ‘Secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country making everyone, not just a few, better off’. With the UK economy suffering from continued weak growth – currently forecast by the OECD to have the second lowest growth across the G20 in 2024 – high inflation and a cost-of-living crisis, the shadow team will be at the forefront of explaining, and then implementing, this incredibly ambitious target, if Labour forms the next government.

So how will Labour jumpstart UK economic growth? Plans are already being set out. Rachel Reeves sees the transition to NetZero as a significant opportunity. The party’s Green Prosperity Plan crystallises this thinking and scale of ambition, whilst also recognising the threat to UK competitiveness of the Inflation Reduction Act and European response. Equally, a robust Industrial Strategy is being developed under Jonathan Reynolds to set out a framework for a stable, long-term planning and investment.  The FPS will be a critical partner for Labour in delivering on both these headline economic policies and has welcomed Labour’s commitments to reform planning laws, especially for renewable energy projects.

However, many questions remain on policy detail. For example, how will a Labour government meet its commitment to deliver 100% clean power by 2030? Especially, while delaying its pledge to invest £28bn annually in green investment until the middle of the next Parliament (2026), on the grounds of fiscal responsibility.

Financial and Professional Services

The last few years has seen major policy reform across the FPS sector. The Financial Services and Markets Act has created a UK regulatory framework for financial services, payment services and financial market infrastructure. The current government has set out its future vision for FPS through the Edinburgh Reforms and recently the Mansion House Reforms, with significant impact for the insurance and pensions sectors.

Labour has played an active role in this reform process, but again questions remain over how this policy landscape will evolve under a newly formed Labour government. Will it stick with the current vision for the regulatory framework for FPS in the UK? Will it fully implement the Mansion House reforms, given the shadow team have announced their own headline policy on pension reform? Will it align with the government on delaying some NetZero targets? How will it regulate the Buy Now Pay Later Market? How does it see the development of Open Finance? Will it continue with audit reform? How will it manage the tension between the supervisory role of regulators, with the ‘new’ secondary objective focused on competition. The list goes on!

Brexit

If this was not enough, Keir Starmer’s recent meeting with President Macron in Paris, and France and German proposals for a tiered EU membership has put Brexit in the media spotlight again. Labour is clear that there is no intention of re-joining the single market in a first-term Labour government, and the FPS sector has largely moved on from Brexit.

However, the review of the EU-UK Trade and Cooperation Agreement in 2026, and Starmer’s commitment to get a “much better” Brexit will ensure that 10 years after the EU referendum vote the UK’s relationship with Europe will remain a live issue for FPS.

WA Communications

WA’s Financial and Professional Services practice has put together a top line summary of the Shadow Cabinet and Ministers who will deliver on Labour’s ambitious plans for FPS and the UK economy. These are the people that your business needs to know and track as they develop the policy detail to achieve the ‘highest sustained growth in the G7’.

Labour Spotlight: Key people in Financial and Professional Services [PDF]

If you would like to find out more about WA’s Financial and Professional Services Practice and the services we provide, please contact Tom Frackowiak at Tom.frackowiak@wacomms.co.uk.

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Sunak draws battle lines over environment

The Prime Minister has moved to put clear blue water between himself and his predecessors in Number 10 and has broken the political consensus on how to reach net zero.

By delaying deadlines for phasing out new petrol and diesel cars until 2035 as well as scaling back requirements on phasing out new gas boilers, Rishi Sunak is seeking to give voters a clear choice between Tory and Labour environmental policy.

His decision generated favourable headlines in right-of-centre media but has alienated powerful voices in the business lobby.

Marc Woolfson, WA’s head of Public Affairs, draws eight early conclusions from the announcement.

  1. This is a highly political move to create clear dividing lines with the Labour Party on net zero policy – as well as who should pay and when. The government is betting that voters will welcome the removal of costly and inconvenient interventions on home heating and insulation.

The political strategy behind this was to force Labour to take contentious positions and make financial commitments that could damage its economic credibility. At a political level, Number 10 will feel happy that the PM’s statement has landed well with the audiences it was intended for. It has been lauded by right-leaning media. But there are questions over how effective it has been in damaging Labour.

  1. At first blush, Labour appears to have managed to avoid the ‘bear traps’ that have been set for the party, taking a nuanced approach to the various measures announced in Sunak’s speech. It has vowed to reverse the PM’s decision to kick the ban on new petrol and diesel cars down the road. In contrast, it has committed to assessing measures designed to decarbonise heating more fully if it wins the election.
  1. Many of the reasons Sunak gave for implementing the delay echo concerns that many in industry as well as would-be drivers of electric vehicles have already raised – notably on EV charging infrastructure, lack of access to grid connections and an underdeveloped UK battery industrial supply chain. Interesting, then, that powerful voices such as the Ford motor giant and the SMMT industry body have been among the loudest voices protesting against the announcement.
  1. As ever, the devil will be in the detail. Across the economy – particularly in the power sector – reforming grid infrastructure has been the number one concern of businesses for some time. The rhetoric from the Prime Minister gives industry confidence, but there will be a need to see exactly what this means in practice and whether it can bring forward the time it takes to build new infrastructure.
  1. Massive investment is needed to overcome these challenges, which requires confidence and a stable policy framework. Sunak’s announcements, whilst framed as pro-consumer and (at least partly) in line with the concerns of business, are likely to weaken the UK’s attractiveness as a destination for global investors. The potential future economic gains and jobs that have underpinned the political consensus up to now may also be under threat.
  1. Beyond the specific measures, the general mood music will leave a lingering concern amongst businesses that as the election gets closer, Number 10 may feel that it is politically convenient to scale back other elements of net zero policy. Those parts of power or industrial decarbonisation that are seen as particularly costly or disruptive to the public, such as critical electricity pylons to connect new renewables projects, or essential low carbon technologies that come with significant price tags may be particularly vulnerable. Recent scrutiny of a consumer levy to fund new hydrogen projects may offer a glimpse of what is to come.
  1. It’s a useful reminder to business of the importance of looking at new proposals through the lens of consumer affordability. In the run-up to the election, clear evidence of how specific projects and policy ideas deliver best value for money for taxpayers or billpayers will be crucial.
  1. Significant details still need to be fleshed out, following the headline announcement. Labour also has to decide whether to hold onto positions which opponents in Parliament and in the media will portray as anti-consumer. The party must hope that its Industrial Strategy can convince a sceptical public that there are major gains to be made. Whether this will resonate on the doorstep in the heat of an election campaign remains to be seen.

Our analysis of the media coverage of Sunak’s announcement shows that he has won the staunch backing of the popular press and right-wing commentators. While he generated huge media interest (14,000 mentions across traditional media), coverage has been broadly neutral.

The same could not be said for social media, where the great majority of posts are critical.

 

Join our webinar on Wednesday 27th September, to explore what these recent Net Zero policy changes mean for transport and energy businesses — Chaired by WA Director Angus Hill, with insights from Nathalie Thomas, writer of the FT’s Lex investment column and the paper’s former energy correspondent, and Sam Hall, Director of the Conservative Environment Network.

Please RSVP to events.rsvp@wacomms.co.uk

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Engaging with Integrated Care Systems’ priorities

At the end of June 2023, 40 of England’s 42 Integrated Care Systems (ICSs) published their Integrated Care Board (ICB) led, five-year joint forward plans.  

The long-awaited plans set out each ICBs strategic vision to tackle the health challenges their population faces. They have been developed by examining local need, taking into account an array of local health stakeholders priorities. 

To ensure the plans are impactful NHS England issued three core principles that they must all follow:  

  1. The plan being fully aligned with the wider system partnership’s ambitions. 
  2. The plan building on existing local strategies and reflect universal NHS commitments, for example, reducing health inequalities. 
  3. The plan being delivery focused, including specific objectives, trajectories and milestones as appropriate.  

With only loose guidance, and in line with the ambitions of integrated care, ICBs delivered plans in a range of formats, with a range of different priorities and approaches to improve healthcare locally. 

Now that their priorities are set, industry, patient advocacy groups and other key stakeholders need to now be engaging with these evolving bodies. However, this is challenging given the great divergence in their approaches, making it harder to have an in depth understanding of local priorities and initiatives they can support ICBs to achieve.  

To help improve this understanding and support strong collaboration between the private, third sector and ICBs, WA Communications has undertaken an in-depth analysis of all 40 ICB five-year joint forward plans. 

Methodology 

Our data, displayed in a brand-new interactive map, has been created following a deep-dive analysis of all 40 ICB plans, and any standalone documents published to alongside the plan.  

To do so, we prepared a four-point scale (0 to 3). On the scale: 

In total WA Communications have analysed 27 areas of focus in ICBs five-year joint forward plans, including specific conditions, performance objectives and cross-cutting health themes. Full data can be viewed via our new interactive platform.  

Data map 

Our five key takeaways 

About WA Communications 

WA Communications is an integrated strategic communications and public affairs consultancy. Our specialist health practice supports clients across a diverse range of diseases at the intersection of policy, government affairs and communications, to achieve their strategic objectives. 

If you would like to discuss how to best work in partnership with Integrated Care Systems, and our analysis of their key areas of focus, contact Lloyd Tingley at lloydtingley@wacomms.co.uk.

 

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Buy Now Pay Later: stalled regulation risks hitting responsible lenders and consumers

Today the Treasury’s Future of Payments Review call for input draws to a close and in due course, Chairman Joe Garner will set out his recommendations on how the government can deliver world-leading retail payments.

The regulation of Buy Now Pay Later (BNPL) products and services continues to demonstrate the intense political scrutiny of retail payment journeys and consumer finance more broadly.

Despite some progress made by the Government, a timeline implementing secondary legislation to bring this interest-free BNPL option under the remit of the Financial Conduct Authority (FCA) regulator remains unclear. Recent speculation over the Government’s delay has prompted fresh concern, particularly amongst Labour politicians, that regulation will be hindered and that consumers will potentially be put at risk.

This delay is said to be driven by a desire from ministers to maintain consumer choice on interest-free consumer credit products during the cost of living crisis and ensure providers stay in the UK market. If speculation is to be believed, this approach is symptomatic of the Chancellor of the Exchequer Jeremy Hunt’s overarching ambition to drive economic growth and market competition.

The draft secondary legislation, through the Financial Services and Markets Act, is supported by the FCA, with its Chief Executive, Nikhil Rathi recently informing the Treasury Select Committee that legislation is required to prevent consumer harm. And leading market players, such as Klarna have also called publicly for proportionate regulation of the sector.

Labour have looked to exploit the delay to demonstrate a commitment to consumer protection – a hallmark of their positioning in the lead up to the General Election. And in a recent letter to the City Minister Andrew Griffith, Shadow City Minister Tulip Siddiq reiterated that Labour would work with industry to regulate the BNPL sector, having previously raised amendments to the Financial Services and Markets Act on the undertaking of credit checks, access to the Financial Ombudsman and consumer protection under the Consumer Credit Act.

This continued political scuffle over the shape and timing of BNPL regulation creates uncertainty for the market. Yet despite this uncertainty, there is an opportunity for BNPL providers to establish themselves as a partner to government, help to shape what “good” looks like and show progress on self-regulation.

Our recent research found that 42% of MPs cite evidence of consumer outcomes as the biggest factor in informing their policy decision making and 44% want to see consumer data and insight, so providing evidence of good consumer outcomes is key for the BNPL sector. In the pre-election period, it will be crucial to strike a balance between showing commitment to the market while highlighting that consumer care is at the heart of all operations.

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In Conversation with Steve Richards — An Agenda-Setting Return to Westminster

WA Senior Adviser, broadcaster and journalist, Steve Richards and WA’s Head of Public Affairs, Marc Woolfson, gave their take on an eventful first week in the return to Westminster including the far-reaching reshuffle of Starmer’s Shadow Cabinet, as well as predictions for party conference and the repercussions of upcoming by-elections that are all to play for.

The conversation is the latest in a series of discussions with senior political and media figures hosted by WA, and we have outlined some key takeaways from the discussion below:

Leaders attempt to get a grip

Over the last two weeks, Sunak and Starmer have been getting new top teams in place ahead of a critical political period. Sunak attempted to capture momentum heading into the first week of term starting with a reshuffle of critical people into critical roles. This has been dwarfed by a nightmarish back to school week with the RAAC scandal dominating headlines and Labour capitalising on the government’s perceived negligence.

This week, Starmer carried out an extensive reshuffle of his Shadow Cabinet, coinciding with former civil servant Sue Gray’s first day as his Chief of Staff. The reshuffle saw many changes made, including the widely reported demotion of Lisa Nandy from the Shadow Levelling Up brief – a move some within the party deemed bold, somewhat brutal, and reflective of Keir’s win-at-all-costs mentality.

Angela Rayner has inherited Nandy’s Levelling Up brief which is set to deliver a historic transfer of power from central government to local and regional authorities. However, whether or not this shift in power will become a reality remains to be seen, given the substantial financial implications.

As anticipated, the most senior members of the Shadow Cabinet, and those with responsibility for Labour’s ‘five missions’ remained in post. Ideologically, there has been a power base increase of (what could be called) Blairite centrists. With a focus on fiscal rectitude, reform to create efficiencies, and ensuring all policy commitments are scrupulously costed – a position Rachel Reeves and her team are ardently championing.

This reshuffle, combined with the 20-point lead in the polls, has resulted in an uneasy excitement within Labour, as the outline of the next government begins to take shape and policy development gets in full swing.

Party conference fever

Unlocking economic growth via industry investment, transformative tech and R&D and will be a golden thread running through each conference.

For the Tories, this focus is reflected in the news that the UK is expected to re-join the EU’s flagship science research scheme, Horizon. And Sunak’s party conference speech will be an important attempt to show he and the party have a vision that goes beyond the next few months.

Echoing the rhetoric of Blair’s 1997 campaign, Labour will lean heavily into the theme of science and technology to regenerate public services and generate growth. Shadow Business Secretary Johnny Reynolds is set to outline detail on the industrial strategy – how the private sector and government can collaborate to facilitate fertile grounds for inward investment. This, alongside the green recovery programme – championed by both Starmer and Reeves – is regarded as the engine for economic growth Labour is committed to. However, it is unlikely we will gain clarity on the finances behind these strategies until given the green light by Reeves.

Starmer remains laser focused on delivering his “five missions”, meaning any policy recommendations put forward by businesses should aim be framed within these ambitions.

Bellwether by-elections

The upcoming by-election in Rutherglen and Hamiliton is a pivotal moment for Labour in Scotland. It is a litmus test for whether Labour’s messaging is landing well in Scotland and if won, is indicative of the electorate moving in their favour.

In Nadine Dorries’ contested seat of Mid-Bedfordshire, tactical voting between the Lib Dems and Labour may secure a blue defeat, but the Tory’s could win on a split opposition vote. A loss in this seat will no doubt stoke Tory fears that the Lib Dems are gaining traction in the so-called Blue Wall and will have implications for Sunak’s campaigning tactics. The Tories will also put up a fight against Labour in the election for Chris Pincher’s constituency of Tamworth.

Looking ahead, the most important event in the Commons calendar will be the Autumn statement on 22nd November, followed by the Spring Budget in early 2024. It is expected that Chancellor Jeremy Hunt will amplify the UK’s post-Covid growth rate as a triumph of the Tory’s economic policy that has then allowed for tax cuts. Whatever shape and size these tax cuts take, Labour will not be in a position to oppose them.

We are gearing up for an exciting, potentially election-defining, political run in the lead up to Christmas. To learn more about what this means for you, get in touch with WA’s team to see how we can work together.

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Ruthless Starmer Appoints a Team To Win and To Govern

Most shadow cabinet reshuffles do not matter very much. This one does for several reasons. Most fundamentally Keir Starmer hopes this will be his last reshuffle before the general election. Barring unforeseen circumstances his new team is the one that will form the next government if Labour wins the election. But there is another bigger reason why the reshuffle matters. Starmer is at the height of his powers in relation to his party, a leader well ahead in the polls. He is in the rare position for a Labour leader of being able to do more of less what he wants without fearing dissent.

This is Starmer’s team of choice and therefore sheds light on the type of government he seeks to lead and who he calculates will help him to win the election. He acted with characteristic ruthlessness but he had the rare space to be brutal.

One shadow cabinet member described the changes to me as an ‘elite level Blairite coup’. The frontbencher, who remains in the shadow cabinet, noted that five former special advisers from the Blair era now have prominent posts. They join several of those in Starmer’s office who used to work with Blair in some form or other. Starmer makes many calculations in promoting the rise of those that worship at the Blairite altar. He and his shadow chancellor, Rachel Reeves, are obsessed with following New Labour before 1997 in making no significant spending commitments.

Labour’s Blairite wing are the true believers in the argument that ‘reform’ and ‘technology’ are the key to revising the UK’s economy and public services, not big spending increases. Starmer wants ‘reform’ to be a driving theme at the party conference next month.

Meanwhile the likes of Liz Kendall, Pat McFadden and Peter Kyle are effective interviewees. The previous shadow cabinet had few impressive performers. Starmer also wants to show in vivid colours that Labour has made big leaps away from the Corbyn era. There is no more effective way of doing so than including in his top team those that are as far removed as it is possible to be from the former Labour leader.

But it is too simplistic to argue that the new shadow cabinet is ‘Blairite’ whatever that term means in the current context. Other factors came in to play. His elected deputy, Angela Rayner, needed a meaty brief and she has got one with the Levelling Up remit. Rayner is a pragmatist but is no Blairite. She will need to be extremely supple. Her predecessor, Lisa Nandy, had pledged an historic transfer of power away from the centre. Nandy assumed Starmer agreed with her as this was the main theme of his new year speech in January when he spoke of communities “taking back control”. But there are inevitable tensions over how much power the centre will want to retain rather than give away to mayors and councils. Rayner will be Deputy Prime Minister giving her some leverage over wider government policy.

Some close to Starmer wanted Ed Miliband sacked. This has not happened. Miliband helped Starmer secure his seat in the 2015 election. The two live close to each other although do not speak often these days. But Starmer remains committed to the so called green recovery plan even if he has wobbled over the ULEZ policy after losing the Uxbridge by-election.

I’m told that Sue Gray, Starmer’s new chief of staff, was one of those supporting the appointment of three front benchers to shadow the cabinet office, rather than one. This is unusual. Gray knows the cabinet office can be a driver of change in government but can also be a department where ministers pull levers and not much happens. Now Pat McFadden, Nick Thomas Symonds and Jonathan Ashworth will be preparing to pull various levers from the cabinet office if Labour wins. Thomas Symonds will be responsible for improving the Brexit deal , a complex challenging task which he has already discreetly begun from opposition. The appointment of Hilary Benn as shadow Northern Ireland Secretary is also significant in this context. Northern Ireland and Brexit remain thorny issues in spite of Sunak’s improvements to the protocol.

In terms of policy making the reshuffle has little practical impact in the short term. The shadow ministers responsible for Labour’s so called ‘missions’ are all still in place. Meanwhile Starmer’s office is as controlling as Blair’s used to be in the build up to 1997. He and Rachel Reeves will make the key policy decisions. Currently shadow cabinet members are preparing their conference speeches, but the leader’s office is taking a close interest in what each of them are proposing in various drafts, often sending back detailed revisions and cuts.

Of more immediate importance to the fate of Starmer and indeed Sunak are the by-elections coming up. If Labour do not gain Rutherglen in Scotland from the SNP, a seat they won in the 2017 general election when Jeremy Corbyn was leader, there will be no substantial revival there at the general election. If Labour wins Starmer has a fresh narrative, Labour is back in a part of the UK they used to dominate.The Mid Beds by-election is also a big test. Tactical voting becomes tricky when both Labour and the Lib Dems want to win as is currently the case in that seat.

After the next couple of months of by-elections, party conferences and an Autumn Statement from the chancellor the outcome of the general election will probably be clearer and what Labour will do in government will also be less foggy than it is now.

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NHS England’s medicines optimisation guidance: What are the opportunities to improve uptake of medicines at ICS level?

The NHS has been plagued by difficulty when it comes to variation in the uptake of NICE approved medicines. With the establishment of ICSs, there has been an attempt to position medicines as strategic enablers of improved patient outcomes and NHS productivity and efficiencies rather than just a clinical intervention for patients. The publication of NHS England’s medicines optimisation guidance 2023/24 last week signals a shift to create a national framework around this ambition, which NHS England (NHSE) has linked to integrated care board (ICB) priorities. Reading the guidance, the financial imperative is clear the broader goals of medicines optimisation e.g., reduced wastage, improved outcomes, and improved safety, are consistently correlated to helping systems ‘deliver financial balance’. 

However, with financial constraints placed on ICBs and the ongoing operational pressures facing staff, the root perception that medicines optimisation equates to doing more with less must be tackled first.  

NHS England’s new guidance sets out 16 national medicines optimisation opportunities for 2023/24, and signposts to best practice resources to support implementation. NHS England recommends that ICBs choose at least five medicines optimisation opportunities.  

What does Industry need to know and do following publication of this guidance?  

Here are a few of our thoughts: 

As we look to implementation, many questions remain. Will we see ICSs prioritise the same five ‘opportunities’ and what does it mean for progress in the opportunities that are not selected? How should system partners tailor their approach to targeted interventions in each ICS, each with differing local barriers? Finally, what additional strategies can help ensure that healthcare inequalities are not exacerbated? The ambition is high and must be matched by collaborative action at national, regional and local levels.  

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Will consumer scepticism and the cost-of-living crisis remain a roadblock to rolling out electric vehicles?

With just over six years to go until the UK government’s ban on new petrol and diesel vehicles comes into force, decarbonisation policies, EV charging strategies, and infrastructure plans abound – but consumers still need to be convinced that electric vehicles are cost-effective and practical.

Electric vehicles are the cornerstone of the UK’s transport decarbonisation agenda, exemplified in the government’s ambitious deadline for ‘all vehicles to be able to drive a significant distance with zero emissions’ from 2030.

The debate on the practicalities of the ban and the impact it will have on consumers is dominating political debate and it means understanding the challenges facing motorists and their experiences is essential.

With 83% of new vehicles registered in 2022 still fuelled by petrol or diesel, WA polled 1000 members of the public to find out their views on EVs and the potential barriers to adoption. Explore our findings below.

Will consumer scepticism and the cost-of-living crisis remain
a roadblock to rolling out electric vehicles? [PDF]

To find out more about WA’s work supporting high-profile organisations on sustainable travel, net zero, and energy issues, please contact Jamie Capp – by email jamiecapp@wacomms.co.uk or on 07910 004 035.

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Do your duty: The financial regulatory shake-up of the vicennial

As the long-anticipated consumer duty comes into force today the financial services sector faces the biggest regulatory overhaul in over two decades. One marked by a notable willingness from the FCA to take “robust action” if the sector fails to comply – an indication of the more interventionist stance the regulator has pursued in recent years.

The duty reforms, driven by FCA concerns over sustained consumer detriment and poor customer service, mark a landmark moment for the market. The scope of the 120-plus page document is broad, but its four key pillars are: products and services; price and value; ensuring that consumers understand products; and making sure they get support.

And whilst the sector has had since July 2022 to prepare itself, the impact will be far reaching and could cost the industry up to £2.4bn. Banks, building societies, insurers and investment companies are amongst those impacted, as well as motor finance, product warranties and store cards. For many, it means older financial products which do not meet the higher standards will be removed from the market in a move which the FCA hopes will spur competition and drive innovation.

Whilst the consumer duty has been broadly welcomed by industry, politicians and consumer champions alike, its implementation will not be plain sailing.

The rules are still up for interpretation

The FCA is known for not being overly prescriptive in its rules. It tends to lay out guidelines and leave it to firms to interpret them. The same can be said for the consumer duty which has been simultaneously criticised as too interventionist and too vague – a difficult balance to strike. For many firms, identifying where the new rules need to be applied and the value of making these changes will be a significant undertaking.

Sections of the market have been missed

The new rules will only apply to sections of the market and products which are already regulated by the FCA, meaning that anything outside this far-reaching definition will not be held to the same standards. This is particularly key for the Buy-Now-Pay-Later sector, where recent speculation that the government will delay the timetable for new regulation, will no doubt be met with more robust criticism as the standards gap widens.

It’s going to get political

Political scrutiny of the financial services sector has been heightened in recent weeks – with attention turning to customer screening processes, passing on of savings, and reporting and governance standards. A regulatory requirement for “higher standards” across the market adds to the arsenal of MPs looking to hold the sector to account.

As we approach the next general election, politics will become simple and populist as parties focus on winning votes. That means even technical regulation can become a lightening rod for support or dissent.

The Conservative Government will point to the introduction of the consumer duty as a sign of its commitment to its voters and draw on  the duty’s principles to make new interventions. Action on banks withdrawing accounts, for example, fits neatly when framed by the new consumer duty. On the other hand, the 120-page document provides the Labour Opposition with a foundation on which to launch its consumer-centric approach to financial services and a stick to beat the Government with if it fails to take – or ask the regulator to take – action where providers fall short.

For providers, this means there is a need to review the risks and opportunities the consumer duty presents and ensure that the action they are taking to champion consumer interest shines through with politicians and the media alike as scrutiny mounts. Getting the evidence base right will be key to securing long-term impact amongst those shaping the future operating environment.

For further information or a presentation on how WA Communications can help you, please get in touch with Natasha Egan-Sjodin by email – natashaegan-sjodin@wacomms.co.uk or on 07706 325 417.

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The roadmap to Party Conference

Labour’s National Policy Forum plays a leading role in shaping the party’s election manifesto.  

Chaired by Anneliese Dodds and made up of around 200 representatives of Constituency Labour Party, Labour Councillors, affiliated trade unions and socialist societies, and the Parliamentary Labour Party, it oversees the party’s Policy Commissions, and is currently drafting indicative policy documents ahead of the party’s annual conference in October. 

Over the weekend, the Labour Party held its first full National Policy Forum meeting since 2014. (Snap elections in 2017 and 2019 meant that under Corbyn, the policy-making process was expedited to ensure the Party could launch its manifesto on time ahead of respective general elections. Unlike his predecessor however, Starmer has had the benefit of having a long run-in to the policy making forum that will inform the basis of Labour’s next manifesto).  

This has resulted in greater transparency of the outline of the platform Labour will look to take to the next election. 

Whilst the meeting of the National Policy Forum is a private meeting of the Party and the manifesto will not be publicly available until Party Conference, LabourList obtained a full list of the draft policy platform earlier this year.  

In advance of the meeting, Starmer and Reeves have been keen to set the tempo by adhering unfailingly in their commitment to absolute fiscal discipline should they come to power, and have proudly declared that nothing in their manifesto will be uncosted. Starmer asserted to delegates that a Labour Government “is not a magic wand” to undo the last 13 years, recognising that his Party – should they come to power – will inherit a bleak economic outlook. This approach has not come without criticism, and accusations that Labour are not being bolder in their policy development led to major unions Unite and GMB walking out from what has reportedly been ‘hostile talks’ at the meeting. 

Despite concerns over controversial policies such as not scrapping the two-child benefit and promising revisions to anti-protest laws, the Labour Leadership saw off the more radical proposals from the left wing of the party, and avoided any formal votes on amendments; meaning that the draft policy document presented to members after this weekend will be the one debated at Party Conference this October*. 

Over the Summer period Labour will look to hone its messaging around these policies, consider how to market them to the electorate and ensure the rumblings from the more disenfranchised elements of his Party are addressed.  

Labour will begin to slowly change the dial from development of policy to consolidation of it, and businesses should be aware of the narrowing window between now, Conference, and into early 2024 to try and influence manifesto development.

For Starmer and his team, the weekend will bring relief. Despite some friction, he has a clear mandate from his Party and its delegates to take forward to Party Conference in October. Buoyed by the by-election victory in Selby, Starmer has done enough to knit together warring factions to present a united front to the electorate as the general election begins to come into view. 

* Whilst the manifesto would normally be based on elements of policy developed by the NPF and voted on by members at the party’s annual conference, there is no formal obligation for the manifesto to include policy put forward by the NPF and the party’s membership. 

Next Left, our recent Guide to Engaging with the Labour Party, sets out the party’s policy-making processes and timeline in more detail. 

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How can government and business collaborate to create ‘good’ economic growth?

I’m a great believer that there’s something you can call good economic growth. That’s growth which creates real wealth and good jobs, but does so in a way that is lasting and respects the greatest sources of wealth we have – the planet and its people.

There’s never been a time when bringing these things together has been more important – whether to improve the state of Britain’s economy, or to address the most profound challenges of climate change and biodiversity.

For all our recent turbulence, Britain has giant strengths. These can create immense opportunities when we bring them together well: not just great companies and entrepreneurs, but also some great public institutions including our universities, legal system, and the Civil Service. These are globally respected and have huge potential as sources of value.

Most of my 30 year career in and around Government was spent doing what I’ve just described – trying to bring Government and business together to create lasting benefit for society. Then I called it micro-economic policy, and it’s what I did at HMT for 15 years – whether getting private investment into infrastructure or creating a better tax regime for entrepreneurs. It’s also what I did on the Board at Ofcom: I spent 7 years helping to set up the regulator and then run it. It was also a big part of the nearly 10 years I spent as a Permanent Secretary, or CEO-equivalent, across the Department for Transport, Home Office, and for a little while the Department for Business.

In fact one of my proudest achievements as a Permanent Secretary was helping to shift the mindset at DfT so that it was a bit less focussed on extra concrete and steel – the traditional answer to transport problems – and more focussed on radical innovation. The UK’s strong story on EVs today can be traced back to the partnership we created a decade and more ago between business, government and academe: to my mind that’s a model for government and business working together.

Chairing WA’s Advisory Board now gives me the opportunity apply this experience to help WA’s team and clients. One of the reasons I was keen to join WA was that its own approach – the emphasis on collaboration – is really well aligned with my own. And real collaboration starts with really good understanding: not just of the policy challenges and constraints that might be faced by the firms WA advises, but the longer-term goals and the sense of opportunity.

And my hunch is that after the Election, whoever wins, that theme of good growth is itself just going to keep on growing.

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Unpacking the by-elections – In Conversation with Steve Richards

WA Senior Adviser, broadcaster and journalist, Steve Richards and WA’s Head of Corporate Communications, Lee Findell, unpacked the triple by-election and assessed the implications of the results and what they mean for political parties on the first day of Summer Recess. Even though the temperatures outside will remain cool, something tells us this will be a heated summer break for political parties.

This morning’s conversation is the latest in a series of discussions with senior political and media figures hosted by WA, and we have outlined some key takeaways from the discussion below:

Immediate by-election implications

The results from Selby and Ainsty are an extraordinary win for Labour, marking the biggest swing since March 1990 at the Mid Staffordshire by-election, when Labour overturned a Tory majority of 14,654. They also reveal that rural areas and farming communities have become increasingly disillusioned in the Conservative Government and serve as an indication of what might happen on a national level – especially in the North of England – at the next General Election. Perhaps more worryingly for the party in power is the Liberal Democrat win in Somerton and Frome. Despite the Conservative Chair Greg Hands saying that Labour has lost its deposit during his morning round, Liberal Democrats picking up Conservative seats signals that tactical voting is back.

The results in Boris Johnson’s former seat of Uxbridge and South Ruislip on the other hand meant that Prime Minister Rishi Sunak did not awake to headlines which would have triggered immediate discontent and trouble in his Party. Sunak was given a protective shield – but it may be a deceptive one given the by-election in Uxbridge is characterised as a single-issue campaign. That issue being Labour’s own London Mayor Sadiq Khan’s creation – ULEZ.

Instead of euphoria, today the top of the Labour Party is feeling something more similar to anger. Anger towards its green ‘champions’, Sadiq Khan and Ed Miliband who have allowed the green agenda to bypass the immediacy of Labour’s cost-of-living platform. The results in Uxbridge have two big implications for the Labour Party. Firstly, Starmer will now face a lot of pressure to evaluate Labour’s green agenda to make sure there is nothing within it that the Conservative party can seize like the ULEZ charge. We have already seen two events that challenge that proposition, one being Shadow Chancellor Rachel Reeves pulling back on the £28 billion and the second being the back and forth on stopping all exploration in the North Sea which undermined and put at risk Scottish Labour who cannot go into the September by-election on a job losing platform. Secondly, the Uxbridge by-election highlights the fundamental contradiction in Labour Party policy of taking back control and transferring power to local communities – something Keir Starmer championed at the beginning of the year. Shadow Secretary of State for Levelling Up, Housing and Communities Lisa Nandy described this as a historic transfer of power, and at the time this meant that moving forward the focus needed to be switched from central government to local authorities. The reaction to the Uxbridge by-election, and the ULEZ policy blame-game raises questions of who will be in control under a Labour government – the centre or the local. It also appears as though Labour’s over-cautious approach made the Party vulnerable to single-issues campaigns, and without an overriding purpose and mission to fall back on as the alternative, the top of the Party will be engaging in heated debates over the summer and leading up to conference on how best to tackle this gap.

Sunak’s glimmer of hope?

The Prime Minister can breathe a (very small) sigh of relief as instead of an unequivocal media onslaught, voices will once again emerge claiming Sunak may after all have a narrow path to victory. Going back to the ULEZ issue, the PM might also face pressures to water down the Government’s climate propositions in attempting to stay in the good graces of motorists. However, this will not be an easy electoral calculation to make. The PM is also likely to undertake a cabinet reshuffle, cementing teams that will lead the Government into the next General Election. This is because Sunak must at least try to convey a real sense of moving on and change. What the nature and size of that reshuffle will be is difficult to determine. Chances of Sunak sacking Chancellor Hunt – low, Braverman – risky, Barclay – likely, Gove getting a promotion – 50/50. If the reshuffle does not happen by the end of today, it is highly unlikely it will happen next week. So we can expect the reshuffle and Sunak’s attempt at reemergence in the first week of September.

A strong reemergence from Sunak will be a challenge as many Conservative MPs consider the Prime Minister an electoral liability for the Party. Why? To start, Sunak has not managed to cut through the public and many wonder what his political purpose actually is. Also, despite having a formidable office in Downing Street, the Prime Minister has not succeeded in managing the Party and is not doing any better against his five priorities. What does this mean for business? In practical terms, from September onwards the focus will be entirely on the election. The legislative programme will be carried over in September when Parliament will sit for a few weeks before dispersing for party conferences. Upon return, there will be a King’s Speech targeted solely on winning an election, featuring no significant pieces of legislation. Then all eyes will turn to the Chancellor’s Autumn Statement, followed by a cosy break for Christmas and then the Spring Budget which will be the last, and most important, fiscal event before the General Election.

And what about Starmer?

Albeit for different reasons, it is not much rosier in Starmer’s garden. Starmer’s reshuffle will likely come in September and will be a significant one. Rumours are Nick Thomas-Symonds, current Shadow Secretary of State for International Trade will end up in the Cabinet Office which would have interesting implications for Britain’s relationship with Europe. Angela Rayner might get the levelling-up brief, while Lisa Nandy could get demoted to Leader of the House. And what to do to about Ed? It is likely Miliband will keep his post given his and Starmer’s close relationship, and the fact that Miliband helped Starmer get elected. However, following Uxbridge businesses will have to carefully frame the dialogue around green policies and Net Zero with the Labour Party. While Labour’s overarching climate change commitment is unlikely to change, the Party will scrap anything that is remotely equivalent to ULEZ in a way that it takes away focus from the cost-of-living crisis, or worse, adds to the financial burden of voters. Starmer will look at every policy area from an electoral perspective, i.e., winning at the next General Election. A different challenge for businesses will be trying to delve deep to work out the gap between the surface narrative from Starmer and Reeves leading up to the election and what Labour will do in power.

The race is on for third place in Parliament

By-election results have also shown that after a troublesome few years, the Liberal Democrats are back as a significant political force. Depending on what happens in Scotland, including the by-election in September and the investigation into Nicola Sturgeon’s SNP leadership, the Liberal Democrats have a real chance of becoming the third force in Parliament. Starmer does not want to form a coalition Government with the Liberal Democrats, nor does he possess the necessary political skill to navigate the challenges that come with it. This may be why Labour are in Scotland every weekend.

General Election speculation

Despite speculation that Sunak will try to go for an early election, this is highly unlikely. While he is behind in polls, Sunak will wait. So the General Election is still expected in October or November next year. But before that, a major event will the local elections in May, including the London mayoral election which will determine the whole pre-election mood and be treated as a great pre-election test.

Our key takeaway – businesses should prepare for a busy first week of September and after that for a political environment entirely engulfed in the next General Election.

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2023 Mansion House speech analysis: common sense reforms that may require more sector management than the Chancellor would like

In his annual Mansion House speech, delivered last night to City executives, Chancellor Jeremy Hunt turned his focus towards the UK’s largest pension funds in his latest attempt to boost the flatlining UK economy, and address the lack of inward investment into the UK’s growth industries.

As part of the “Mansion House reforms”, Hunt set out proposals to channel £50 billion from Britian’s direct contribution (DC) pension funds into high growth companies – such as life sciences and high technology. At the centre of this is a “compact” signed by the UK’s nine largest DC pensions providers, committing these fund managers to voluntarily invest 5% of their assets into unlisted equities by 2030.

As well as the compact agreement focusing specifically on direct contribution firms, the Chancellor also outlined a package of other policies for pensions, including exploring expanding the role of government in establishing investment vehicles; a consultation on doubling existing private equity investments in local government pension schemes; and a call for evidence on the role of Pension Protect Fund, amongst other measures.

Hunt also confirmed the Government would continue implementing a series of capital market reforms (many of which were already announced) that aim to make the UK a more attractive place for companies to list – aiming to reverse a steady decline in listing numbers in recent years. The most notable of these was the backing of new recommendations from Rachel Kent’s investment research review. The proposed changes would partly roll back the EU’s Mifid II rules, which barred stockbrokers from providing research for free by “bundling” it with share trading services for which clients pay a commission.

The flagship announcement on pensions has broadly been received well by the City and the sectors of the economy that stand to benefit from the investment (most notably tech and life sciences). This is seen by industry as a rather overdue set of reforms, bringing the UK more in line with economies like the US and Australia who have been able to generate much higher returns for consumers in their pensions schemes.

There remains skepticism as to whether a non-binding agreement will be strong enough to push direct contribution fund managers to meet the target and provide the investment the government is promising – the headline £50 billion figure will only be met if the entire DC sector follows the lead of the 9 signatories.

Either way, the UK’s science and technology sector will benefit hugely from the extra funds channeled into it through VC and private equity, even if the £50bn figure isn’t reached – an extra £2bn to the sector would still amount to twice the funding in the Government’s 10-year semiconductor strategy.

Not every measure announced by the Chancellor has been met with praise from affected stakeholders however – Quentin Marshall, chair of the Royal Borough of Kensington and Chelsea pension fund (the UK’s largest), being quoted this morning saying he “had not seen the evidence” to support the plan for the DB local government pension schemes that the Chancellor is proposing.

As he demonstrated in his March Budget with the removal of the pensions cap, Hunt clearly believe this is key to reinvigorating the UK economy, and again had no problem in announcing policies that have previously been trailed in a similar form by his Opposition number Rachel Reeves. Based on the similarities in the measures announced in last night’s speech and those trailed by Reeves at a speech in New York 6 weeks ago, it’s clear that both parties are in a very similar place on pensions and investment policy – which will be a welcome piece of continuity for the markets and industry.

Crucially however, the plan announced by the Chancellor last night does not include a requirement for the money to be invested in UK companies – firms would be free to find high-growth investments elsewhere if they so choose. It should be expected that Reeves and Labour would not be as open as the current Government on allowing fund managers to prioritise foreign firms to UK ones.

Overall, the reforms announced yesterday evening by the Chancellor were a common sense, in many ways overdue, set of policies that attempt to put keep the City, and the wider UK economy ahead of comparative rivals around the world. It makes London’s capital markets more able to invest in the high-growth industries that the Government is so keen to foster.

However, given the voluntary nature of the compact agreement, a robust implementation period and close monitoring of fund managers by the Treasury will be critical – the Chancellor may need to crack the whip harder on the City than his ideology would usually allow.

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Labouring to the point

Even though the energy crisis has taken a back seat in the news cycle, the impact it has had on consumers, their behaviour, and overall public awareness of where their energy comes from, is stark.

However many industry commentators believe that, to date, very little has been done by the Government to prevent such a crisis from happening again.

With several complex, but complementary, policy issues remaining high on voters’ agendas, the Labour Party has been tentatively navigating complex waters as it sets out its stall ahead of the next General Election, looking to capitalise on perceived current inaction.

Climate change, energy costs, and energy independence is a challenging trifecta to find a solution to at the best of times, let alone when the overriding priority is to project economic competence and fiscal trustworthiness.

An additional twist in the tale for Keir Starmer has been the dramatic way in which Scotland has electorally come into play, which 12 months ago he could only have dreamt of. Labour is now facing the very real prospect of tangible, double-digit Parliamentary gains north of the border, which could make the difference between a clear majority, or a hung Parliament.

Balancing each of these considerations has seen a number of previously solid commitments become softened, watered down, or changed altogether.

Two headline pledges, no new oil and gas licenses, and investing £28bn a year in green infrastructure, have been the main casualties.

The latter has been slightly amended so that instead of the full annual investment starting immediately, it’ll be built up to in the first half of a Labour Government. This has generally been interpreted as a pragmatic move, as deciding what to invest that level of money, finalising deals, and then spending it within 12 months was perhaps always an unrealistic timeline.

The former has been somewhat more eventful. Rifts have opened within the Labour front bench; and the unions, most notably the GMB, have started flexing their muscles. In addition, Anas Sarwar’s political capital has grown exponentially, making him an even more influential figure in the Party machine.

The result? A fudge. Labour will now honour any licences issued before the election, their position on CCS has suddenly become very positive, and the previous ban on new licences has now been limited to only blocking new exploration licenses, a minor but crucial difference, specifically aimed at keeping Scotland in play.

Beyond it being a fantastic case study for observers as to how the levers of power within the Labour Party work, it’s also a strong indication as to how seriously Keir Starmer is taking the Party’s policy development, not letting anything jeopardise any chance he may have of becoming the next Prime Minister.

‘Next Left’ – WA’s recently published Guide to Engaging with the Labour Party – explores the people, processes and politics shaping the development of Labour’s next election manifesto, and how businesses can engage with the party’s plans.

We will shortly be releasing a deep-dive specifically exploring the Labour Party’s emerging energy sector policies. To receive a copy, please email angushill@wacoms.co.uk.

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In Conversation with Steve Richards

WA Senior Adviser, broadcaster and journalist, Steve Richards and WA’s Head of Public Affairs, Marc Woolfson, provided their take on the latest developments in Westminster and Whitehall, and unpacked what this means for anyone seeking to engage with the Government and understand the potential priorities of a Labour administration.

This conversation is the latest in a series of discussions with senior political and media figures hosted by WA.

Yesterday morning, Steve shared his insights on the mood at No.10 before providing reflections on the Government-in-waiting and Starmer’s preparations to ‘take back control’ of the country.

We’ve outlined five key takeaways from the discussion below:

1. General Election still predicted for Autumn 2024

At the time of our conversation with Steve, the Privileges Committee had just released their report on how Boris Johnson misled the House. Following the resignation of Johnson and Nigel Adams over the weekend, Sunak now faces (at least) two challenging by-elections in Uxbridge and South Ruislip, and Selby and Ainsty. Amidst this upheaval, some in Labour are hoping for a snap election.

Steve, however, is still setting his sights on an election in Autumn next year. From his viewpoint, although there will be continuing challenges for Sunak arising from this event, Johnson’s exit from the Commons marks a significant diminishment of his political prowess and danger to Sunak.

Unless we see a significant closing in Labour’s lead, Sunak will likely delay the election in the hopes the tide will change by next year.

2. Zombie Parliament: Sunak’s five pledges

Beyond firefighting a constant stream of internal upheaval and scandal, Sunak remains focused – if not obsessed – on achieving the five pledges he set out in January (halve inflation; grow the economy; reduce national debt; shorten NHS wait lists; and stop the boats). Halving inflation by the end of this year is a must as Sunak cannot afford to approach an election with rising inflation rates.

As a result of this focus, there is talk of a ‘zombie parliament’ at Westminster. For the foreseeable future, activity in Parliament will mainly be used as a mechanism for building up to the election rather than to pass any weighty pieces of legislation. As an example, long-awaited proposed reforms to modernise the UK rail industry have fallen by the wayside.

Ultimately, there simply isn’t much legislative time available to the Government with preparation for the party conference in October, and long recesses pushing MPs back out to campaign in their constituencies.

Anyone seeking to engage with Government on legislation over the coming months may struggle unless it falls within the remit of Sunak’s five priorities.

3. Keir and Reeve’s cautious policy: Nothing without funding

Keir Starmer and Rachel Reeves are taking a cautious approach; every piece of policy is submitted to Keir’s office for scrupulous checking for any claims that might imply an increase in spending.

The party’s proposal to scrap ‘Non-Dom’ tax status – which Labour says costs the Exchequer £3.2bn – is increasingly the answer to almost any question about the viability of its spending plans.

But with Jeremy Hunt rumoured to be looking at announcing exactly this move in the Autumn Statement, effectively removing this potential uplift from Labour’s plans, Kier is especially nervous about any discussion on spending.

Labour is also being very quiet on their policy plans and recently rowed back on commitments in their green recovery programme and on universal childcare.

In line with this preference for fiscal responsibility, as well as Blairite influences at the heart of Keir’s team, Labour is driving their focus towards policies that symbolise change without spending money, including technology, innovation, and AI.

4. Labour and business: Now until Autumn is the prime time to engage with Labour

Between now and Conference is an important time for industry to engage with Labour if they are looking to shape the direction of policy.

Starmer wants Labour to look like the party on the edge of forming a Government by the time Party Conference comes around in October. Speeches will need to be policy-rich, trailing their manifesto, which is already being drafted.

Labour is sincere in its claim that its door is open to business. Industry interest in the party serves as a reassuring recognition that they are viewed as the next likely candidate to form a Government. If Starmer wants to realise his mission to get the economy growing faster than any other country in the G7, Labour will need close relations with businesses to achieve this ambitious goal.

Jonathan Reynolds (Shadow Secretary of State for Business and Industrial Strategy) is expected to announce further details of Labour’s industrial strategy at Conference, formalising their goodwill towards industry.

However, if in power, relations may be more strained as Reeves seeks to fill her funding gap, with the potential for businesses to face new ‘stealth taxes’. Industry will benefit from putting in the groundwork now, during a period when Labour is reticent to reveal any tax rises that may make headlines during the pre-election test period.

5. Public sector and unions: The challenge ahead for a Labour Government

Winning the election will only be the first hurdle for Labour. Should they win, they are set to inherit a challenging landscape, especially in the public sector.

Unions present a considerable challenge. Labour hopes relations will improve through greater goodwill and by restructuring who is involved in negotiations. However, as New Labour did in 1997, Starmer plans to stick with Conservative spending plans for the first two to three years, so will not have the money to meet the pay demands of the unions.

On the NHS, Labour’s plans have been ambitious but vague. Although they highlight scrapping non-dom tax status as a means to pay for recruitment into the NHS, internally, Labour knows this will not be enough. Moreover, Wes Streeting has asserted his ambition to ‘reform’ the NHS but has not defined this ubiquitous term. Internally the party is divided on their position over the use of the private sector to meet capacity.

Starmer is also acutely aware that he has U-turned on many of his leadership pledges, including plans to abolish university tuition fees. At present, the current model for higher education would not see much change, however, if in power, university schemes and the graduate tax are areas Starmer may revisit.

The theme of the first term of a Labour Government will be dominated by one question: where’s the money coming from?

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Hope for The City… or just agreeing to talk?

Amidst the challenging economic picture facing Rishi Sunak’s government, from mortgage rates to food inflation, any potential good news story has been seized upon by Downing Street. The latest of these came on Tuesday with the announcement from the Treasury that Chancellor of the Exchequer Jeremy Hunt had signed an agreement on post-Brexit regulatory cooperation with his counterpart on the EU Commission, Mairead McGuinness.

As a signal of intent for those within the industry, this is undoubtedly a positive step – indicative of a thawing of relations and a commitment to regulatory cooperation that will be critical if the City is to move on from the temporary arrangements that have hung over the sector for the last few years. It is also a clear reflection of the Government’s desire to woo industry leaders ahead of the next General Election; a charm offensive being mirrored by Shadow Chancellor Rachel Reeves MP and her team. Reassuringly for the City, this is one area of policy in which businesses and investors can expect a degree of continuity – Labour have been consistent in calling for a deepening of ties between the UK and EU on financial services in particular.

Amongst other things, the deal includes a commitment from both sides to work to improve transparency; reduce uncertainty; solve cross-border regulatory issues; and where appropriate, improve interoperability of standards. There is enough meat on the bone here to shape conversations with regulators and use as a springboard to push for the all-important conversations around UK-EU market equivalence.

That said, it’s important not to overstate the deal as it stands. While key players have welcomed the direction of travel, nearly all of the praise has been tempered by the fact that an announcement of this ilk has been long overdue – and still fundamentally amounts to an agreement to talk to one another.

The new Forum is committed to meeting “at least” twice a year. With the current arrangement on equivalence set to expire in June 2025, you would expect that regulators – along with their political masters – would need to meet much more frequently than the minimum 4-5 sessions mandated in the MOU in order to hash out what would amount to a landmark regulatory agreement.

Moving from voluntary cooperation on these relatively small-scale issues to a broader agreement on UK-EU equivalence remains the ball game, though. This leaves significant room for industry to inform policy and regulatory decisions going forward. We know from our research that MPs particularly value both data and consumer case studies when considering their views on financial services policy or regulatory reform.

Demonstrating where closer cross-border alignment will help achieve party economic growth ambitions will be critical – as well as how industry can help drive the UK’s global economic competitiveness. This will help strike the right chord between the regulation-light approach of the Tories and Labour’s focus on consumer outcomes.

Overall, Tuesday’s announcement was an indication that with 2 years remaining of temporary equivalence, the government is keen to pursue closer alignment with Europe on financial services. How this will be received by the harder-line MPs within the Conservative Party will be one to keep an eye on going forward – but given that this is a position shared by Labour, it will provide welcome continuity for the markets and industry.

With the signing of this MOU and the Financial Services and Markets Bill about to become law, an important window of dialogue between regulators on both sides of the Channel is about to open up. There’s a long way to go before the long-term future of UK-EU financial services is decided, and it remains a critical time for industry to be engaged in the process.

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In conversation with Matthew Taylor — Chief Executive, NHS Confederation

This week, WA was delighted to host NHS Confederation Chief Executive Matthew Taylor. WA’s Head of Health Caroline Gordon led a discussion exploring Matthew’s perspective on how to tackle the big challenges facing the NHS, and how partners can work together to support the system.

Bringing decades of experience from both inside and outside government, Matthew expanded on his agenda-setting NHS Confed Expo speech which outlined five key ways to improve the UK’s health.

A few things we learnt:

Big change is possible, but it needs a big political vision

Matthew’s ambition for the UK to have a cross-cutting ‘health strategy’ – not just a set of policies for the NHS – is a hefty aspiration, particularly when government departments tend to work in vertical silos. Getting health policy into housing, criminal justice and levelling up policy is challenging.

But it can be achieved if the Prime Minister owns it from the centre, owns the mission, and insists on a cross-government structure that is focused on delivery. A clear vision is key.

Show the savings

The argument for investing in prevention and out of hospital care – often described as upstreaming – is well established and widely shared. However, persuading those holding the purse strings, whether centrally in the Treasury or locally in Trusts, is challenging. Too often ‘invest to save’ arguments are rejected, because in the past, new investment has not always led to the promised savings.

Two possible solutions: First: make the case by modelling the long-term savings. The NHS Confederation has been working hard to demonstrate the cost effectiveness and productivity benefits of investing in smarter healthcare. Second: know how the savings will be realised – ideally within a reasonable timeframe. Reassure the budget holder that you have real evidence that investment will pay off.

Integrated Care Systems (ICSs) – one year on

As the dust settles on the Hewitt Review, the emerging ICSs continue to evolve. There is significant variation in their size, approach, and progress (not necessarily a bad thing if we want to experiment with different models) and the system is learning together all the time.

It was recognised that it can be challenging for stakeholders to engage with the new structures, even when they want to share ideas that could help ICSs achieve their ambitions.

Some ideas for reaching new local decision makers:

The discussion was practical, realistic, and thought provoking, providing lots of new ideas for engagement with the NHS as it changes.

To find out more, or to discuss how WA can support your engagement with the NHS, please contact Caroline Gordon at carolinegordon@wacomms.co.uk.

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Mission Impossible? Labour’s plan to tackle health and social care

What’s the substance of Labour’s health mission?

Labour’s recent ‘health mission’ unveiling is their most comprehensive offering on health policy yet. Labour would look to shift care out of the hospital and into the community, placing more attention on preventing rather than treating ill health. They would look to modernise the NHS, embracing digital and technological innovation to improve efficiency in the NHS. Their proposals also focus on making the NHS a more attractive place to work, to improve recruitment, training, and retention. And, aligning with current priorities in the health service, Labour would commit to tackling three of the country’s biggest killers: cancer, heart disease and suicide.

On the surface, the health mission lacks depth. However, it landed well, securing positive headlines on this most politically salient of issues.

Beyond the headlines, WA’s engagement with senior figures in the Labour Party and across British politics are reassuring, suggesting that far more detailed policies are in development. Health system leaders we have spoken to are optimistic about the proposals they have been consulted on. We also know that there is more opportunity ahead: Starmer is willing to grant freedom to those he trusts on policy development, tasking them to ‘think bold’.

Are Labour’s health ambitions achievable?

Prioritising community care, prevention and tackling health inequalities over the delivery of acute and elective care aligns with what the NHS needs. But Labour might find it difficult to achieve if they triumph at the next General Election. Waiting lists are at an all-time high, ambulance services are under considerable pressure and the NHS is under extreme financial scrutiny.

The urgent demands on the health agenda may limit Labour’s ability to deliver radical improvements in the NHS. Despite the positive reception of their policy offer among health system leaders, Labour have already discovered how difficult it can be to take everyone with them when proposing more radical change; Wes Streeting’s early announcements on primary care reform generated significant pushback from doctors’ unions.

In this crucial period for manifesto shaping, Labour will need to balance Starmer’s call for bold thinking with solutions that are politically palatable. Labour will need to develop policy solutions that combine quick wins with long-term innovative thinking. Health stakeholders will need to share policy proposals that align with short and long-term ambitions and show awareness of the balancing act required from Labour.

Is Labour’s mission-led approach likely to succeed?

When New Labour revived a crisis-ridden NHS it was transformative. However, it took a considerable amount of time and relied on heavy investment; neither are a luxury available to Starmer in the current political and financial climate.

The scale of the challenge lying ahead of Labour means they won’t be able to fix the NHS in one electoral term. Solving the health and social care crisis isn’t all about money and if Labour wants to follow through on their mission-led approach to health policy, they will need to invest the right money in the right areas.

Despite the challenges ahead, Starmer is convinced that bold thinking is the key to successful and progressive policy development. Working in partnership and embracing innovation from all sectors could be pivotal in this approach.

More information about Labour’s policy-making process, the battlegrounds for business, and how organisations can get heard can be found in WA’s Guide to Engaging with the Labour Party.

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A life sciences package the Government hopes will take the sting out of VPAS

Today’s comprehensive life sciences package is a vote of confidence in a sector whose consistent real terms growth over the last decade is something the Government is keen to sustain. 

And it’s hardly a surprise – negotiations on the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) began just three weeks ago, following months of comment in the media about the rebate disincentivising research, and about the NHS needing to ensure value for money at a time of significant resource stretch.  

But are today’s measures sufficient, or are they just tokens to soften the difficult conversations around VPAS and medicines access? They include: 

Announcements have been cautiously welcomed as a means to deliver the UK’s ambition to be a science superpower. But Lord O’Shaughnessy himself has said that the proof of the pudding will be in the eating: rapid implementation will be key to driving maximum impact.  

And while these measures will help to address sector concerns about system delays and limitations to research routes, VPAS is still the big priority. These announcements won’t shift that focus. As the ABPI said in their quote for the Government’s press release: “Improving research is only one part of the equation. To get innovative medicines to patients and fully capture the growth opportunity, we must also fix the commercial environment”. 

Many of today’s announcements are also not new. The regulatory recognition routes were announced in the Spring Budget, as was a plan to expedite approvals of clinical trials. CTANs had been leaked to the media some weeks ago as ‘clinical trial pop-ups’. Reiterating these measures as part of a wider package of life sciences policies is designed not only to butter up the industry but also to position the Conservatives as the party of science and innovation with voters as eyes start to turn to next year’s election. 

How successful these measures will be in making the UK a life sciences superpower, and overcoming the system and regulatory barriers to investment, remains to be seen. But with Sir Keir Starmer stating in his speech to launch Labour’s health mission this week that “science and technology are game changers”, the Government can be sure that they won’t be the only ones trying to woo the life sciences sector. 

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What do the Bank of England, dog food and Percy Pigs have in common?

The answer is that they have all been in the news in the last few weeks thanks to a piece of external communications. You would be forgiven for missing these stories though as all too often we focus on ‘bad’ corporate communications, we forget what ‘good’ looks like.

As the following brands have reminded us, a proportionate or well-thought through comms strategy is the difference between making headlines for the right or wrong reason.

Marks and Spencer v Fabio’s Gelato

It’s a classic David and Goliath story.

When a Hertfordshire-based ice cream parlour decided to create a ‘Percy Pig ice cream’ decorated with the swinish sweets, Marks and Spencer quickly contacted the owner demanding the ice cream was renamed.

It would have been easy for the retailer to go in guns blazing with a cease and desist letter as many brands have done before – after all, they own the trademark for ‘Percy Pig’ and are legally entitled to protect it.

But M&S have clearly learned lessons from their public spat with Aldi on the discount retailer’s take on the infamous Colin the Caterpillar cake. The legal battle finally ended earlier this year with an out of court settlement but the issue remains a popular social media meme.

This time the high street retailer wrote to the ice cream parlour asking them to change the name in a letter that even its owner branded ‘polite and fair’. The light-hearted letter explained their reasoning, offered some alternative names and was even accompanied by some free Percy Pigs.

While this is an appropriate approach – after all, a local ice parlour is in a different league to one of their main competitors – this shift in tone is telling. And M&S have clearly demonstrated that free treats will always help sweeten the deal.

Sorry seems to be the hardest word

Earlier this month the Bank of England’s chief economist, Huw Pill, sparked headlines for his comments that people in the UK need to ‘accept’ they are worse off and stop trying to maintain their real spending power through higher wages or passing costs on to customers. Widespread backlash from small businesses, consumer groups and unions duly followed with his comments branded as ‘out of touch’ and ‘outrageous’.

He has now apologised for his comments, admitting he should have used ‘less inflammatory’ language and that in the future he will use ‘different words to describe the challenges we all face’.

While this apology does not change what he said, it shuts the story down and means the Bank of England can move on and regain its credibility as a leading voice in the finance sector.

Interestingly – and perhaps even intentionally – although Pill acknowledges he misspoke, his most recent comments double down on his original warning about the economic challenges the UK is facing.

The stark reality is that the Bank of England has a tough job ahead to settle the economy, but when it comes to such a sensitive issue as personal finances, words matter.

Pets before profit

“It may sound weird to be actively selling a product that we hope gets discontinued, but that’s part of our purpose… because we want to make a difference.”

So started a BBC interview with the marketing director for dog food business, Wilder Harrier. The Canadian firm’s ‘Sustainable Fish’ dried dog food is made from an invasive species of fish called silver carp, which has destroyed native fishing stocks in the USA’s Mississippi River.

By capturing silver carp to sell as dog food, the company is tackling what one Canadian province is calling ‘the most severe threat’ to their waters – while building strong brand loyalty with more than 10,000 bags sold to date.

Wilder Harrier’s approach to actively pursuing ‘a diminishing supply of [the product’s] main ingredient’ is refreshing, and a clear example of putting the natural world before profit.

In a communications world increasingly drowned out by greenwashing,  it is more important than ever before for brands to have a clear social purpose.

To find out more about how WA can support with ‘good’ corporate communications, contact Associate Director RachelFord@wacomms.co.uk

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Local elections tell a national story

Thursday’s local elections were the first clear and real sign of the political pendulum swinging back in Labour’s favour.

After months of doubts in the opposition that it was too good to be true, the results highlight the clear and real prospect of Labour returning to power. Meanwhile for the Conservatives, it paints a stark picture of the blue wall and red wall crumbling before them.

Local elections are the opportunity to check in with the electoral mood. They offer a partial, incomplete view of what could happen in a General Election, but one that points to a brutal ejection from office for the Conservatives.

Party faithfuls in both Labour and the Conservatives will point to the overall voting numbers as a sign it is still all to play for. The BBC national vote share projection put Labour at 35% to 26% for the Conservatives, a smaller gap than many national polls currently suggest. Whilst these headline numbers suggest a hung parliament, the results and mood paint a bleaker picture for Rishi Sunak’s party.

The Conservative coalition is crumbling

Beyond just losing the typical political bellwethers that signal who will lead the next government – for example, the Conservatives losing Swindon and Plymouth to Labour – Conservatives saw areas previously counted as safe seats for the party slip away. Losing Medway to Labour and Stratford-upon-Avon and Maidenhead to the Liberal Democrats is approaching a political catastrophe for the party.

Repeating these results in a year would leave the Conservatives with a shell of the parliamentary party they currently have. Even a minor improvement would not avert a painful loss for the government and it means they need a plan to respond to these damaging defeats.

Fighting on two fronts poses significant political challenges for the government when it is fast running out of time. With around 18 months until an election, it needs to find a blend of policies that can appeal to the shires and northern communities that made up its successful electoral coalition. This is a tall order and means it must find policies it can deliver now with minimum fuss.

Labour’s march to power continues

Meanwhile, Labour has passed its first major electoral test since becoming the front-runner to form the next government. With it will come even greater scrutiny on what it plans to do, and what will form the basis of its manifesto. Starmer and his team will take nothing for granted and will continue the approach that has built this lead. Newly controlled Labour Councils will offer the first glimpse of the party’s style and priorities, with the leader of the opposition taking a special interest in their policy programmes.

Labour will also have an eye on the other opposition parties following Thursday. They will be hoping the Liberal Democrat and Green gains reflect the electorate’s willingness to vote for the candidate best placed to dislodge Conservatives and therefore are swayed to vote Labour in 2024. Starmer and his team may look for ways to encourage this in the months ahead, and thereby avoid a significantly larger contingent of third party MPs that they may need to rely on in a hung parliament.

The national impact of local politics

For businesses, the local election is the restatement of the political expectation. Labour is on the march to power, with the Conservatives wounded and needing a significant change in fortunes to avert a big defeat.

As parties respond to the shattering of the red and blue walls for the Conservatives, businesses must be alive to the policy responses and political opportunities this has created. The competitive electoral map may be wider than at any point in recent memory and with it comes the prospect for new political issues and debates to come to the fore.

To discuss these issues and what it means for you, get in touch with us at jamie.capp@wacomms.co.uk.

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‘Stopping the 8am rush’ – Is the plan for recovering access to primary care an oversimplification?

The primary care access plan is finally here. A comprehensive plan to mull over but difficult to have a full view in the absence of the workforce plan. It is coined by DHSC as “the first step to address the access challenge ahead of longer-term reforms”, but this is not to undersell its transformative potential. Primary Care Networks (PCNs) are now fully focused on delivering this plan which spans the introduction of better phone and online systems, pharmacies supplying medicines for more conditions, and more staff and more appointments – anything else will be deprioritised.  

The plan has been widely praised as championing innovation. However, there is a feeling that the plan doesn’t duly assess the risks and benefits of what has been put forward and is perhaps an oversimplification from DHSC and NHSE.  

On a micro level, in this blog we explore the potential impact on access of changes to the role of pharmacy, the Investment and Impact Fund (IIF) and Quality and Outcomes Framework (QOF).  

Broadening the role of pharmacists presents both opportunities and risks

Pharmacy First has arguably elicited the strongest discourse and feelings both good and bad. Outwardly, a number of high-profile pharmacy leads are supportive of the initiative but there is cautiousness amongst the health sector. In conversation with David Thorne, Transformation Director at Well Up North PCN, he noted the following challenges:

1. Interoperability: It is vital that GP and pharmacy systems speak to each other, and we avoid the fragmentation that has bedevilled GP systems to date. Currently, robust systems are not in place to inform pharmacists of what medication someone is on to support their prescribing decisions ─ apart from placing faith in very early use of the NHS App. We need consistency and safe links, especially when looking to enable people to use a pharmacy distant from their GP practice.

2. Pharmacy closures:  In theory, the enhanced role of pharmacists could make primary care more accessible. However, data reports that pharmacy closures have disproportionally been in the most deprived areas of England ─ so there is a risk that positive changes to the role of pharmacists’ conflict with national priorities around health inequalities. One of the main drivers of the shortages of community pharmacists is the PCN recruitment of pharmacists to work in primary care roles.

3. Right Place, Right Role: Community Pharmacies may not be able to develop responsive clinical governance systems that adequately respond to case mix escalation, for example when superficially routine consultations escalate to issues of drug/alcohol misuse, mental health and safeguarding. How can we support pharmacists to develop the skill, time and governance systems to manage the types of conversations that GPs have?  Extensive training and public awareness will need to accompany these changes.

This is far from a done deal with negotiations on the £645 million supportive investment ongoing. Further, there will be a consultation on upholding patient safety considering greater prescribing powers for pharmacists.

Polling results conducted by WA communications in March 2023 of 1,000 members of the UK public highlight that whilst there is public support for a greater role for pharmacists, there is some way to go to building public awareness of the services pharmacists can provide.

A word of caution surrounding progressive changes to the IIF and QOF

Further details of the streamlining of IIF and QOF were announced within the plan. Redirecting £246 million of IIF funds represents a major shift with 30% to be awarded by ICBs (integrated care board), conditional on PCNs achieving agreed improvement in access and patient experience. DHSC/NHSE guidance is that access improvement plans should prioritise supporting those with the lowest patient satisfaction scores.

Local flexibility must be at the heart of the re-design of incentives, without arbitrary access quotas for certain groups such as ethnic minorities or LGBTQ+, which could lead to under-funding and deepening inequalities. It seems that DHSC/NHSE are cognisant of this, explaining that the plan is designed to move towards a “more equitable approach that will benefit all patients” and “does not call out specific cohort of patients” for that reason. This must be pulled through at an incentive level to ensure certain PCNs such as rural PCNs who may have small numbers of certain communities, are not caught out.

NHSE further announced that, through a consultation this summer, they will explore how to link QOF to key strategies such as the upcoming Major Conditions Strategy. Ultimately, ICBs new commissioning powers will mean ICBs very closely performance manage PCNs. This goes against the ‘neighbourhood’ aspect of integrated care reforms, which will only seek to become more complex as preventative care models are adopted.

As always, implementation will be the true test. The plan comes with no standardisation frameworks or action plans attached. This passes the buck to PCNs and/or ICBs to operationalise, which risks fragmentation in the absence of nationally led advice.

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The policy platform that will shape Labour’s manifesto

Last week, details of the Labour policy handbook that serves as the initial blueprint for the party’s next manifesto was circulated, ahead of the next meeting of Labour’s National Policy Forum (NPF).

The full summary of policy positions was revealed online by LabourList.

The policies included will be subject to scrutiny and debate by members involved in the NPF, with amendments able to be filed until June. The National Policy Forum will meet in July to discuss its contents ahead of the Labour Party Conference in October, where voting will take place on the programme presented. Following this, once the official timeline for the next General Election has been called, Labour will hold a Clause V meeting to decide which policies make it to the manifesto.

Further detail of this process can be seen in WA’s Guide to Engaging with the Labour Party:

Following months of accusations levied against Keir Starmer that his leadership lacks ideological rigour – and whilst it remains far from a completed manifesto – the leaked documents give us an idea of what the policy direction for the UK could look like under his stewardship. Labour have signalled that their next manifesto will ‘under-promise and over-deliver’.

As such, with vital discussions and developments in the policy-making process still to take place in the coming months, NEC members will be fighting for space on what Labour will choose to fight the next election on.

Businesses should follow the next few months of the policy development process closely in anticipation for party conference – a key milestone in the policy-making process, with the shadow cabinet told to present a credible alternative plan for government at the gathering.

Reaction from those involved at the ground level of Labour policy towards the leaked document has been generally positive, but there are still disagreements in the direction of some critical areas.

Below WA’s sector specialists have set out what the initial policy handbook means for each key policy area:

Energy

Energy is set to take a leading role in Labour’s offering at the next General Election, with the Policy Forum recommending ambitious targets on energy infrastructure, building to the ultimate goal of delivering clean electricity by 2030.

Specific targets include doubling onshore wind capacity, quadrupling offshore, and tripling that of solar. Given these technologies currently have around 14GW of installed capacity each, hitting these targets would involve commissioning over 20GW of wind and solar every year from 2024 to 2030, no mean feat, given the current speed of planning and Grid approvals.

In addition to renewables, there is strong support for nuclear and hydrogen, and a recognition that the likes of floating offshore wind, CCS and marine energy will require Government assistance in their developments.

As for the other side, it’s clear the forum doesn’t want to see any expansion in the use of fossil fuels, pushing for no more oil and gas licenses, maintaining the ban on fracking, and avoiding using coal, and no mention of biomass.

There is no clear message on decarbonising tougher sectors, such as energy-intensive industries or aviation, meaning there is still opportunity to influence in these areas.

Financial Services

The party has shown significant commitment to partnering with the financial services sector and protecting the UK’s reputation as a global financial leader. Central to this is its headline economic ambition to secure the highest growth in the G7, delivered through the Green Prosperity Plan and driven by inward investment aligned to the Paris-agreement targets.

They have also outlined plans to introduce long-term policies relating to consumer protection in emerging markets, including in the buy-now-pay-later sector which has been a bedrock issue for the party whilst in Opposition. Businesses should anticipate a review of regulatory barriers and potential risks.

Health & Life Sciences

Nothing in the proposals will come as a surprise for those following Labour’s core offering during the Starmer and Streeting administration. Detail is light and centred primarily around the issues that currently drive the debate in health: tackling the workforce crisis and cutting waiting lists.

Notably absent from the proposals is a focus on reducing health inequalities, despite both the Conservatives and numerous think tanks sympathetic to Labour correctly identifying it as one of the health challenges holding back growth across areas of the country. Critically for Labour, these inequalities are often most prevalent in areas they will need to win at the next General Election. Streeting is expected to set out Labour’s position on this in due course.

A strict focus on addressing only the major systemic health challenges is typical for a party in opposition, but Labour will at some point need to set out its plan to address the knottier challenges that require targeted action: cancer; obesity; the ageing population; and cardiovascular disease to name a few. This next phase of the manifesto development will look to examine these areas in more detail, and businesses should be alert and on-hand to offer potential solutions in these spaces.

Addressing these critical challenges will not be quick, and Labour’s success in delivering against its objectives will be measured in years, not months. As the manifesto develops, Labour must look to balance its top-level agenda for reform against ‘oven-ready’ wins early into their potential Governance to ensure they are seen to be progressing against their own objectives in the minds of an electorate increasingly losing faith in the health service.

Transport

As anticipated, Labour’s flagship transport policy is the renationalisation of rail. Labour intend to bring the railways back into public ownership as contracts with existing operators expire. The scale of ambition for rail does not stop there, with the document setting out intentions to deliver Northern Powerhouse Rail and High Speed 2 in full. This will be underpinned by a long-term strategy for rail that’s consistent with Labour’s fiscal panning and gives communities more of a say on their local rail services.

With GB Railways still in formative stages ahead of a potential Transport Bill in the King’s Speech and no guarantee of it completing its parliamentary stages before a general elations, there remains significant uncertainty and a range of potential outcomes for the rail sector. For commercial interests in the sector now is the time to carefully set out a vision for how they’d align with Labour’s agenda and rebuild trust in the network.

Devolved governments and local authorities can also expect more responsibility over what Labour calls “the broken bus system”. Communities will be granted powers to franchise local bus services, lifting the ban on municipal bus ownership. With franchising still in its infancy in the northern metro areas, the next few years will be essential to assess how local control is working and define a model that will work in rural, semi-rural and other non-metro areas.

In addition to public transport, Labour are also seeking to turbocharge the just transition to more affordable EVs by helping households to manage the higher upfront cost of vehicles. To ensure EV infrastructure is able to keep up pace, Labour are planning a programme of electrification, including accelerating the rollout of charging points in left behind areas. A package of incentives may well be needed to help address an emerging challenge around access inequality.

Childcare, Education & Skills

Shadow Education Secretary Bridget Phillipson is determined to ensure that education is at the heart of Labour’s programme for Government, as it was when the party last came to power in 1997.

Labour recognise that one of the most significant challenges facing the country today is the need to rebuild the economy and ensure that workers have the right skills required to support the jobs of the future. This cuts across different departments and policy areas, but remains a core ambition of the Shadow Education Team, who want to deliver a “landmark shift in skills provision”.

Where Labour differ from the Government in this regard, they have linked future skills needs closely to their ambitions for the green agenda, they want to devolve adult education and skills budgets to metro mayors and combined authorities, and they want to give businesses more flexibility to use skills funding to meet specific employer needs.

Another key priority of Labour’s is to reform childcare, right from the end of parental leave to the end of primary school. These plans are still light on detail – perhaps because of the need to work around the announcements made by the Government in March’s Budget, and perhaps because of the funding implications required to meet their ambitions for a so-called ‘childcare revolution’.

Looking ahead, Keir Starmer is set to launch his opportunities mission ahead of the summer recess in July – we look forward to seeing the detail then.

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The next phase of Open Banking?

Fin Tech week 2023 has kicked off with HM Treasury’s long-awaited recommendations for the next phase of Open Banking in the UK.

With 29 actions over the next two years, this is a clear roadmap for the Joint Regulation Oversight Committee (JROC) to deliver and progress is undoubtedly being made. Amongst the measures, the report sets out plans to:

More detail on the future entity for Open Banking and the transition of the OBIE is also expected shortly, as well as plans to create a smart data scheme under Part 3 of the Data Protection and Digital Identity (DPDI) Bill.

However, there are still questions over digital identity, use of smart data, and the transition to Open Finance. Further clarity is needed for industry to press ahead with investment, innovation and expansion to ensure the UK remains a leader in open banking.

So how can businesses and organisations in the sector shape what comes next? The WA financial services team shares their advice on what the sector should do.

1. Input is still needed on where barriers to progress exist

The JROC report sets out Treasury’s blueprint for how open banking can be pushed further and reach an increasing number of users.  As part of their vision JROC are looking for sector input so they can better understand what is needed to ensure the sector prospers.

This is an opportunity for businesses to:

2. UK consumers still need clarity on what Open Banking means for them

Whilst Government and industry alike has heralded the success of Open Banking implementation in the UK, there is still work to be done with consumers to educate them on what it means for them.  Our research – conducted in January 2022 – shows that only 41% of consumer have heard of open banking, and of those only 36% could explain what it does.

Businesses need to:

3. MPs and policy makers want to build their understanding

With the Retained EU Law Bill radically changing the way policy and regulation is made post-Brexit, There is a clear gap for businesses and industry bodies to shape MP understanding of Open Banking functionality and how it is implemented.

When businesses think about engaging MPs, our survey from earlier this year shows that:

In June, WA will be joined by experts from across the sector to discuss the future of Open Banking and Open Finance in more detail, with fresh insights and advice on how businesses and industry can shape long-term thinking in the space.

To find out more, or to register to attend the event, contact WA Director Natasha Egan-Sjodin at natashaegan-sjodin@wacomms.co.uk

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In Conversation with Toby Perkins MP – Unlocking opportunities to ‘earn while you learn’

Last week, WA Communications hosted a roundtable with Toby Perkins MP, Shadow Minister for Further Education and Skills, to discuss Labour’s approach to skills and lifelong learning, with a particular focus on the party’s views on degree apprenticeships. Bringing together key players within the HE, apprenticeships, and skills sectors, the discussion highlighted the potential of degree apprenticeships​ for learners, industry, and the economy.  

Perkins shed light on Labour’s current thinking around the skills agenda, confirming the party’s support for degree apprenticeships, advocating for FE and HE to “work hand in hand”, and calling for more investment in skills. However, he also stressed that spending the current levy funding should be the priority. 

At the event, WA Associate Director, Lorna Jane Russell previewed WA’s latest education research report on degree apprenticeships, presenting the findings from original consumer polling and setting out the challenges – and potential solutions – to expanding these qualifications throughout the UK. We will launch these publicly next week. 

Key Insights from the Roundtable:  

1. Degree apprenticeships have the potential to be a valuable opportunity for policy in lifelong learning, especially in the context of increasing education costs and the skills shortage. However, they are still not widely available, and there is a lack of awareness about them among the public. There is also a perception gap about the prestige of degree apprenticeships, which may deter potential applicants. 

2. To increase access and participation in degree apprenticeships, there is a need for new models that can widen participation and increase access to industry placements, especially for disadvantaged students who are currently underrepresented within the sector. This should be coupled with initiatives to support young learners in making the transition from school into work, including greater support throughout the qualification.  

3. The government has adopted an employer-led approach to degree apprenticeships, which means less investment and fewer opportunities for students. This approach may also limit the development of new models that prioritise access and participation, rather than just meeting the needs of employers.  

4. Universities and skills providers alike want to see more flexibility and fewer regulatory burdens in order to widen their degree apprenticeship offerings. Employer investment in skills is also down, and the apprenticeship levy needs reforming to be more flexible and help SMEs attract apprentices.  

5. Finally, there is also a need for investment in upskilling the existing workforce to deliver future jobs in decarbonisation and technology. Degree apprenticeships could play a role in this upskilling effort by providing a pathway for workers to gain new skills while also earning a degree and gaining work experience. 

 So, what’s the upshot for the skills sector?  

The cross-party consensus about the need to invest in skills training and degree apprenticeships favours skills providers, though universities that work with employers to offer degree apprenticeship qualifications will benefit. 

Labour’s promise of flexibility in their approach to the apprenticeship levy presents significant opportunities for skills providers to expand their degree apprenticeship offerings, and for universities to access a new funding stream. 

However, higher education could lose out to FE and apprenticeship providers in post-18 education reforms, so they will need to demonstrate how they can work alongside skills providers and local FE colleges to play a critical role in delivering on the reskilling agenda. 

While for policymakers, degree apprenticeships have the potential to be a valuable opportunity for lifelong learning and addressing the skills shortage, more needs to be done to increase access and participation, support new models, and revise funding and regulatory frameworks to support students to ‘earn while they learn’.  

 

If you have any questions or are interested in learning more about WA’s education team, please contact Lorna Jane Russell, WA Communications, at lornarussell@wacomms.co.uk

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IVF – what to expect when you’re expecting returns

A recent World Health Organisation report finds that about one in six people worldwide experiences infertility. Unsurprising, then, that this year would-be parents around the world will spend an estimated £12.8bn on fertility treatments, a figure growing at an annual rate of 10.3%. The UK IVF market – valued at around £420 million in 2018 – is expected to reach £760 million by 2026.

WHO officials highlight that IVF remains “underfunded and inaccessible to many due to high costs, social stigma and limited availability”. In the UK, IVF is provided through a mix of NHS and private services, and regulated through the Human Fertilisation and Embryology Act, passed in 1990. The Act has been updated only once, in 2008, despite the sector having witnessed scientific breakthroughs and an accompanying shift in public perception in the time since. Both factors have contributed to a significant growth in demand. As attitudes and access to IVF have evolved, sector stakeholders have started to highlight issues: regional variations in NHS funding, poor regulation of treatment ‘add-ons’ and perceived profiteering.

Although the National Institute for Health and Care Excellence (NICE) recommends three cycles of IVF for women under 40, some Integrated Care Boards offer only one cycle, or only offer NHS-funded IVF in exceptional circumstances. In the absence of national standardisation, and at a time of squeezed public sector budgets, the recent years have seen a steady decline in the number of IVF cycles funded by the NHS. Data shows that NHS-funded cycles in England fell from 40% in 2014 to 32% in 2019. In Wales, they fell from 42% to 39% over the same period, and in Northern Ireland they fell from 50% to 34%. Scotland is the only devolved nation to have seen an increase in the proportion of IVF cycles funded by the NHS, up from 58% to 62%.

Reflecting these developments, IVF has attracted media and political interest, with MPs from across the political spectrum becoming more vocal about the issues in the sector.

Launched in Summer 2022, the Government’s Women’s Health Strategy acknowledged the need for action and announced NICE would be updating its guidelines on fertility, with changes expected to be published in November 2024. The strategy removed the requirements for same-sex female couples to self-fund fertility treatment before becoming eligible for NHS-funded care and committed to exploring the possibility of publishing data nationally on IVF provision and availability. Several Labour MPs, including senior Shadow Cabinet members, have criticised the strategy for failing to get to the heart of the problem, claiming that increased transparency around available funding doesn’t do anything in improving provision or tackling the postcode lottery for fertility services.

According to HFEA, in 2019 the average birth rate per embryo transferred (IVF attempt success rate) was 24%. It comes as no shock that would-be parents have increasingly been opting for add-on treatments in hopes of improving their chances of conception. Add-on procedures are optional extras that are offered by clinics on top of normal fertility treatments. There is currently little direct evidence that add-ons, which can add up to £2,500 to the cost of each attempt, improve the chances of success. In the absence of available evidence, and the growth in demand for add-ons, in June 2021 the Competition and Markets Authority issued guidance for fertility clinics to ensure they don’t mis-sell add on treatments. Still, HFEA’s 2022 National Patient Survey found only 46% of people who used add-on treatments felt their clinic has clearly explained how likely the add-on was to increase their chance of conceiving. This debate is part of the reason why HFEA has been calling for reforms to the Human Fertilisation and Embryology Act for years.

It was only earlier this year that the Government asked the independent fertility regulator to submit reform recommendations for consideration. Now HFEA is seeking additional powers to enforce standards, including the ability to introduce economic sanctions on non-compliant providers. The lack of control over fertility treatment add-ons by HFEA have enhanced the criticism of the poor regulation and fuelled the ‘profiteering’ debate.

Given the mounting scrutiny, increasing size of the sector and the fact that the Women’s Health Strategy had already set out that government would consider changes to regulatory powers to cover fertility treatment ‘add-ons’, it is likely HFEA’s recommendations will be accepted. Even if parliamentary time is squeezed, and the Government doesn’t make progress ahead of a General Election expected in late 2024, women’s health will be high on Labour’s agenda should it form the next government.

Labour MPs have been vocal on a number of women’s health issues, with menopause awareness in the workplace being the most recent example. And with the Shadow Secretary of State for Women and Equalities, Anneliese Dodds, calling for a “national conversation” on women’s health and wellbeing, it is safe to assume Labour would take a more interventionist approach in government.

With 3.5 million people struggling to conceive in the UK, and the proportion of IVF cycles provided by the NHS steadily declining, private provision of IVF remains a growth industry. Considering the WHO’s recent findings and calls for better policies and public financing, the regulatory landscape is likely to tighten, so those looking to invest in the sector will need to keep an eye on both regulatory reform and updates to NICE fertility guidelines. The policy agenda of a potential Labour government, which is more likely to scrutinise profit-making delivery models in the health space, should also be a key consideration.

However, tighter regulation needn’t be discouraging, especially if it is followed up with better public financing. As we have seen in other sectors, if done well it is likely to build confidence and present growth opportunities for high quality providers committed to doing their best for patients. And that should motivate investors to drive the innovation that will deliver better outcomes for patients – and reward all expecting stakeholders in the long run.

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The Hewitt Review unpacked

In July 2022, Integrated Care Systems (ICSs) were formally established with the intention of delivering joined-up services along a place-based approach, improve outcomes in population health and tackle health inequalities across the country. 

Yet, just six months into their formation, Chancellor Jeremy Hunt announced a review to be undertaken by Patricia Hewitt, former Secretary of State for Health and current chair of Norfolk and Waveney Integrated Care Board.  

The review sought to consider the oversight and governance of ICSs, examining the balance between greater autonomy and accountability for these emerging structures.  

Hewitt’s paper, published yesterday, reiterates the significant potential of the new NHS structures to deliver more strategic and sustainable healthcare – albeit with refinements. However, with a muted response from the DHSC and NHS England on timelines for responding to the review’s findings, there are questions over whether core recommendations will be taken onboard with any sense of urgency. 

What stood out? 

Prevention and population health 

The review reiterates the big opportunity of prevention and proactive population health as key to sustainable solutions to immediate performance pressures in the NHS. This is a well-trodden message – but one that continues to be easier to write about than deliver.  

To address this gap, Hewitt argues for a change in how the health and care system operates. This includes a shift in resources, to which she recommends a 1% increase in the NHS budgets going towards prevention. She also calls for a Government-led national mission on health improvement, with prevention, the reduction of health inequalities and the social determinants of health as musts, rather than ‘nice to haves.’ 

This sentiment is in keeping with other recent policy reports on prevention and early intervention, such as the recent Health and Social Care Committee inquiry into prevention which received over 600 stakeholder responses.  

Largely missing was any focus on industry partnership beyond high level commentary on evolving pathways and vendor management. This suggests that treatments are still not seen as a key part of the approach towards better population health.  

The potential of delivering on placed-based priority and need 

A big theme in the review is the need for a shift from a top-down, centralised system of managing the NHS to a bottom-up system, responsive and responsible to local communities.  

To facilitate this, Hewitt recommends a reduction in national targets with no more than 10 national priorities and the development of ‘High Accountability and Responsibility Partnerships’ (HARPs). These are additional mechanisms aimed at incentivising integration across all partners of a local system.  

However, integration and true place-based care cannot be fully achieved without local government and social care involvement. This has already been somewhat muted with the decision to create two local bodies – healthcare-led Integrated Care Boards and wider community involvement through the Integrated Care Partnerships. And there is an irony that on the same day as Hewitt review was published calling for better integration of health and social care, a £250m of budget committed to support social care innovation and training was withdrawn. Without a genuine joined-up approach, the opportunity for integration is unlikely to be truly realised.  

Decisions on accountability and governance  

Fundamentally, the review was commissioned to consider the oversight and governance of ICSs. However, it is not immediately clear whether this question has been answered and the critical question of whether ICBs or NHS England manages Trusts has been fudged.  

The review recommends that any intervention from NHS England direct to Trusts should come through the ICB structures. However, it then peddles back on that ambition by stating that it needs to be proportionate to the strength of the relationships, leadership and challenges facing a local system. 

Therefore, there is still considerable room for NHS England to be involved in the performance of local care providers. This takes away from the intended freedoms and flexibility at the forefront of the ICS model. 

Better funding flows 

The review does not call for any additional funding for NHS services but rather scratches beneath the surface to offer a remedy for how operationally government spending on health can achieve value for money.  

Hewitt identifies “over-complex, uncoordinated funding systems” as an impediment to achieving this principle. She calls for ICS funding to “be largely multi-year and recurrent” and for budgets across health and local government to be better aligned.  

Greater financial autonomy as well as simplified and coordinated funding behind ICSs has been welcomed as a recommendation. However, the varying degree of maturity of ICSs across the country, as recognised in the review, risks investors needing to adopt a more cumbersome and tailored approach depending on the ICS. 

What’s next? 

As yet, next steps remain unclear. The Government will respond to the central recommendations, but not immediately. Clarity around responsibility and accountability between NHS bodies may take more time. Many other key points may be chalked up as ‘requiring further consideration’. 

Jeremy Hunt – who commissioned the review – retains his interest in health improvement and is keen to drive better outcomes and efficiencies for patients and the public purse. How far he is prepared to loosen the grip on NHS budgets remains to be seen.  

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Powering up?

Yesterday’s Powering Up Britain announcement had been trailed as a gamechanger for the country’s energy transition: the UK’s response to IRA in the battle for green investment. But to what extent does it shift the dial on the government’s priorities and give confidence to investors? WA’s energy team reflects on what it means and looks ahead to what’s coming next.

1. Yesterday’s announcements mark an important albeit incremental drive to ‘power up Britain’

Much of the commentary following yesterday’s package has focused on the relatively limited nature of the announcements: there was very little in the way of new funding announced, many policies from existing strategies and publications repurposed, significant reforms that are urgently needed – for example on planning reform for onshore wind – pushed into the future, and the number of specific projects backed on the low scale of expectations.

All this is true, but the fact that ‘Powering up Britain’ was neither radical or fast enough to meet key national ambitions, doesn’t mean it’s not welcome or important. Industry repeatedly calls for a renewed focus on ‘delivery’, with key targets and objectives already agreed. Yesterday’s announcement represents movement on ‘delivery’ – the hard policy grind that is necessary to move progress to targets forward.

Upcoming announcements on grid connections and onshore wind will also be critical to increase the pace of renewables deployment.

2. Picking winners (and losers)

Governments – particularly this one – dislike being seen to be ‘picking winners’ and choosing which businesses thrive. However, it’s a core theme of yesterday’s package, particularly picking the early leaders within technologies. Yesterday showed that government is committed to backing a broad range of technologies – as the Energy Minister Andrew Bowie reiterated at a dinner hosted by WA earlier this week. However, not every project within those technology types will progress – there will be winners and losers.

Across different sectors – from new nuclear to CCUS and hydrogen – government is using competitions between projects and firms to identify which they will back. This isn’t new – in effect this has happened with the CfD regime within renewables for some time – but it’s now been embedded across the sector. This very starkly exposes that within the UK energy market, project developers and investors are dependent on government permission and support to progress. There are clear commercial consequences – the impact on the share price of both the winners and losers of CCUS and hydrogen competitions yesterday neatly demonstrates this.

One critical consequence of this is that it makes it even more essential for those wishing to progress projects to make a strong case for their individual investment and to be able to differentiate it from competitors. As well as having a strong technical case, this means telling a story. How will this specific project or technology tangibly improve the local community by delivering economic growth jobs and a strong supply chain? How will it meet the government’s ambition for low cost, homegrown power more effectively than other solutions? Do you have influential champions for your project? It’s no coincidence that Teesside was a big winner on CCUS and hydrogen yesterday, with a Mayor in Ben Houchen who has made this a priority. In an election year, showing the political ‘win’ as well as technical competence is critical.

3. Home decarbonisation is the piece of the puzzle policymakers still struggle to solve

The one part of the decarbonisation challenge that arguably lost out yesterday was home decarbonisation and domestic heat. It’s a problem that successive policymakers have struggled to grapple with, but the measures announced yesterday will not yet do enough to fundamentally address the scale of the problem.

Take the government’s announcement on the establishment of a Great British Insulation Scheme. The 300,000 homes this will focus on are just a drop in the ocean of the number that need to be improved. Unlikely power decarbonisation, addressing this is much more piecemeal and requires significant consumer engagement and behavioural change.

The second big challenge is the choice of technology to heat those homes. This is one area where the government is – perhaps understandably – less keen to pick winners, worried about the political consequences of mandating higher cost solutions that will require significant disruption to consumers.

However, yesterday’s announcement conceivably gave the biggest steer yet that the government is leaning towards electrification over hydrogen as the primary solution for homes (albeit ultimately there will need to be a mix of technologies) with an extension to the Boiler Upgrade Scheme and a vision that in the future, “people’s homes will be heated by British electricity, not imported gas”.

4. Bigger things to come?

This package of announcements is important, but not enough. It is a critical step in providing clarity on the competitions, policy frameworks and future schemes required to encourage external investment but it won’t be a gamechanger.

Industry will be looking ahead to see what’s beyond this that might fundamentally shift the dial, and there’s two things to consider:

Greater financial firepower at the Autumn Statement?

The Chancellor has promised that the government’s full response to IRA will come in the Autumn, arguing that it will be ‘different – and better’. Those looking for a game changing moment – matching the simplicity the IRA mechanism – have the next six months to make the case for what this looks like.

While we’re currently in a fiscally constrained environment, the government has signalled that it will turn the spending and tax cutting taps on ahead of the next election. The argument needs to be made – partly through Lord Harrington’s review into foreign investment – as to how deploying it to support the green transition will give the government the greatest political impact. However, the delay in getting this full response to IRA and the Chancellor’s insistence that the UK isn’t about to enter a subsidy race, should constrain confidence amongst the industry.

A future Labour government?

In stark contrast to the incrementalism of this government, is the radicalism of Labour’s plans on energy. In his speech earlier this week, Ed Miliband highlighted the differing approach a Labour government would take – more ambitious targets, greater public spending (£28bn in borrowing per year and a new national wealth fund),and a much more muscular and interventionist role for the state (including a public sector energy company, Great British Energy). The ambition and pace can’t be doubted, but there remain questions over the deliverability and the solidity of this level of public spending in a challenging financial context.

WA’s upcoming report into Labour’s energy plans will delve much deeper into this, looking at the outstanding questions that remain.

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Scottish National Priority: how the SNP leadership contest could shape the NHS

This SNP leadership election will, for the first time in almost a decade put a new face at the forefront of Scottish politics.

While independence is unsurprisingly at the top of the agenda for the candidates, healthcare is a key battleground: a recent Ipsos poll found the NHS is the issue of greatest concern for Scottish voters.

Scotland is facing a healthcare crisis. The gap in life expectancy between the least and most deprived areas now stands at 13.3 years for men and 9.8 years for women, A&E waiting times are increasing, and the Government is set to miss key targets this year in NHS recruitment and tackling elective waiting lists.

How do the leadership candidates plan to address the healthcare crisis?

Humza Yousaf

With almost two years of health and social care experience under his belt, Humza Yousaf expectedly has the most developed set of healthcare policy goals, stating that he will make the NHS a priority as First Minister. As such, his ability to follow through on campaign commitments will be closely scrutinised if he is selected at the end of March.

Kate Forbes

Kate Forbes has also leant on her experience as Finance Secretary for the policy basis of her campaign.

Uniting both Forbes and Yousaf is their commitment to delivering the controversial National Care Service, an NHS-style centrally managed care service pitched as a solution to social care. Scottish Labour has framed the plans as a ‘power grab’ from local authorities; however, given the state of the social care sector across the rest of the UK, the SNP’s ‘top two’ are eager to promote Scotland’s solution.

Ash Regan

Despite being the clear underdog in the contest, the third and final leadership candidate, Ash Regan, proposes solutions that demonstrate the political breadth of the SNP.

While Ash Regan is unlikely to triumph in the contest, she represents the scale of the challenge that Kate Forbes or Humza Yousaf will have in uniting the Party to tackle the issue of greatest concern to Scottish voters, and the broad spectrum of policy ideas that lie within it.

Regardless of who is voted in as Party leader, the Health and Social Care in-tray will be busier than every other department. Before the next General Election, the incoming First Minister, and their new Health and Social Care Minister will need to drive significant improvements in healthcare if they want to have any chance of matching the flawless electoral performance of their predecessor.

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E-scooters at a crossroads

E-scooter manufacturers, providers, schemes and riders have been left waiting for certainty on their future.  

After last year’s Queen’s Speech, Ministers confirmed their intention to legislate on e-scooters, moving beyond the time bound and limited role e-scooters currently have. Two Prime Ministers and 3 Transport Ministers later, the future of e-scooters is back up in the air.  

The Transport Bill – that would have been the vehicle for legalisation and legislation – has been a casualty of upheaval at the heart of government. Now Ministers and officials are left having to bid for parliamentary time again, with even fiercer competition for time in the last King’s Speech of this government before an election.  

Despite the transformational role e-scooters could play for travel, particularly in urban areas, there is a risk that new decision makers have lost track of e-scooters’ congestion busting, cost saving and carbon cutting benefits. The Ministers, advisers and champions that secured the announcement from government have moved on, and the new crop have yet to make a full throated endorsement.  

In the face of this challenge, WA’s latest transport temperature check polled public attitudes to e-scooters to analyse the challenges in the road ahead.  

Whilst there is still a route to legalisation and legislation, we have found that more of the public is opposed to e-scooter legislation. It means advocates start on the back foot, and need to both convince the sizeable number of ‘don’t knows’ (one in four people) and address the concerns of opponents. Safety risks to other road and footway users is the most commonly cited reason for opposing legalisation, driven by persistent coverage of dangerous incidents.   

If these and other concerns are not addressed, the case for legalisation will diminish. Ministers, advisers and officials will either be unwilling or unsuccessful in their bids for time to act in the King’s Speech later this year, with Number 10 instead deciding to focus on less controversial and easier to deliver policies. 

In turn, Labour has been able to stay largely silent on the e-scooter debate. There is a narrow window to ensure Labour’s transport team prioritises e-scooters, to keep pressure on the government now and ensure it does not drop off the agenda completely should they win. 

The next 6 months are critical if the industry wants to escape the legal limbo it is in. Only by delivering a gear change in engagement can the industry secure its long term future and make sure that the key political decision makers in both the Conservatives and Labour understand the benefits e-scooters will deliver for their agendas.  

Doing so will help build a new consensus on the future of e-scooters, but missing this opportunity means the wheels could fall off completely.

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Budget Analysis with Jim Pickard and Kitty Ussher

On Thursday 16th March, WA Communications hosted Jim Pickard, Deputy Political Editor of the Financial Times, and Kitty Ussher, Chief Economist at the Institute of Directors and former Treasury Minister, to discuss what the Budget means for businesses and the big unanswered political questions following Chancellor Jeremy Hunt’s statement.

Chaired by WA’s Head of Public Affairs Marc Woolfson, the panel discussed the revised economic forecasts, Hunt’s focus on supply side policy, the upcoming challenges for the government, and policy areas that did not attract significant attention in the Budget.

Our panel outlined five key takeaways during the session:

To learn more about what the Budget means for you and other takeaways from the Chancellor’s Statement, get in touch with WA’s team to see how we can work together.

WA regularly host high-profile political figures and leading journalists to explore the intersection between politics, the media, and business – our recent event speakers include Rachel Reeves, Shadow Chancellor of the Exchequer; Chris Giles, FT Economics Editor; and Katy Balls, Political Editor at The Spectator. 

To be the first to hear about our upcoming events, follow us on LinkedIn or email events.rsvp@wacomms.co.uk.  

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Will the ‘Back to Work’ Budget work?

Sunak and Hunt are emerging from a bruising few months.

The cost of living crisis, questions about the fiscal competence of the Conservatives, and languishing poll ratings meant the duo face a political and economic mountain to regain momentum ahead of an election.

Today’s Budget therefore had to serve two purposes. It needed to continue the government’s response to the immediate economic and financial challenges facing businesses and households. It also had to offer a plan for the future, responding to Labour’s recent polling dominance.

Hunt responded to this challenge with a lengthy statement, which put meat on the bones of the Prime Minister’s five priorities and set out a direction for how the government plans to grow the economy.

Here are our key takeaways from Hunt’s Budget:

Economic growth is the central mission of the government

The more positive fiscal outlook – driven by falling energy costs and wider economic changes – has given Hunt more headroom to act. He used it to focus on supporting businesses and driving economic growth, which has become the defining mission of the government.

He will seek to achieve this by supporting businesses that invest through the capital expensing policy, further support for life sciences and creative industries and even producing a ‘Quantum Strategy’. It reflects a more targeted, transactional approach to this government’s relationship with business and prioritisation of high potential and high growth sectors. For those that invest, or have a plan to do so, this government wants to help those plans come to fruition.

The programme for growth can only be delivered with business help

The flip side of this Budget is a reflection that the government has limited resources, time and money to make big things happen. Governments of the recent past would highlight big infrastructure programmes to drive growth and support the economy. Even Hunt highlighted these types of policies in his last statement.

This Budget strikes a different tone. Through a mixture of tax changes and funds, government wants businesses to work closely with central and local government to deliver its priorities. The new Investment Zones are the clearest example of this, with government wanting combined authorities, universities and businesses to work together to drive regional transformation. It means that whilst the Government has set an overall direction, it is now looking to others to fill in the detail and help make its plans a reality.

Stealing a march on Labour

Labour has been on the front foot, with Starmer’s national missions defining the early battleground for the General Election campaign. Hunt’s statement began the Conservative Party’s fightback, stealing his headline childcare policy from Labour. By capitalising on Labour hesitancy to release specific details, the government has now taken the initiative in this debate.

Questions on the pace, scale and ambition of the policy are likely to follow in the days and weeks ahead, but the biggest impact could be on Labour. This episode is a lesson for Starmer and his Shadow Cabinet. By not fleshing out their platform, they are now at risk of a significant ‘love bombing’ operation from Sunak and Hunt. For businesses and public affairs professionals, it means Labour may accelerate its policy development and programme of big announcements.

The election starting pistol has been fired

This budget will focus minds in the Government and Opposition. Hunt focused his statement on the audiences that could provide a route to retaining power. More money for red wall constituencies, support for older voters and backing for businesses that could help fill the party’s coffers set itself up for the coming battle.

Meanwhile Labour faces a wake-up call that the road to power will not be straightforward and that there is still fight left in the Conservatives. A mixture of targeted funding, retrenchment of core messages on the value of work and businesses and the assault on Labour’s programme is the clearest demonstration of how the Conservatives plan on rebuilding their political momentum.

Sunak and Hunt will hope this Budget is the beginning of a long road back from the dismal poll ratings they face, and for Labour marks the first stern challenge they have faced since taking a commanding lead. The reaction to the Budget will define whether this is a turning point, or another nail in the coffin of the Conservatives.

To find out how the Budget is landing, and what it means for businesses, you can join our Budget analysis webinar by signing up here.

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Spring Budget: warm words, limited progress for the life sciences industry

It is no surprise that the Chancellor called out the importance of the life sciences industry to the UK in today’s Spring Budget. Intensive industry engagement over recent months made its inclusion as a critical industry inevitable.

During his lengthy speech, he gave a few positive signals on the Government’s intent to boost the sector. He went out of his way to praise industry, particularly for its role during the pandemic, before making two new headline announcements.

First, Hunt announced an enhanced tax credit scheme for small and medium sized R&D businesses.

20,000 companies will receive £27 for every £100 they spend. This has already been celebrated by the UK BioIndustry Association (BIA), and is clear recognition of the need to do more to support biotech companies to develop breakthrough treatments in the UK.

Second, he announced new reforms to regulatory approvals in an attempt to speed up access to innovative treatments.

From 2024, the Medicines and Healthcare products Regulatory Agency (MHRA) will allow for fast-track approval of medicines and technologies already approved by trusted international regulators, such as the US, Europe and Japan.

The intention is to support companies to bring innovative treatments to patients faster, while encouraging further investment and priority launches in the UK.

This announcement comes as industry has become increasingly vocal over their concerns that the UK is losing ground as a launch market. In 2023 alone, AstraZeneca cited a sub-optimal business climate as the main reason for building a new $400m plant in Ireland, instead of the UK, and AbbVie and Eli Lilly exited the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS).

This pressure has clearly cut-through, and industry should be pleased their voice is being heard.

But, will this new MHRA process actually make the difference the Government hopes and change the direction of travel? Potentially not.

As heralded by Hunt in his speech, the MHRA was the first in the world to approve a vaccine for COVID-19. The regulator is already efficient and new schemes to speed up regulatory approval, such as Project Orbis and the Innovative Licensing and Access Pathway (ILAP), are already in place.

The biggest barrier to providing swift access to innovative treatments is NICE’s capacity to swiftly appraise the increasing volume of company submissions, and the subsequent potential for protracted negotiations with NHS England. Quicker licensing will do nothing if the resource and full system alignment are not in place.

There are also questions around how the process will be implemented. It could easily become a perverse incentive, with companies prioritising regulators with more appealing launch markets, such as the FDA, in the knowledge that the MHRA will fall in behind any license anyway.

It would also be naïve to view any announcement of this kind outside of challenging VPAS negotiations, kicking off in earnest this month as the ABPI set out their proposal of a 6.88% fixed rebate rate, which was swiftly, and strongly rebuffed by both the Department of Health and Social Care and NHS England. Ultimately, companies remain deeply concerned about the attractiveness of the UK.

Labour could steal a march if they take a bolder, whole medicines pathway approach to access. Because while it is a good sign that the Government still acknowledges the critical importance of the life sciences sector, whether the bigger issues are addressed any time soon remains to be seen.

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How not to do crisis comms: a Beeb masterclass

‘No-one mishandles a crisis quite like the BBC’ – so said one anonymous source in yesterday’s Sunday Times. This comes as a Tweet from the W1’s best-paid presenter, denouncing Government immigration policy, left the Corporation floundering amid its biggest communications crisis of the year so far.

The BBC has been suffering from a well-documented ‘brain drain’ for several months, losing top billers Emily Maitliss, Jon Sopel and Louise Minchin to private rivals – leaving an unsettled company culture it its wake. This perhaps explains why a scandal of this magnitude was a long time coming, playing as it did, into both the culture wars, and the BBC’s own wavering sense of identity.

The first mistake made by the corporation was to overlook the core pillar of any crisis communication plan – preparation. The BBC Comms team should have recognised that with an employee base made up of high-profile, prolific Twitter users, a social media storm was always at the top of the risk register. As Lineker’s Tweet started to send shockwaves through the media, a pre-agreed protocol and dedicated crisis team should have leapt into action, rolling-out a well-rehearsed damage limitation exercise. As it happened, the BBC’s response was both agonisingly slow, and lacking any real clarity. With the Tweet published on Tuesday afternoon, it took until Friday for an official BBC decision on Lineker’s position to be communicated. At this point the statement released was that Lineker had ‘decided he would step back,’ teeing up the inevitable: Lineker himself making it clear the decision was not mutual.

Far from defusing the situation, this confused response further exacerbated it, detonating the long-ticking time bomb of dissatisfaction at Broadcasting House.

If the BBC’s failure to act quickly and decisively was its first failing, its second was underestimating the mutiny brewing amid its own staff. As Lineker’s colleagues fell behind him, refusing to appear on-air out of solidarity with the former striker, the story inevitably snowballed – rapidly becoming an internal comms issue as much as an external one. An apologetic email to staff from Director General Tim Davie seemed to do little to extinguish the revolutionary flames, with ‘senior reporters’ briefing against the Corporation and staff chats leaked to the Sunday papers.

All of this points to the importance of including internal comms as well as external in any crisis plan. The two are often inextricably intertwined, and disgruntled employees – if not effectively communicated with – can quickly become the story more than the original incident.

The mishandling throughout the week resulted in the inevitable – a painful climbdown from the BBC after days of standoff. Lineker is back on air and the BBC is attempting to maintain a ‘business as usual’ façade – but the damage has been done.  In the end, with the BBC long hailed as a bastion of British journalism, the surprise was not the crisis itself, but its handling, given the 2,000 professional communicators in its ranks. In an organisation brimming with journalistic talent, a single Tweet was enough to bring it to its knees.

To find out more about how WA can help advise in a crisis, contact RachelFord@Wacomms.co.uk

You can find out more about the services we provide here.

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The challenges that remain for tackling variation in CVD prevention in England

Cardiovascular disease (CVD) is one of the leading causes of morbidity, disability and health inequalities, affecting approximately 6% of the adult population in England.  

To provide greater understanding on the state of CVD prevention services across England, the NHS Benchmarking Network publishes an annual CVDPrevent audit report. The latest iteration is much more oriented to looking through the lens of health inequalities and regional variation in care, highlighting the significant issue of a postcode lottery in cardiovascular care across the country. This new angle of focus of putting inequalities in the spotlight in the CVDPrevent report rightfully signals that this is where the focus should be for both health system leaders and industry working in this space alike.  

The report indicates some positive highlights for example with the prescription of anticoagulation drug therapy for those with atrial fibrillation at high-risk of stroke rising to 88.9% – only 1.1 percentage point below the national ambition to reach 90% by 2029.  

However, there remains some distance to go on the road to recovery from the pandemic with hypertension services particularly lagging behind others and health inequalities and variation remaining prevalent. Notably, individuals from a Black, Asian or Minority Ethnic background were identified as being the least likely to be prescribed an appropriate drug therapy, receive monitoring, or be treated to target with similar issues present across sex, age and deprivation level.   

Alongside variation in treatment and management, there is also significant variation in local approaches to CVD prevention. Our research and analysis of ICS strategies, planning documents and data relating to CVD-prevention, has found that there is a significant level of variation present in the level of planning for CVD prevention services, as well in care and outcomes.  

It is therefore particularly welcome to see the recent prioritisation of CVD services on the national policy agenda through the intention to publish a Major Conditions Strategy later this year and more recently through the appointment of Professor John Deanfield as the first ever Government Champion for Personalised Prevention. Both developments recognise the issue of inequality and unwarranted variation in the absence of a dedicated Health Disparities White Paper.   

However, the test of any such policy is whether it can be implemented uniformly to impact change across the country and not exacerbate variation as well as whether it can truly trickle down and impact at the local place-based level. To do so these policies will need to balance national direction with a sufficient amount of autonomy to allow for population-based CVD prevention strategies, an ambition of newly formed integrated care systems.  

Although the report demonstrates that progress is being made in this hugely important disease area, it is clear to see that much work remains to be done. Promising policies with high potential are a welcome sight to see and only time will tell if they can truly make the impact they set out to achieve.  

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Girls just wanna have funds

“It’s OK if you don’t know.” 

Ahead of International Women’s Day, WA hosted an all-female panel of financiers to discuss how firms are better engaging with women to improve financial understanding and awareness, and where the industry, policy and the media narrative around women in wealth needs to evolve 

On the panel, Etiksha Patel, Lead Private Banking Director, Metro Bank; Karen Kerrigan, COO, Moneybox; and Elizabeth Caley, Independent Financial Adviser, Aegis Financial Planning Limited discussed what makes women tick when it comes to money and financial products, and how they can better engage with their finances for themselves and for their friends, children and colleagues. 

Women make up 49.6% of the global population and are widely predicted to control 60% of the UK’s wealth by 2025, yet 72% of us feel like we’re not understood by the finance industry.  

This feeling of exclusion is perhaps why only 10% of women prioritise making long term investments which, when women’s pensions on average are £100,000 less than men’s due to the gender pay gap and childcare commitments, seems a very low proportion.   

Elizabeth Caley, who focuses on supporting women, reassuringly said that it’s OK if you don’t understand something relating to your finances: “no one said you should have this knowledge. There seems to be shame attached to it but it’s OK if you don’t know, that’s why we’re here.” 

Similarly, Etiksha Patel believes that having someone to talk to and trust in the bank makes a huge difference to women’s confidence and attitudes towards their finances. She said: “women benefit from in-person contact because we like to ask questions. Financial knowledge becomes accessible if you can ask in-person questions.” 

The sector can’t shy away from the fact that it has, for too long, been dominated by men, and Etiksha crucially said: “It’s important to have women representing women who need answers because it makes asking the questions easier. This is where the change is going to come from.” 

However, women are playing catch up on the education, word-of-mouth advice and knowledge they missed out on growing up because most of the time. There is a question over where responsibility for financial education lies – across all genders – and whether regulatory or policy reform is needed to ensure knowledge and access is instilled early.   

With products such as Lifetime ISAs, women are likely to buy into the goal that the ISA can help with, such as buying a home, rather than simply having the product to make more money. Interestingly, Karen Kerrigan said that MoneyBox’s Lifetime ISAs are held by an equal split of both men and women, but that’s not because they’re marketed differently.  

Reform of the ASA standards for financial products, or the introduction of the consumer duty, will go some way in shaping how products are marketed and communicated to consumers going forward. We’re seeing a greater focus on firms needing to ensure their comms are “socially responsible”, and the last’s years decision by the ASA to sanction irresponsible “influencers” has marked a firmer stance on how products are communicated.  

Though work is still needed to shape the financial services world to meet the needs of women, much has changed in the last 20 years. At the end of the discussion, each panellist was asked what advice they’d give their younger self. Elizabeth said reap the rewards of compound interest early and learn the value of not rushing to spend, but saving to have more. Karen highlighted the importance of creating a habit early, and Etiksha said she would tell herself that it’s OK to ask questions and to feel confident doing so. 

Hopefully, as more of us chat about our money and what we do with it, we’ll help each other, break down the stigma and put ourselves and younger generations on the same starting line as men.  

Because who run the world? Girls. 

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The Labour Party and Carried Interest – why does it matter?

Carried interest. What does it mean? Why does it matter? If you know the answers to those questions, feel free to skip a couple of paragraphs. But for everyone else, carried interest sounds so opaque that it couldn’t possibly be of any interest (excuse the pun). So why does the Labour Party keep going on about it?

Whenever you hear Sir Keir Starmer or Rachel Reeves talking about the economy, chances are they’ll mention carried interest. Not usually by name – that would be too direct for politicians – but in more generic language. Official Labour Party documents talk about “closing tax loopholes for private equity fund managers.” Reeves claims that “private equity bosses say that their income is capital gains…we would close that loophole.”

These are all references to carried interest. But what is carried interest?

It’s more straightforward than it sounds.

After the return of capital to investors, private equity fund managers typically receive 20% of a fund’s overall profits as payment for sponsoring and managing that fund. So far so simple. The controversy arises because private equity managers only pay capital gains tax (a rate up to 28%) not income tax (a rate of up to 45%) on carried interest. The majority of countries where PE is well-developed have a favourable tax regime for carried interest.

Many will argue there is good reason for this. The profits of private equity funds come from the sale of assets. It is reasonable that they attract capital gains tax. Others argue that a fund’s profits basically amount to income for private equity managers and should be taxed as such. Labour is clear about which side of the argument it supports. Reeves has claimed that taxing carried interest as capital gains is “absurd” and gives “tax breaks for fund managers averaging £170,000…as they asset strip some of our most valued businesses.”

That doesn’t sound like the basis for a great relationship between Labour and the private equity sector. But the Labour Party is not alone in calling for a change. A similar debate has been raging in the United States, where carried interest is also taxed as capital gains. Initial drafts of the Inflation Reduction Act would have required fund managers to hold an asset for five years before receiving the advantageous tax rate. The Senate Democrats argued this would raise $14 billion over 10 years – a relatively modest revenue-raiser in the context of the US economy. But according to Senate Majority Leader Chuck Schumer, the Act would also ensure “the wealthiest corporations and individuals pay a fairer share in taxes”. A political rather than economic motive.

Back in the UK, the Labour Party is trying desperately to appear pro-business. In a speech to the CBI in November, Starmer said that Labour Party was “not just a pro-business party but a party that is proud of being pro-business.” So why the attack on private equity? As in the United States, the money raised from changing the tax rules on carried interest would bring in relatively little – around £440 million a year. Which means, as in the United States, the motive can’t be primarily economic. It must be political.

This is because Labour is eager to appear pro-business in order to gain economic credibility, but it isn’t afraid of criticising business when it’s politically expedient to do so. And those sectors of which the public may have a less positive impression – such as private equity – are first in the firing line. By pitting wealthy financiers, whom Labour argues are avoiding tax, against ordinary working people who pay their fair share, Labour aims to present itself as the party of economic justice. Redistributing wealth from a small number of financial elites to support the greater mass of ordinary people.

In other words, the Labour Party is looking to get the keys to Downing Street and will do whatever it can to appeal to voters (as all political parties aspiring to government should do). It believes that increasing tax on carried interest and bashing financiers will achieve this. Which means that carried interest, as niche and as dull as the term may sound, is actually rather interesting, particularly as a microcosm of Labour’s economic approach in the round.

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Mission Zero: Chris Skidmore’s independent review and America’s Inflation Reduction Act

America’s Inflation Reduction Act (IRA) is one of several major pieces of legislation underpinning the bold new economic agenda of the Biden administration. Its name is misleading as it will have little impact on US inflation but is the combination of a domestic industrial policy and an ambitious strategy for net zero, offering $369 billion in investment and tax breaks over the next ten years.

Across the pond, the IRA has been sharply criticised by UK and European politicians and policy wonks due to strict “made in USA” rules that would disqualify European based companies from generous tax breaks and lucrative investment opportunities. UK Trade Secretary, Kemi Badenoch described the legislation as protectionist, stating “it is onshoring in a way that could actually create problems with the supply chains for everybody else.” It risks incentivising companies to re-locate to North America and diverting investment away from the UK and Europe.

Or to quote the Chair of the UK’s Energy Digitalisation Taskforce, Laura Sandys CBE, “the IRA is a game changer… big investors are saying ‘US first, Europe second, Asia third and if you’ve got any spare peanuts at the end of it maybe you can look at the UK.’”

As the US Treasury and Department of Energy are expected to publish IRA guidance in March, UK and EU energy ministers are haggling with their American counterparts to secure concessions and minimise the risks to their respective energy markets and economies. For UK investors, it also prompts questions about the state of play closer to home, with the Conservative Government’s approach putting the UK at risk of falling behind in the global race to maximise the growth potential arising from net zero.

Green leadership in the UK

To rephrase an idiom, the Government’s approach could be described as ‘all wind but no power’. Whilst the UK’s net zero ambitions are well rehearsed by politicians and have been written into law, the policies and funding fail to match the rhetoric. This has created a vacuum which the Labour Party is filling with its Green Prosperity Plan and the promise of £28 billion annually for capital spending on projects designed to tackle climate change.

The Government will need to move quickly for two reasons. Firstly, the High Court ruled in July 2022 that ministers need to explain and substantiate how they plan to deliver on the Government’s Net Zero target by April 2023 following a successful judicial review by climate change campaign groups.

The Court-ordered report is likely to be wrapped up with Government’s response to the independent review of net zero, published in January 2023 and chaired by former energy minister, Chris Skidmore OBE. Skidmore’s 340-page review contains 129 policy recommendations that present the economic case for net zero as “the growth opportunity of the 21st century”.

Secondly, as highlighted by Skidmore’s review, many of the UK’s competitor economies have already made bold and ambitious interventions. Both the USA’s IRA and the EU’s €250 billion Green Deal Industrial Plan provide significant funding and the long-term policy certainty that is mission critical to securing private sector investment in their respective economies. If UK investors are left out in the cold, the UK risks not only losing out on new opportunities, but also current economic activity moving away.

What next for investors?

UK investors can expect the Government to act imminently. Ministers are acutely aware of the competition concerns arising from the USA’s IRA and will want to exploit the UK’s pre-existing market strengths. While the UK cannot compete with the sheer industrial capacity of North America, it is likely ministers will seek to capitalise on the UK’s strong science base and highly specialised expertise in both clean technologies and green finance.

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The Great Unretirement

In January, the Chancellor, Jeremy Hunt, called on retirees to return to the workforce after a House of Lords committee report showed that early retirement is the biggest driver of labour shortages in the UK.

The Lords Economic Affairs Committee’s Where have all the workers gone? report, published following an inquiry into the UK’s labour supply, concluded that there are four main drivers of shortages in the labour market: increased sickness; early retirement, changes in migration trends; and an ageing UK population.

Hunt has urged older people to return to the workforce, and is reportedly working on a “back-to-work Budget” in response to concerns about the large number of people aged 50-64 who have left the workforce.

It is widely accepted by both politicians and economists that rising economic inactivity amongst the over 50s presents serious challenges to the UK economy, as labour shortages exacerbate inflation and threaten economic growth.

For months there has been speculation about a ‘Great Unretirement’ and it would be understandable if investors and businesses were sceptical about the Government’s ability to deliver on this agenda. Back in October 2021, for example, Sunak announced a £500m drive to get older Britons back into work and plug the gap in the labour market. This had little impact, with the rate of over 50s leaving the workforce steadily increasing the first quarter of 2022.

The UK has been an aberration in terms of unretirement. The Learning and Work Institute has undertaken a study which shows that the UK has seen a slower post-Covid return to economic activity among people aged 55-64 than other countries including Germany, the US, Japan and Australia.

But that could be about to change as cost-of-living pressures start to bite . While Government initiatives may have failed to arrest rising economic inactivity in older people, cost of living pressures do appear to be having an impact. According to the Office for National Statistics (ONS), 48,000 people moved out of economic inactivity and into employment between the three months to September and the three months to December 2022. Economic activity among the over-50s is now at its highest level since the pandemic began.

Recognising the desire of many older people to return to work and the important economic contribution they stand to make, the Shadow Work and Pensions Secretary, Jonathan Ashworth, announced that in government Labour would extend free retraining to the over-50s.

Whichever party is in power after 2024, investors should anticipate that getting retirees into employment will be seen as crucial to driving economic growth.

Mel Stride, the Secretary of State for Work and Pensions, has been tasked by the Prime Minister to carry out a review to understand how to attract the economically inactive back into work.

Stride is likely to come under pressure to propose changes to the pension system that would encourage workers to stay in their jobs longer, such as an increase in the tax-free lifetime allowance, which currently stands at £1,073,100.

A current scheme of “Midlife MOTs” – where middle-aged workers take stock of their career with trained advisers – is also set to be expanded. The individual reviews assess finances and opportunities for various types of work retirees could take up.

Regardless of the formal policy response, getting retirees back into work is likely to remain a key government objective even if the number of economically inactive continues to fall in the short-term. The UK has an ageing population and annual welfare costs are expected to increase by £8.2 billion in the next five years. This creates a structural problem as these costs are paid for by the working population via tax.

Investors should anticipate that businesses that have a positive track record of retaining and attracting older workers are likely to benefit, particularly as other employers struggle to compete for talent in a tight labour market.

According to an ONS survey of older people who had left work during the pandemic and not returned, 58% said they would consider returning to work, but many of them wanted more flexible hours, higher  pay or the ability to work from home.

Businesses that can give older workers an attractive route back to work will be better insulated from demographic trends.

It is already widely acknowledged that investing in an ageing workforce has substantial value. The airline easyJet has launched a recruitment drive urging people over the age of 45 to join its cabin crews.

This comes after Fuller’s pubs launched its first recruitment campaign specifically targeting older workers. The pub and hotel group has teamed up with Rest Less, a digital community for individuals aged over 50, to try and attract more people back into the workforce.

Within the civil service there have been drives to attract older workers, with the Department for Work and Pensions announcing last week it would pursue “age positive” recruitment policies by signing up to a national initiative intended to foster age inclusive working practices.

The UK has an ageing population, which will need extra money to be spent on health and welfare but which is less likely to be working and contributing to the economy. The fundamental demographic realities cannot be avoided, but what politicians will want to do is make sure that labour market trends do not exacerbate structural demographic challenges. In 2023 and beyond, investors can expect a clear message from government that the over 50s are as crucial to our economic recovery as younger workers.

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In conversation with Chris Hope

On Tuesday 28 February, WA Communications hosted Chris Hope, Associate Political Editor at the Daily Telegraph, and presenter of ‘Chopper’s Political Podcast’, to discuss the inside track on the politics, personalities and policy discussions shaping SW1 – drawing on Chris’s 20 years’ experience covering Westminster and Whitehall and exploring the relationship between politicians and the press.  

Chaired by WA’s Head of Public Affairs Marc Woolfson, Chris discussed this week’s new deal on Northern Ireland with the EU, May’s Local Elections, and assessed the state of the UK’s major political parties as they begin the run-in to the next General Election.  

Chris outlined five key takeaways during the session:  

Last week, Chris announced he would be leaving the Daily Telegraph to join GB News as their new Political Editor in the summer.  When asked how he felt about the move, Chris said he was excited for a “new challenge, audience and mode of communicating” and the opportunity to speak to people across the UK, confessing that growing up in Liverpool, he sometimes felt like an ‘outsider’ in the Westminster bubble.  

WA regularly host high-profile political figures and leading journalists to explore the intersection between politics, the media, and business – our recent event speakers include Rachel Reeves, Shadow Chancellor of the Exchequer; Chris Giles, FT Economics Editor; and Katy Balls, Political Editor at The Spectator. 

To be the first to hear about our upcoming events, follow us on LinkedIn or email events.rsvp@wacomms.co.uk.  

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Starmer speech – On a mission for a decade of renewal

Yesterday Keir Starmer set out the five ‘missions’ which will form the “backbone of the manifesto and the pillars of the next Labour government”, in the first of many pre-general election speeches to come over the course of the next year.

With Labour maintaining a commanding lead in the polls, and the Conservative government in constant crisis mode, the Labour leadership’s main concern is not to do anything to upset that trajectory.

However, it’s not the first time Starmer has tried to “reset” Labour’s vision and there is still work to be done by him and his top team to fully rehabilitate the Party’s image before voters go to the polls. Starmer needs to prove that he – and his Party – can take up the mantel of Government and deliver significant reform in a short time frame.

Importantly though, for the first time in a long time for a Labour leader, the national media treated the speech as a significant political event, giving it the live broadcast, rolling news coverage and instant analysis that is usually reserved for a Prime Minister’s speech.

Bearing all this in mind, this was, understandably, a carefully crafted (and clearly heavily focus grouped) speech, designed to reassure the public that Labour has the ideas and clarity of purpose to address the challenges facing Britain and the long-term vision that has been found lacking from the Conservative benches.

Drawing heavily from management theories used commonly in the business community, Starmer was setting out his goals – painting a picture of what success would look like by the end of his government’s first term in office:

  1. To have the highest sustained growth in the G7
  2. To fix the NHS
  3. To make the streets safe
  4. To raise educational standards
  5. To make Britain a clean energy superpower, decarbonising the energy system by 2030

For businesses and investors there was the strongest possible message that a Starmer led government’s approach to the economy would be neither “state control” nor “pure free markets” with Starmer stating that “I’m not concerned about whether investment or expertise comes from the public or private sector – I just want to get the job done.”

With the foundations set, the window for influence is open. Work is clearly well underway to put more meat on the bones of these missions, with measurement criteria and granular detail to follow as we get closer to a likely Autumn 2024 general election, with Starmer due to speak on Monday to set out his thinking on the economic mission.

For businesses looking to future proof and inform policy in the long term, these missions provide a framework for engagement at a critical time for the Labour Party.

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Dairy farming: private equity’s next cash cow?

You only need start an episode of Clarkson’s Farm and you’ll soon pick up some of the immense challenges facing farmers across rural Britain today – longstanding issues with supply, distribution and pricing have been propelled by the pandemic, complicated by Brexit, accelerated by the war in Ukraine, and intensified by the cost-of-living crisis. Nevertheless, there are significant and exciting opportunities for growth which make UK agriculture an attractive prospect for investors.

According to the 2022 Agrifoodtech Investor Report, $57.1 billion was invested in agrifoodtech companies in 2021, an increase of 85% on the previous year. 2021 also saw the UK’s highest ever deal flow with UK-based deals reaching £1.3 billion in value, the highest since data has been collected and up from £1.1 billion of investment in 2020. The UK sits 5th in the global ranking of deals by country, just behind Germany, India, China and the USA, though the UK government’s ambition is to be a world leader in this space. While investment in upstream technologies like on-farm tech, tools and services remains high at around $20m, there is a shift beginning to take place with interest now moving towards farm management software, indoor farming, ag-biotech (such as gene editing), and e-grocery. Going forward, agri-tech innovations will be crucial in helping the sector manage labour shortages, energy prices and food security. Private equity investment will be crucial in helping the sector get there.

Those close to the industry, both on the farms and holding the purse strings, are particularly excited about the dairy industry. While this farming discipline is not without challenges of its own (fluctuating prices, rising costs, environmental footprint and bovine TB to name but a few), the opportunities for growth are vast. Advances in genomics and precision livestock farming have underpinned recent productivity and efficiency gains across the dairy sector, supporting the transition towards net zero. For example, the application of precision livestock farming using animal behaviour monitoring via diagnostics and sensors have helped provide valuable data insights into the economic and welfare challenges affecting dairy farmers such as lameness, mastitis, fertility and wellbeing. Precision livestock farming systems are being trialed across farms in the UK, US and China and access to rapidly expanding markets in Asia is being supported by the UK government.

The demand for British dairy products remains high, and not just in the UK. The UK exports almost £2 billion of dairy products to more than 135 countries across Europe, North America, Asia and the Middle East. As a result, the UK dairy sector is well placed to capitalise on the government’s ‘Made in the UK, Sold to the World’ campaign as UK farmers are some of the most environmentally progressive and efficient in the world. One study assessed the dairy consumption of 90 dairy-importing countries with a population of nearly 5 billion. It found that between 2011 and 2019, dairy consumption in those countries increased from 258 billion kg to 304 billion kg – an increase broadly equivalent to two years’ worth of the total milk production volume of New Zealand. Countries such as these are expected to see an increase in demand over the next decade, currently projected at 5.6% per year from 2019 to 2025. It is unlikely that they will be able to meet these demands locally.

Alongside this, recent reports also suggest that the EU dairy industry is in decline. Production is expected to fall by as much as 6.3% in Europe over the next 6 years largely because of the implementation of the EU’s Green Deal and resulting updates to the Common Agricultural Policy. This represents a significant opportunity for UK dairy farmers, with dairy export markets typically more profitable than domestic ones. As a result, many dairy processors are undertaking investment to allow them to access growth markets overseas.

In 2022 the National Farmers’ Union expended considerable effort pushing forward a dairy export strategy with the ambition of doubling UK dairy exports in the next 10 years. Working closely with the Department for Business and Trade, the NFU continues to see this as a priority for 2023. Over the coming year we can expect the sector to push for trade and regulatory policy that supports the industry to compete at a global level. It will also court investors to inject vital funds into dairy businesses to maximise the industry’s innovation and resilience; the investors who do, look set for a good yield.

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The Rise of ChatGPT: Unleashing the Potential of AI and Big Data in Industry 4.0

Since its launch by Open.AI in November 2022, the chatbot software ChatGPT has come to represent a first look at what a world underpinned by artificial intelligence could mean for the everyday person. ChatGPT not only went viral on social media but also became a hot topic of conversation in both the workplace and around the family dinner table. While employees pondered the future of their jobs, students conspired to avoid their homework or university essays. Many speculate that either ChatGPT or another chatbot software will soon replace the traditional search engine and is the first real-life version of Iron Man’s artificial personal assistant, J.A.R.V.I.S. (Just A Rather Very Intelligent System).

If true, it could spell disaster for the Google search engine which commands a 92% share of the global search engine market and which is expected to launch its own chatbot software ‘imminently’.

Why? Because artificial intelligence promises to fundamentally rewire (and speed up) the way humans interact with information and data. Its promises are as grand as the first, second and third industrial revolutions of recent human history. The Chairman of the World Economic Forum, Klaus Schwab, argues that artificial intelligence and big data equates to a fourth industrial revolution that will “raise global income levels and improve the quality of life for populations around the world.”

Popular intrigue in ChatGPT has followed investor interest in artificial intelligence with global private investment doubling from 2020 to 2021, totalling $93.5 billion, and marks the greatest year-on-year increase since 2014.

What does artificial intelligence mean for policymaking and public services?

Artificial intelligence is set to transform public services in the future. For instance, at the end of 2022 there were 1.5 million patients waiting for a diagnostic test, representing a sizeable chunk of total NHS waiting lists. With a workforce shortage in the diagnostics sector, artificial intelligence has demonstrated a remarkable ability to carry out image-recognition tasks and through ‘deep learning’ algorithms can handle complex variations and detect characteristics well beyond the capacity of humans. Embedding its use is a long way off but nonetheless promising.

So much so that during the covid pandemic, NHS AI Lab built a 40,000 strong database of chest scans to enable researchers, analysts and developers to develop AI technologies with the potential to support quicker diagnosis and better targeted treatment. Not only does this programme provide the NHS with an invaluable blueprint for testing and adopting AI models in the health sector, but also attests to the importance of public and private sector collaboration to advance the application of artificial intelligence. Whilst it will never entirely replace the need for humans, it is easy to imagine a healthcare system radically transformed by artificial intelligence, saving the NHS both time and money.

Artificial intelligence will also transform policymaking. Deloitte recently argued that over time “AI will spawn massive changes in the public sector, transforming how government employees get work done.” Certain jobs that are administrative or operational are likely to become redundant, Government functions will be entirely redesigned, and a new army of programmers and coders will rise through the ranks of public sector organisations. Deloitte’s research suggests that automation and artificial intelligence could replace up to 861,000 public sector jobs by 2030, saving the UK Government £17 billion annually in wages compared to 2015.

Unresolved ethical and regulatory questions

As with any advances in technology, questions of ethics and best practice are never far away. Just as electricity enabled the automation of manufacturing and mass production, it also led to the invention of the electric chair, and artificial intelligence blurs the boundaries between what is physical and what is cyber. Decisions made by artificial intelligence are not always intelligible to humans. These decisions are not always neutral but are susceptible to bias and inaccuracies and can entail surveillance practices that invade rights to privacy.

The Government’s Office for Artificial Intelligence has partnered with the Alan Turing Institute to address some of these concerns. Thus far only guidance has been published. Whilst the Government announced a Data Protection and Digital Information Bill to better regulate the use of artificial intelligence in July 2022, it is not a top priority of Sunak’s Government, preoccupied with fighting fires and re-establishing economic credibility in the lead up to a general election. Given the tight parliamentary timetable, regulatory uncertainty is likely to persist in the short- to medium-term.

Despite this uncertainty, the UK artificial intelligence landscape is still an attractive opportunity for investors with the Government recently expanding R&D tax reliefs to include all mathematics supporting artificial intelligence, quantum computing and robotics. But with the introduction of artificial intelligence regulation expected in 2023 in both the US and the EU, the UK risks being late to ride the wave of the fourth industrial revolution.

Ps. ChatGPT authored the title of this blog.

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Scotland needs Labour and Labour needs Scotland

I attended the Scottish Labour Party conference in Edinburgh at the weekend. It took place two days after the shock news of Nicola Sturgeon’s resignation. As a consequence, the mood amongst delegates was jubilant. The overwhelming feeling was that change is coming and a belief that the SNP’s grip on Scotland is finally loosening.  A YouGov study in the days before the First Minister’s resignation showed 29% support for the SNP, 27% for Labour and only 12% for the Conservatives. Labour now strongly believes that with the hugely popular Sturgeon gone they will receive a further electoral boost.

However, despite the buoyant atmosphere, key figures were keen to urge caution. Pat McFadden, Shadow Chief Secretary, speaking at a Labour Friends of Scotland fringe meeting, stressed that the enormity of the task ahead in delivering a Labour victory could not be underestimated. And both leaders, Anas Sarwar and Sir Keir Starmer, warned against complacency in their keynote speeches. The focus was very much on the need for economic growth and the failure of both governments, SNP in Holyrood and Tories in Westminster, to deliver what the electorate needs and deserves.

Meanwhile, the infighting amongst the SNP leadership challengers spilled over into the Scottish media. Nicola’s announcement clearly took them all by surprise. Her deputy, John Swinney, ruled himself out almost immediately. Humza Yousaf, the Health Secretary, and Ash Regan, a former minister, threw their respective hats in the ring. Angus Robertson, rumoured to be Sturgeon’s preference, has said he will not run and Cabinet Secretary, Kate Forbes, the current favourite according to polls, announced her intention to stand earlier today.

Back in the conference venue, the First Minster’s “legacy” was much-derided. Scotland’s denuded public services, the parlous state of the economy, unprecedented levels of poverty and the worst drugs record in Europe were all laid squarely at her door. She, and by extension her Government, had failed the people of Scotland and it is down to Labour to provide solutions. And for once, it did not feel as if this was Labour Party delusion. New candidates for the next election, including former International Trade Secretary, Douglas Alexander, were credible and inspiring. The optimism and need for change amongst the delegates was palpable.

Scotland was Labour’s original Red Wall, losing 40 out of its 41 seats in 2015. Based on recent Scottish polls, and bolstered by UK Labour’s poll lead, it is not beyond the realms of possibility that the party could win 25 seats next year. The outcome of the next election now lies as much in Midlothian as it does in the Midlands. Anas Sarwar deserves enormous credit for this spectacular turnaround and I predict a host of senior Labour figures visiting the length and breadth of Scotland in the next 18 months now that this realisation has dawned.

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Private Equity in South Korea – Ready for fame?

South Korea is famous for many things – Samsung, K-Pop, Ban Ki-Moon – but not, perhaps, for private equity.

It should be.

Because in the last twenty years, private equity in the peninsula has undergone a radical and lucrative transformation. At the turn of the century when most of the world was focused on the Millennium Bug, the Bush-Gore Presidential race and The Matrix, South Korea was recovering from a severe economic slump. The Asian Financial Crisis of 1997 had affected South Korea badly. GDP growth fell from 7.9% in 1996 to -5.1% in 1998. Interest rates rose from 6.7% to 10.3% over the same period and the South Korean government was forced to go to the IMF for help.

At this sorry point in South Korea’s economic history, overseas investors saw opportunities. Between 1998 and 2003, a succession of Korean financial institutions – Good Morning Securities, Korea First Bank, KorAm and Korea Exchange Bank – were snapped up by foreign investors seeking to benefit from the economic downturn. Foreign private equity firms are estimated to have invested over $6.6 billion in South Korea during this time and investors reaped the rewards with profits worth billions.

But not all Koreans took kindly to foreign buyouts of household Korean companies. Large-scale protests accompanied the takeover of Korea Exchange Bank and key figures associated with the deal were later imprisoned.

Today, private equity investment in South Korea tells a very different story. The country has embraced private equity on its own terms. Lessons from the Millennium takeovers and the Asian Financial Crisis convinced Korean lawmakers that changes to domestic financial regulations could counter foreign takeovers and support domestic economic recovery. Fundamental changes through the Capital Markets Law of 2005 enabled Korean investment funds to raise capital for investment other than for specific projects – a restriction which had previously curtailed private equity activity.

The benefits for private equity of regulatory change were swift. The number of Korean private equity funds increased from 15 in 2005 to 189 in 2011, with 70 out of the 85 investments in the Korean takeover market in 2011 led by domestic funds. Total private equity investment in South Korea also increased, starting at $3 billion in 2005 before rising to $17.6 billion in 2015 and almost $30 billion in 2021. Analysis by McKinsey in 2018 showed that annualised private equity returns stood at around 20% with an average holding period of just over 3 years. Not bad for an industry that didn’t exist twenty years ago.

But for UK investors there are further reasons to take note. The UK Government has set out its intentions to seek an enhanced trade deal with South Korea. This would build on the existing UK-South Korea Trade Agreement, which largely rolls-over the EU-South Korea Trade Agreement, and introduce new chapters on digital and investment. Outward stock of Foreign Direct Investment (FDI) from the UK in South Korea was £4.6 billion in 2020,  comprising 0.3% of total UK outward FDI. The value of outward UK FDI to South Korea has remained steady over the last decade standing at £4.2 billion in 2011 before peaking at £6.9 billion in 2017 but there is clearly room to grow further. On average in 2020, over 95% of Korean restrictions on Foreign Direct Investment (FDI) were equity restrictions – limiting foreign ownership and foreign investment activity in the peninsula. Although this is not surprising given the reaction to foreign buyouts in South Korea twenty years ago, increasing market access for overseas investors is likely to be an important element of a new investment chapter for UK negotiators in an enhanced UK-South Korea FTA. FDI stock from South Korea in the UK by contrast has grown markedly in recent years from £900 million in 2011 to £3 billion in 2020 – around 0.2% of global inward UK FDI.

The prospects for the South Korean economy to the end of the decade look promising too. IMF predictions show steady growth in GDP of between 2% and 2.7% over the next five years to 2027, with inflation falling to 2% in 2025 – down from 5% in December – and remaining at that level until 2027. The Secretary of State for Business and Trade, Kemi Badenoch, has said that a trade deal with South Korea would allow the UK to “expand our key exports in digital, business and financial services”. If the government in Seoul can be persuaded to open itself further to foreign investors, UK private equity firms will benefit from new and innovative partnerships, providing steady returns for investors.

And the strength of South Korea’s relations with UK investors will be one more thing the peninsula is famous for.

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What does a government restructure mean for the energy sector?

You’d be forgiven for having a sense of déjà vu with the announcement of a new separate Energy department, with a return to the structure of the Brown and Coalition governments. With Rishi Sunak committing to this change in his summer leadership campaigns, and recent reports from Chris Skidmore and Andrea Leadsom both recommending this, it felt inevitable. It is however unusual to make such a radical change so close to the next election.

So what does this mean for the energy industry, currently seeking to deliver a transformational shift to a low carbon economy?

Major machinery of government changes take time, effort and focus, particularly from senior officials. Establishing a new department creates short-term uncertainty amongst officials and risks urgent policy priorities being deprioritised.

The retention of the current political team – Shapps, Stuart and their advisers – maintains policy leadership and largely ensures a continuation in approach.

One school of thought is that a singular focus from the new department on energy will deliver better results, without the distraction of other business issues and with the whole department aiming in the same direction.

This may well be true, but a new department – even with a competent and respected Secretary of State – is on its own not going to move the dial on key sector agendas, such as planning reform and changes to the grid to speed up offshore wind deployment or establishing a hydrogen market in the UK. Achieving these requires a more radical and ambitious approach to policy delivery, which ultimately needs the support of the political centre, namely No10 and the Treasury.

As the next General Election gets closer, there’s a clear risk for the sector that the singular narrative focus from government on the Prime Minister’s ‘five key priorities’ pushes aside the detailed policy action required for the UK to stand any chance of achieving its 2035 power decarbonisation target. The industry’s priority has to be to frame its case in terms of helping achieve these goals, specifically on driving economic growth and halving inflation.

Government messaging on energy has been shifting to focus on energy security for the last year, with an even greater focus post the Johnson government. The unveiling of the new department does highlight this shift in government focus very starkly: energy security is specifically mentioned in the name, and prioritised over Net Zero; and the absence of any reference to low carbon power or green growth in the government’s overview of the department, focusing purely on security and affordability.

The industry has made a strong case that low carbon power and energy independence are two sides of the same coin, and there needs to be no choice between them. However, there will be a need to double down on this case, and to shift messaging to emphasise the benefits to security of supply when seeking government support.

Climate advocates within the Conservative Party have long sought to frame the case for action on Net Zero through the lens of green growth and jobs. The location of major projects, be that the renewables sector, hydrogen projects or new nuclear sites are in traditionally economically left behind areas of the country. The Net Zero transition is one of the clearest routes to delivering levelling up.

The combination of energy and business policy within one department made it easier to make this case, and for the government to recognise it. That now may become harder. Tying energy to jobs, skills and growth (particularly in the right, electorally important areas) is still the clearest route to securing government backing, particularly from the Treasury. It will be incumbent on industry to make this compelling argument even more effectively, bringing data and human stories to the fore to show why government needs to quickly push the right policy levers that support industry.

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How should the Government best plug the skills gap?

At the start of National Apprenticeship Week, WA Associate Director Lorna Jane Russell explores whether degree apprenticeships are the solution to tackling the skills gap

One of the most significant challenges facing the country today is the need to build our future economy and ensure that our workers have the right skills required to support the jobs of the future.

However, at present the outlook looks uncertain; the UK has a serious skills gap. Put simply, this means there is a mismatch between the skills needed to do a particular job and the skills that are available in the workforce.

A skills revolution is required to address this.

In recent years there has been a heightened awareness of the need for graduates to have a diverse range of skills – something that is recognised by policymakers and employers alike.

Indeed, investment in skills and apprenticeships has become a clear Government priority. Skills Minister Robert Halfon has long championed apprenticeships and believes that investment in skills is the best route for the Government to take to create economic growth and productivity, while Education Secretary Gillian Keegan is a former apprentice herself and is committed to boosting the lifelong learning agenda.

As the Government looks to rebalance the funding and focus of post-18 education, publishing the long-awaited Higher Education Bill and taking forward the recommendations from the Augar Review, we expect it to prioritise and expand funding and support for apprenticeships.

Within this context, we hope to see a significant boost for degree apprenticeships as we believe that these could make a real difference to plugging the skills gap and meeting the future needs of both learners and employers.

Significantly:

Since they were launched in 2015-16, degree apprenticeships have risen in considerable popularity, while traditional university student numbers are starting to fall. Yet, despite growing interest in these types of degrees, there is clear potential to expand them further across the UK.

This National Apprenticeship Week, and ahead of the introduction of the Higher Education Bill, we hope to see the Government set out a roadmap for the expansion of degree apprenticeships – both by investing more resources in them and by working more closely with employers and post-18 education and skills providers to provide more placements and courses.

At WA, we’ll be watching for announcements closely, making sure we are one step ahead of the next developments on the horizon and supporting universities, skills providers, and large employers alike to make the most of the opportunity to expand their own offerings.

Watch this space as we launch our own research next month to take a much deeper dive to explore the potential of these qualifications to transform the country’s skills base. If this sounds of interest, we’d love to chat.

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Consumer Duty regime – what is it and why should you care?

The Consumer Duty regime seems to be the hot topic on the financial services industry’s lips. A quick Google search delivers 51,400 news results and nearly every conference, webinar or forum has a session on readiness for this new regulation. However, what is it, really? And why should you care? 

First things first, the Consumer Duty regime is a significant piece of regulation, coming into effect on 31st July this year. It sets high expectations and clear standards of consumer protection across financial services and means that consumers should receive communications they can understand; products and services that meet their needs and offer fair value; and that they get the customer support they need, when they need it. 

Surely, I hear you cry, putting the customer first, ensuring they are being sold appropriate products and have access to full support is already at the heart of the industry? Well, in theory, yes of course. In fact some of you will recall the FCA’s “Principles” – notably Principle 6 (a firm must pay due regard to the interests of its customers and treat them fairly) and 7 (a firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading). The Consumer Duty imposes higher standards for both these principles and underlines the fact that firms should focus on the impact of their actions on consumers, and not simply on processes. 

So far so good, but what does this mean in practice? And how is the industry responding to the ever-closer Summer deadline? 

Firstly, firms need to know exactly who their end customer is. It’s no good to know that a firm has products aimed at “the retail investor” – businesses must consider the appropriateness of their products vis a vis this “investor” so more detail on their financial understanding and wider situation is critical.

Secondly, businesses need to clarify responsibilities both internally and across the wider distribution chain. We all know there can be several intermediaries between, for example, an asset manager and the man on the street – those intermediaries need to know what their role is, what details they need to have and how they can feed their intel across the rest of the distribution channel.

Thirdly, policies and customer communications will have to be reconsidered and likely amended to ensure they fit in with the new requirements and are easily understood.

And finally, firms will need to implement a framework to ensure they know what “good” looks like, can monitor outcomes and identify any risk areas in line with their longer term objectives. 

It is a very tall order and, from conversations we’ve been having across the industry, no-one seems to be quite there, yet. Some argue that this regime calls for a much needed shake up of the wider industry and a huge shift in mindset, engagement and protocols; others claim that the combination of Consumer Duty regulation and the additional burden of the SDR is simply too much for any player in the market; yet more, worryingly, are aware of the challenge yet still unsure how they’re going to meet it without considerable external support (and expense). Whatever your stance, what is clear is that the regulator isn’t going to rest on its laurels – it wants to see better consumer outcomes and a fairer financial services industry – and those who fail to comply will be held to account.  

With that said, it’s essential to bear in mind what the goal is of this new regulation – an industry which works for the customer, not the other way around. Amongst all the discussion of the difficulties, risks and extra admin, we need to remember that if implemented correctly, this regime will ultimately deliver better results for the consumer and, we hope, build back trust in the financial services industry. Those who successfully demonstrate they are fully embracing this Consumer Duty (or in fact going further) will be in a tremendously strong position to showcase their efforts and set the bar for what “good” looks like.  

I don’t deny that this new regulation will be a challenge, but the benefits of doing it properly and using this as an opportunity to really examine functions, communications and end outcomes – for a common goal – surely mean it’s a challenge worth taking on. 

At WA we’re here to help firms use this new regulation as an opportunity to raise their profile and offering in the market; to share their experiences of making sure they comply (the good, the bad and the ugly); and to leverage the new rules to show that yes, the end customer really is at the heart of their operations. Drop us a line if you want to find out more. 

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Major ambitions in a new Major Conditions Strategy

A new health strategy is coming – finally! And it threatens to be a whopper.  

A Major Conditions Strategy will be consulted on – and potentially published – in 2023. After months of firefighting on day-to-day NHS operational performance the Government is looking to get back on the front foot and show the world it still has ambitions to improve the long term health of this nation. 

2022’s political turbulence put the 10-year cancer, dementia and mental health plans on ice, saw off the health disparities white paper, delayed the workforce plan, stalled the implementation of the Life Sciences Vision, and neutered the joint DHSC and NHS England Long-Term Plan refresh. Pressure on NHS services across the country and at every point in the system made long term strategising – however urgently needed – impossible. 

Steve Barclay’s ministerial statement today is an attempt to correct this perception, while streamlining the numerous strategies his predecessors committed the Department to.  

In short, the Government and NHS England will be developing a new strategy for ‘major conditions’ including cancers, cardiovascular disease – including stroke and diabetes, dementia, mental ill health and musculoskeletal disorders.  

The ambition is to develop a ‘strong and coherent policy agenda’ building on the progress of the NHS Long Term Plan to deliver the Government’s manifesto commitment of gaining five extra years of Healthy Life Expectancy by 2035.  

The statement makes for dizzying reading as it sweeps across healthcare hot topics: 

Given the breadth of the scope, it will likely generate cynicism as well as hope. There is no doubt that there are many big challenges that need addressing – conditions like diabetes and dementia have a huge impact on society and individual lives, and have consistently not received the attention they need to drive meaningful improvements in care.  

However, there is also a very real risk that this new attempt at a sweeping strategy is seen primarily as a move to kick action into the long grass, while giving ministers an answer to the persistent questions about progress on long awaited strategies in cancer, dementia and mental health. As healthcare has become increasingly political, today’s announcement is primarily about providing a degree of political cover.  

The consultation will need to address how any new strategy aligns with the wider approach to delivery. A major national review across multiple disease areas doesn’t naturally lend itself to the agenda of greater delegation of powers to ICSs through Hewitt Review or the removal of centrally imposed targets. It is also unlikely that significant funding will accompany reforms when all signals point to the expectation of efficiency and restraint.  

The health community will inevitably, and rightly, want to engage again: sharing evidence, policies, and best practice examples to try and shape this latest attempt at a vision for the future of care.  

But how many times can stakeholders and patients be walked up the hill without seeing any tangible change? 

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The key trends shaping 2023 across Financial Services

We may only be 13 days into 2023, but it’s already on track to be a very busy one in the financial services industry. Whether you’re an adviser, asset manager, bank, fintech, pensions provider or in fact provide any financial services proposition, you’re in for a challenging, but exciting year.  

Looking ahead, here are the key themes we see shaping 2023 – will they be obstacles or opportunities? 

The conversation around sustainability is only gaining more ground – with Scope 3 emissions disclosure on the horizon, SDR finally being implemented and Net Zero targets tightening. In particular, we expect stewardship to come to the fore, with wealth and asset managers being held to account regarding their previous commitments and asset owners seeking clarity around the concrete outcomes of stewardship activities. With better stewardship leading to improved investment outcomes and real-world sustainability achievements, this is a movement which can’t come quickly enough.  

Consumers across nearly every sector are becoming increasingly demanding and discerning. The old adages “the customer is always right” and “fortune favours the bold” are holding fast with new innovations tailored to meet consumer expectations gaining traction and market share. Our recent consumer research showed that over half of 18-34 year olds are often on the lookout for the newest and most advanced financial technology apps and if those apps don’t work for them, they’ll vote with their feet. It’s a jungle out there but firms who can successfully innovate and communicate their new offerings, will reap the rewards.  

Of course, the financial services industry has always been a highly regulated sector, even more so with the additional duties and responsibilities heaped on the FCA through the Financial Services and Markets Bill. However, recently the regulator has grown teeth and firms who aren’t complying won’t just face a slap on the wrist but instead steep fines and penalties. 

The Consumer Duty is a case in point. Consumer protection has consistently been at the heart of regulation, but the requirements of the new Consumer Duty demonstrate that ticking a box is no longer enough. All firms which distribute or manufacture products or services to retail customers now need to demonstrate good value, consistent and clear communications and appropriate support to their customers – essentially Treating Customers Fairly, on steroids. 

With the Government heralding Open Banking as a success earlier this week and businesses and industry groups piling in to make recommendations on what comes next, all eyes are on the EU review of PSD2 regulations and what this could mean for data and tech enabled products in the UK. Will HM Treasury and the FCA follow suit with the reforms being proposed in Brussels? Or will the temptation to ease regulatory burdens win over additional data protections?  

In either scenario, more work is needed to iron out the remaining kinks in Open Banking – from tougher compliance rules to an improved consumer UX – before the blue sky thinking of Open Finance can begin.  

2022 was the sixth-most volatile year since the Great Depression and most economists are forecasting markets to “get worse before they get better”. That said, the continued desynchronisation between the US, Euro area and China presents a range of investment opportunities for those who are shrewd enough to find them. It will be a bumpy ride, but long-term investors are likely to be rewarded if they can sit tight and we know both the media and consumers will be hungry for a good news story for those who can successfully weather the storm. 

At WA, we’ll be watching these areas closely, making sure we are one step ahead of the next developments on the horizon and supporting firms who want to leverage these trends for their own market position. If that sounds of interest, we’d love to chat. 

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A trillion dollar lift off in the commercial race for space

As recession looms over the UK economy, investors will be asking: what sectors will be resilient against the headwinds of economic downturn? Conventional wisdom points to those companies, industries, products, or services that we cannot live without, such as healthcare, consumer staples and utilities. But perhaps surprisingly, the space industry is also tipped to be largely recession proof.

Whilst the media grabbing headlines of space tourism or a failed rocket launch often portray an industry characterised by mystique and adventure, the less glamorous technologies that make modern space exploration and exploitation possible will prove fundamental to modern living, and indeed statecraft. From providing location data to mapping weather patterns, natural disaster prevention to protecting national security, everyday life and traditional industries are likely to be the primary beneficiaries of space enabled transformational change.

State-driven endeavours into outer space were a key battle ground of the Cold War. The commercial battle, dubbed ‘New Space’, has become a new field of competition for nations and private companies alike, with the battle for supremacy having rumbled along for well over a decade. Governments around the world are racing to secure their foothold in this evolving domain, recognising the sector’s economic and strategic potential. Or to quote from Policy Exchange’s Space Unit, the first of its kind at any UK think tank, “UK commercial space is not just another commercial market that should be left to the vagaries of a global market, but is a strategic sector of national security interest and importance that provides critically needed technologies and services”.

Slice of the economic pie

At present, the UK space industry generates £16.5 billion annually, more than a trebling since 2000, and space technologies now underpin £360 billion per year of UK economic activity. Globally, the space market is expected to increase from $339billion (2016) to $2.7 trillion by 2045, a figure comparable to the economic might of the oil industry today, which represents nearly 4% of the global economy. The UK economy is well placed to benefit from this future trillion-dollar industry with a 5.1% foothold already established in the global market. However, if the UK wants a large slice of this lucrative pie, it will need to take a leading role in shaping the development of the global space industry, continue to expand and build new spaceports, as well as attract companies to locate in the UK.

Opportunities for investors

Investors have witnessed an inflection point within the space market. Venture capital continues to back start-ups at record levels year on year, creating a generation of companies with proven space technologies. Now is the time for more traditional investors to identify clear revenue raising growth opportunities and scalable space technologies. The investment risk is less about the viability of new space technologies and more about the execution of scaling up and expanding. For institutional investors, it is now a question of capital allocation and portfolio exposure, or rather how big their appetite is to back the space industry when up against other sectors of the UK economy. Reflecting this inflection point, the private equity fund, NewSpace Capital, the first of its kind focusing on the growth stage of space enterprise, recently closed a funding round raising €100m.

Unresolved political risks

The UK has played a formative role in continental Europe’s space architecture as a founding member of the European Space Agency, the principal intergovernmental organisation that cultivates policies, develops programmes and administers funding for the space industry. Crucially, whilst independent from the European Union, it is inextricably linked in administrating the EU’s space and funding programmes. Despite the Brexit withdrawal agreement reached in January 2020, the EU continues to leverage UK participation and access to Horizon Europe, the €95.5 billion funding programme for research and innovation for 2021-2027, and Copernicus, the EU’s Earth Observation Programme, against the outstanding political issue of the Northern Ireland Protocol.

As stated by EU Commissioner Mariya Gabriel in October 2022, UK participation and access is ‘linked’ to (potentially conditional on) resolving the issue of the Northern Ireland Protocol. This political obstacle may be resolved by Rishi Sunak in 2023 as he adopts a more conciliatory approach when compared to his predecessors. For however long the uncertainty remains over the UK’s participation in Horizon Europe and Copernicus, it is damaging for both the UK and EU. Just as waiting in limbo risks the UK falling behind, there also exists a gaping hole in the EU’s planned investments without the UK’s contribution. This is particularly true given the US and China sizeably outspend the UK and EU as a percent of GDP. In the short-term, there are three possible outcomes:

Space falls within the remit of George Freeman, Minister for Science, Research and Innovation, and a former biomedical venture capitalist. In response to industry concerns about waiting in limbo, Freeman recently made available £200 million of the UK’s original £750 million commitment to Copernicus, demonstrating the Government’s willingness to be proactive in remedying some of the immediate bottleneck issues. In total, the Government committed £615 million to the European Space Agency, £217 million to global exploration programmes, £206 million to telecommunication, £111 million to space safety and security, and finally, £71 million to new technologies in November 2023. In addition, funding settlement increased in length from one to three years, a strategic decision for an industry that typically works toward longer timescales.

The House of Commons Science and Technology Committee has a less optimistic take on the UK’s position and approach to space. A recent inquiry found the Government wanting on several fronts and was critical of the Government’s sizeable stake in rescuing the once bankrupt company OneWeb, as well as its decision against developing a new sovereign sat-nav constellation. The Committee called for additional funding – perhaps to compete with that of China and the US – as well as for the Government to publish what a ‘Plan B’ might look like in the event that the UK is no longer granted participation and access to the EU’s space programmes.

Whilst the Government’s November funding announcement brings added certainty for the space industry, further increases in funding is highly unlikely given the cost-of-living crisis and pressure on the public finances. The mood music, however, is changing around the Northern Ireland Protocol with hopes of an imminent resolution, thereby enabling the combined heft of the UK and EU to collaborate on space. Nonetheless, the appetite for space technology will likely weather the UK’s economic recession and with a maturing space market, private investment will be mission critical to ensuring an economic lift off for the next trillion dollar industry.

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Social media: the dos, don’ts and the ‘depends on the circumstances’

Earlier this week Business Secretary Grant Shapps was called out by Twitter users after posting an image that appeared to edit out former Prime Minister Boris Johnson.

While the post was swiftly deleted and sources close to Shapps deny he knew the post had been edited, the incident serves as an important reminder on the integrity, accuracy, and reliability of social media content.

It also raises interesting questions about how brands and individuals should react when they make mistakes. Is it best to bury your head in the sand and hope no one notices? Or should you not only lean in, but throw yourself into the mistake, raising its profile but at least owning the narrative?

Here are our three top tips on how to make social media work for you – and what to do when things go wrong.

1. Check before your post

The most important tip also happens to be the simplest. Remember to double check – and then triple check – all content before you post it.

After all, who can forget former shadow chancellor Ed Balls inadvertently posting his own name on Twitter, giving rise to a day dedicated to his honour each year? Or the thousands of British shoppers and Christmas advert devotees who tag the US-based man John Lewis each year instead of the retailer’s handle.

And as Grant Shapps’ slip-up shows, it’s not just what you post, but how you post it. Remember to check all imagery (crediting copyright owners where appropriate) and ensure links send your followers to the right place.

2. Own your mistakes

Despite the highly-anticipated ‘edit’ function on Twitter being trialed by verified users in select countries, editing your way out of a mistake currently isn’t an option.

This leaves red-faced users with two options: delete the post in question or issue a clarification.

As a rule of thumb, if a social media post contains minor errors but has already been shared widely it’s probably not worth deleting as it is unlikely a repost would gain the same traction. In this case, commenting on a post or setting up a Twitter thread clarifying the original tweet is the best course of action.

On the other hand, anything offensive or widely inaccurate should be deleted immediately. Keep in mind this doesn’t necessarily remove it from the public domain, given the speed and interactivity of social media platforms, the ability to screenshot content using smartphones, and Twitter accounts such as @deletedbyMPs.

3. React quickly

Whichever approach you decide to take, do it quickly and be prepared for questions from your followers, stakeholders or even the media.

If you think a social media mistake could generate significant critical attention, make sure you consider potential scenarios and agree a handling plan in advance.

As well as taking obvious steps such as pausing scheduled tweets, you should consider your wider company profile, which includes advising senior spokesperson they could face online scrutiny and thinking carefully about planned marketing activity that could come under fire.

At the end of the day, as long as you own up and take appropriate action most social media mistakes are quickly forgiven and forgotten – and it’s very unlikely you’ll make the same mistake again.

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A guide to the challenges of 2023: A tell-all year

As the second week of 2023 draws to a close, it’s clear the year ahead will be rife with economic and political challenges.

WA Partner Rhoda McDonald was joined by WA Senior Adviser, broadcaster and journalist Steve Richards to discuss the issues that will dominate 2023.

Here are our key takeaways from the event:

Labour finding it’s feet

The Labour party enters 2023 with renewed enthusiasm. Starmer is keen to whip the Party in to shape and prove they are a Government in waiting. As he prepares for an offensive, there will be high expectations for his cabinet to perform, and with reshuffle rumours circling, there will be no room for idlers.

His team has largely been moulded by a new New Labour era, with some Blair flair, and it is clear that top of his agenda is modernising central government, stimulating economic growth, and reforming the British energy sector.

One of the key policy differences between the Conservative Party and Labour is around industrial policy – Rishi Sunak shows no great interest in an overarching Industrial Strategy, whereas Labour’s looks potentially very substantial, extending to light manufacturing, transport, and even retail, to underpin their ambitions for higher productivity and growth.

A Tory Party divided

Meanwhile the Prime Minister is tending to a wounded Tory party and attempting to rebuild political and economic stability. With wavering Tory voters, and the threat of a new Reform Party poaching his MPs, Sunak needs to be constantly appealing to the public and his backbenchers if he is to retain control.

Although Sunak appears to be relishing the challenge and leaning in to his role as the peace maker of the party, it is unlikely to be smooth sailing as the year kicks off with headlines dominated by strikes and pay disputes.

It’s all about the economy

The country’s economy is top of the inbox for the current Government and the Opposition alike. As Sunak’s forte, he is busy emphasising his brand as the fiscally minded Prime Minister who can stabilise the markets and bring public spending under control.

For Sunak the pivotal moment will come in the March Budget. The Prime Minister had prepared a draft budget during the leadership campaign, which was very business focused – looking at tax rates, business needs, and how to get people back into the workforce. As Corporation Tax rises take effect this year, against a background of a dire economic environment, the message of ‘growth, growth, growth’, and delivering the incentives needed to shape company and labour market decisions, are likely to be at the forefront when the Chancellor stands up at the Dispatch Box on 15th March.

On the other side, Labour are in the midst of deciding whether they follow a New Labour approach and stick to Tory spending plans, or to reinvent the fiscal wheel and risk further unease. Either way, the position they take will be determined by Shadow Chancellor Rachel Reeves.

Fixing the NHS

With the NHS hitting the headlines every week, healthcare reform will be a prominent issue throughout the year. The Government cannot shy away from the mounting pressure to act.

Having already passed the 2022 Health and Social Care Act, the Conservatives are unlikely to introduce new reforms this side of the election. However, talk of how to use the private sector and discussions of outsourcing are starting to snowball, with Labour saying they would consider this approach to relieve demand on the NHS.

Energy crisis

While the energy crisis continues and with geopolitical factors such as the war in Ukraine determining future supply issues, the Government is facing further spending pressures. The clock on household support is running down, and businesses are already feeling the pinch.

The risk for Sunak is inaction should the energy crisis become more acute. Although he has been avoiding Government intervention, he will be forced to change tact and avoid taking heavy fire from Labour as they seek to differentiate themselves.

The Deregulation agenda

With growth set to be the buzz word of the year, the regulatory landscape remains a battle ground yet to be won. As the realities of an EU regulatory bonfire threaten chaos, the Government is looking at lighter regulatory initiatives.

With businesses calling for clarity over the regulatory landscape, there are opportunities for both the Conservatives to make their mark and for Labour to carve out fresh ground for putting the UK on the front foot.

All eyes on GE2024

2023 is set to be the tell all year. Sunak and Starmer are facing the toughest set of challenges any leader, especially a newly incoming Prime Minister, have faced for decades. How they respond to and address the economic turbulence and address the nation’s discontent will ultimately determine their fate at the ballot box.

While Labour may be 20 points ahead in the polls, Sunak’s momentum over the summer appears to have closed a once-gaping gap. However, unless either party makes marked progress on the issues of the year, the prospect of a hung parliament with a minority government will become a looming possibility.

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UK and Japan – The Quiet Relationship

An island nation, obsessed by tea, known for the politeness of its people and with a hereditary sovereign as head of state. Add the sight of cars driving on the left, school children in uniforms and pubs in every town and there is only country in the world that you could possibly be thinking of.

You would think.

In fact, there are two countries you could be thinking of. The UK or Japan. The island monarchies share similar drinking habits and traffic quirks as well as a long history and a significant economic relationship.

Not that you would know it from reading the news. Missives from political correspondents in Washington D.C. and spats between the UK and France provide much more saleable copy. But that is no reason to ignore the fruitful relationship between East and West. Ever since Margaret Thatcher’s visit to Japan in 1982, the UK and Japan have enjoyed a quiet, steady-as-she-goes relationship that is both strong and stable (to coin a phrase).

If the relationship lacks the drama of the UK’s bonds with its European or North American friends, it shouldn’t be overlooked as a place for low-risk growth opportunities and expansion.

Let’s look at the numbers.

The total value of trade between the UK and Japan to the end of June 2022 stood at £24.6 billion, an increase of nearly 22% since 2012. Total trade before the Covid-19 pandemic was admittedly higher than it is today, reaching £28.8 billion in 2019, but this is par for the course. Total trade grew by 0.6% between 2021 and 2022. The green shoots of recovery are there.

Foreign Direct Investment tells an even better story. Between the vote to leave the EU in 2016 and the Covid-19 pandemic in 2020, investment into the UK from Japan more than doubled from £45.5 billion to £102.3 billion. Over the decade since 2011, inward investment to the UK from Japan has grown nearly fourfold. The decrease in the value of sterling against the yen has, of course, been a major contributory factor. The fall in the pound from just over ¥195 in August 2015 to a low of ¥125 in March 2020 has made investment in the UK significantly more attractive.

But there are other reasons to be optimistic about the opportunities the relationship creates. The UK-Japan Comprehensive Economic Partnership Agreement, signed in October 2020, was the first trade agreement the UK signed outside of the EU with any country. It provided an important political signal of intent between London and Tokyo: that practical economic considerations would win out over any political posturing following the UK’s exit from the EU.

Japan’s enthusiasm for the UK’s application to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is a further sign of the value that Tokyo places on London’s contribution to international trade and politics in the East. Japan’s Economy Minister, Yasutoshi Nishimura, said that “the importance of Britain as a strategic partner and the expansion of the high-level rules beyond the Asia-Pacific are extremely important.”

Since 2018, British troops have also participated in training exercises in Japan with the Japanese Ground Self-Defence Forces through the VIGILANT ISLES series. In May 2022, then Prime Minister Boris Johnson and Prime Minister Fumio Kishida agreed a Reciprocal Access Agreement to facilitate UK and Japanese Armed Forces on training, joint exercises and disaster relief activities – the first such agreement for a European country with Japan. Johnson also announced the appointment of a new trade envoy to Japan, former Business Secretary, Greg Clark MP, to drive investment between the two countries.

Emperor Naruhito and Empress Masako’s attendance at The Queen’s funeral in September was the couple’s first overseas trip since the emperor’s accession in 2019. A further diplomatic coup and a show of the enduring relationship between the royal families.

Relations between the two countries are arguably stronger now on the economic, military and diplomatic front than at any time since the Meiji restoration in 1868. The ever-closer relationship between London and Tokyo puts the stability of Japanese investment in the UK in good stead over the medium to long term. For investors, the opportunities that stem from this relationship should not be ignored – even if they don’t make the headlines.

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A tale of two speeches

Just three working days into the new year we have been treated to set piece speeches from Prime Minister Rishi Sunak and Leader of the Opposition Keir Starmer on consecutive days. Both had similar objectives: seize control of the news agenda; establish their domestic policy priorities; and persuade the electorate they are the right choice to tackle the very significant challenges the UK now faces.

However, they were coming from two very different starting points. Sunak is rushing to catch up with events, having rapidly and unexpectedly secured the Premiership in the midst of a political and economic crisis which has quickly been succeeded by an NHS crisis. Starmer has been building towards this moment for the last three years and has a significant lead in the polls he is looking to protect.

So how did they do and what are the implications for businesses planning their political engagement in 2023?

Structure and delivery

Sunak

The unorthodox nature of Rishi Sunak’s rise to power left him with the tricky task of trying to set out the defining principles that will guide his premiership while simultaneously acknowledging the short term priorities required to address the crisis in the NHS. He also tacked on a series of specific promises that he is aiming to deliver around the economy, the NHS and the small boats issue. This resulted in a speech that jumped across a number of different topics but lacked a core theme and clear narrative. His delivery of the speech itself was a little wooden but he performed relatively well in the extensive Q&A that followed.

Starmer

Starmer’s core message was simple: Labour is a credible Government in waiting that will devolve power, working in partnership with local government and business to tackle the UK’s long term challenges. It was a relatively well crafted and delivered speech that served as an effective critique of ‘sticking plaster politics’ from the current government. Unlike Sunak, Starmer has had the benefit of three years to prepare for this moment and he was able to draw on a lot of principles and ideas that have already been previously set out.

Policy content

Sunak

The Prime Minister set out five ‘promises’ that will frame the Government’s immediate priorities in the coming months: halving inflation this year; grow the economy; falling national debt; falling NHS waiting lists; new laws to stop small boats carrying migrants across the channel. While some have noted that these are largely in line with what independent forecasters are already predicting, the promises on inflation and growth in particular risk being significant hostages to fortune given how little control Government has on external, often global, events that drive economic trends.

Beyond this, the headline pledge was for all students to study maths in some form until the age of 18, with the implementation details yet to follow. Other significant sections of the speech on innovation, law and order, education and the NHS all lacked any new policy announcements, though referenced measures detailed in last year’s Autumn Statement.

Starmer

Starmer’s speech had a major focus on how Labour would take a different approach to running the country based on devolution of power and partnership working with local government and business. However, there was only one significant new policy announcement: a ‘Take Back Control’ Bill that would form the centerpiece of his administration’s first King’s Speech. The Bill will devolve powers over employment support, transport, energy, climate change, housing, culture, childcare provision and council finances with a further ‘right to request’ power for local communities also built in.

In addition, he nodded towards a series of ‘national missions’ to be published in the coming weeks that will frame Labour’s policy platform in more detail. Also of note, there was a very clear message that Labour won’t fall back on a ‘big Government cheque book’ approach in an effort to assert fiscal credibility.

Impact and implications for engagement

Sunak

There was some criticism that Sunak did not focus more on the immediate challenges facing the NHS and the industrial relations issues that are crippling the UK’s rail system. However, the five promises he set out do provide a litmus test against which he can ask voters to judge him. If he can demonstrate progress in these areas in twelve months from now, then he can start to build narrative of delivery that serves as platform for an election campaign.

Ultimately, this speech underlined just how much the next election is starting to dictate the Government’s approach. Sunak set up a small number of simple, measurable goals and it is clear that anything that can’t be shown to contribute to meeting them between now and the election will be far less likely to receive time and attention from Government. There was also a reminder of his personal focus on innovation as a key to driving productivity and growth – companies that can demonstrate a positive story on innovation are more likely to have success attracting the attention of No 10.

Starmer

The short term headlines that Starmer’s team would have hoped for have largely been torpedoed by the leaks from Prince Harry’s book. However, expect the ‘Take Back Control’ slogan to feature heavily as a core theme in Labour’s narrative this year as they seek to demonstrate to the electorate that they have taken the lessons of Brexit on board. While this was a speech that demonstrates progress in his mission to become a credible Prime Minister in waiting, there is plenty of work still to do. Labour’s current comfortable poll lead comes on the back of a terrible few months for the Conservative Party and with the electorate facing extremely challenging economic circumstances. If the economy improves and Sunak is able to claim some credit, then Labour will need to show much more of a positive alternative agenda in order to maintain such a strong lead.

That places a lot of emphasis on the forthcoming ‘national missions’ to add further definition to Labour’s offer. Business should be prioritising its Opposition engagement on influencing how these missions are framed and the detailed policy ideas that will be needed to support them. Starmer boldly stated that he wanted to change the ‘old game of passionately identifying a problem’ without providing solutions. His biggest risk is falling into exactly this trap himself and his team will need the help and expertise from business to avoid it if he wants to build a truly robust alternative programme for Government.

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UK and China – Happily Never After?

The UK and China were once good friends. Or so we were led to believe. Speaking at the Shanghai Stock Exchange in September 2015, then Chancellor of the Exchequer, George Osborne, spoke about creating a ‘golden age’ in Sino-British relations.

A month later, President Ji Xinping paid a state visit to Britain which included a ride down The Mall with The Queen and a lavish banquet in his honour at Buckingham Palace. Ensconced between The Queen and the Duchess of Cambridge at the banquet, President Xi could justifiably feel that his country had found its bestie in the West.

In 2018, the Chinese Ambassador to London talked about turbocharging relations even further. He wanted to put the golden age into “higher gear”, he claimed, and build “an even brighter future for the people of our two countries”.

It all seemed so rosy and the future for investors looked so promising.

But fast forward to 2022 and the geo-political landscape is unrecognisable. The Golden Age has turned into an Ice Age – a period of recriminations, grievances and conversations labelled ‘frank’ in diplomatic circles. Investors would be right to be wary.

Demonstrations in Hong Kong, concerns over Huawei’s proposed investment in strategic infrastructure, human rights abuses in Xinjiang, the Covid-19 pandemic, and scenes of the Chinese police beating a BBC journalist are hardly propitious foundations for friendship. President Xi, who has secured an unprecedented third term as leader, has also doubled down on an assertive foreign policy. He rails against so-called Western ‘bullying’ and is pushing a repressive domestic agenda intent on eradicating Covid-19. The two governments now view each other with grave mistrust, with Prime Minister Rishi Sunak stating that the “golden era is over, along with the naïve idea that trade would automatically lead to social and political reform.”

The politics, in short, bode badly for the future. The economics, however, tell a different tale.

Trade volumes between the UK and China have increased by 27% over the last four years. Total trade in 2018 stood at £73.2 billion, rising to £86.8 billion in 2019 before falling during the pandemic and rising again to £93.1 billion in 2021.

Maybe that’s because the UK and China can’t afford to let political fights upset their economic relationship. The downturn in the UK economy is well documented. GDP growth fell 0.3% between July and August and the UK economy is smaller now than at the start of the year. Former Prime Minister Liz Truss’ efforts to turn the tide were met with widespread disruption in the financial markets, with the Bank of England stepping in to support the bond markets, and mortgage interest rates rising to their highest level in 14 years. It’s also a difficult time for private markets: the UK economy is officially in recession.

If things are bad in the UK, prospects in China are not much better.

The Chinese economy used to be the thing of myth, with growth that made Western leaders salivate at the prospect of getting a slice of the pie. Annual growth in the Middle Kingdom saw a clear upward trajectory in the late 1990s and early 2000s, reaching a peak of 14.2% in 2007. But ever since, the Chinese economy has been distinctly less appealing. China has recorded a steady decline in annual GDP growth since 2007, falling to 6% in 2019 and temporarily plunging to 2.2% in 2020 – the pandemic year. While growth of 6% in 2019 (and over 8% in 2021) may still sound tempting to some Western leaders, there is more trouble looming.

This year, the yuan fell to its lowest rate since 2008 and the national youth jobless rate hit almost 20% in July. Even official statistics shows that China’s manufacturing PMI has only been above 50% for four months of 2022 – any figure below 50% shows a reduction in activity – with manufacturing PMI in October standing at 49.2%. JP Morgan also forecasts year-on-year GDP growth in the final quarter of the year to stand at 2.7%, down from a previous forecast of 3.4%.

The property market in China is in turmoil too. Year-on-year, property sales fell by over 23% in October and property investment has declined by 16%. In August, house prices fell by 1.3% – their fastest decline in seven years. Chinese policymakers have attempted to sweeten the market by cutting the five-year loan prime rate that underpins mortgage lending to 4.3% and relaxing the floor on mortgage rates for some first-time buyers. But the bitter taste of an undercooked pie still lingers. The property crisis took a trillion dollars off the value of the sector last year.

But investors should steady their nerve. As their economies stutter at home, the UK and China need to keep in with their economic partners overseas. The Prime Minister may continue to view China as a “systemic challenge to our values and interests” but he also claims that we “cannot simply ignore China’s significance in world affairs”. Significant material restrictions in trade have yet to materialise, despite tensions between London and Beijing. Economic reality, it seems, trumps political posturing. UK firms exposed to Chinese investment will be able to rely on firm support from their Asian trading partner for the foreseeable future and trade between the UK and China will continue to boom. Even if President Xi won’t be enjoying another carriage ride down The Mall anytime soon.

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What will WA be reading this Christmas? It’s (probably) not what you think.

As we near the home straight before the Christmas holidays, we asked a few of the WA Communications team for details on which books they were looking forward to curling up with over the break. Expectations were high – perhaps a weighty biography of a political giant, some niche political philosophy or even some hard-hitting political fiction.

The subsequent list, however, is not quite what we expected. Rather than Hobbes, Locke or Marx, colleagues at WA will be delving into an eclectic (some might even say eccentric) but diverse mix of material.

Perhaps understandably so – 2022 has been quite the political year of scandal and crisis, ending with the unexpected appearance of Matt Hancock on ITV’s I’m a Celebrity… Get Me Out of Here! Politics in 2022 has certainly proved that truth is stranger than fiction.

As the WA team looks forward to the Christmas holidays, it’ll be all about escapism. In the words of one colleague, “I have definitely had enough political drama for one year!”

Empire of Pain: The Secret History of the Sackler Dynasty by Patrick Radden Keefe – Max Taylor-McEwan, Senior Research Consultant

Empire of Pain is about the history of the Sackler family, the opioid epidemic in the US and the role of advertisement in the medical profession. Along the way it focuses on greed, corruption and some of the hefty donations aimed at white-washing reputations. The book was recommended by a friend’s stepdad who ran around the house looking for it and is evidently too good not to share. I can’t wait to get stuck into Empire of Pain to understand the backstory to a crisis that has knocked months off the life expectancy of the average American.

Dominion: The Making of the Western Mind by Tom Holland – Lee Findell, Partner & Head of Corporate Communications

I’ve had this book on my bedside table since last Christmas when I first started reading it, but I am now determined to read Dominion in full this time round. It is a tour-de-force on the history of Christianity and its impact on the world. Tom Holland is a superb author of popular history books and a co-host of my favourite podcast, The Rest is History.

Shades of Grey by Jasper Fforde – Ellie Naismith, Senior Account Director

Shades of Grey is set in a post-apocalyptic world where social standing is determined by your perception of colour and there is a huge black market in illegal spoon trading. The book is a comedy, a romance, a fantasy and a parable on the risks of seeing the world in black and white when the world is really all shades of grey. Fforde has a cracking and surreal sense of humour and is one of my favourite authors. I will be re-reading Shades of Grey ahead of the long-awaited sequel, Red Side Story, due to be published in the new year.

Freezing Order by Bill Browder – James Allan, Research Executive

Browder’s first book, Red Notice, was an easy read but a gripping page turner. Published earlier this year, Freezing Order continues his first-hand account of running a hedge fund and becoming Russia’s largest foreign investor during the early 2000s. Dubbed ‘Putin’s no.1 enemy’ after taking on corrupt officials and the Russian oligarchy, Browder was the driving force behind the Magnitsky Act in the US. Named after his lawyer who was beaten to death in a Moscow jail, the Magnitsky Act became law in many other countries, including the UK, legislating for a sanctions regime against individuals who commit the worst human rights abuses.

The Master and Margarita by Mikhail Bulgakov – Jovana Vuletic, Research Executive

The Master and Margarita is unmatched in its weirdness and breath-taking originality of thought, whilst masterfully mixing elements of political satire, dark comedy and magical realism. It symbolises dissidence and was written during Stalin’s reign of the Soviet Union but published 30 years after. It also unpacks the idea that the good and evil of this world are symbiotic, and aren’t necessarily on opposite sides of the spectrum. A really useful and interesting lens through which to view present-day politics.

The Highway Code by HM Government – Lizzie Wills, Partner & Head of Investor Services

I have decided that 2023 is the year I finally learn to drive, so I will be curling up in front of the fire with a copy of The Highway Code. I’m not sure if it is going to be as full of intrigue as some of the political biographies that I could pick, but I have definitely had enough drama for one year!

The Whale Who Wanted More by Rachel Bright – Thea Southwell Reeves, Account Director

Like many parents of young children, I religiously bring my day to a close surrounded by a mountain of children’s books and snuggled up with a bleary-eyed toddler pleading for ‘one more story, mummy’. This Christmas, as my almost-2-year-old starts to understand the festivities and gets overwhelmingly excited about presents, I will be reading him Bright’s stunning undersea tale of friendship and contentment. Humphrey the whale is on a quest: to find the one perfect object that will make him feel complete. He roams far and wide, gathering endless treasure as he goes. Yet, no matter how much he accumulates, Humphrey still isn’t happy. It reminds us that friendship, family and community, not our possessions, is what makes our heart sing. Bright perfectly captures a wonderful message to pass on our little ones at this time of year.

The Devil You Know by Eileen Horne, Gwen Adshead – Alice Humphreys, Senior Account Manager

Authored by a psychotherapist, The Devil You Know follows Horne’s work at Broadmoor prison and compiles a series of conversations with people labelled ‘monsters’ by society – whatever their crime, she listens to their stories and helps them to better understand their terrible acts of violence. Supposedly, the book will challenge ‘everything I thought I knew about human nature!’

My Fourth Time, We Drowned By Sally Hayden – Bella Wallersteiner, Account Director

With unprecedented access to people currently inside Libyan detention centres, Hayden’s book is based on interviews with hundreds of refugees who attempted to travel to Europe but found themselves trapped in Libya once the EU began funding interceptions in 2017. This book shines a light on the resilience of humans and in times like these, the power of testimony cannot be overstated.

The Blue Lotus by Hergé – Thomas Sharpe, Account Director

Getting in touch with my inner Frenchman (or is that inner Belgian?), I am going to get stuck into Hergé’s The Blue Lotus from the Adventures of Tintin. Tales of courage, daring-do and chasing villains in comic book form are a perfect accompaniment to the Christmas period. Set in Shanghai nearly a hundred years ago, the comic is beautifully illustrated and full of detail – every Chinese character Hergé included has meaning. There’s philosophy too, with mediations on life and friendship. Definitely worth a read!

The Five Giants: a biography of the welfare state by Nicholas Timmins – Jess Prestidge, Director

Timmins charts the emergence of the modern welfare state, organising his analysis around the ‘five giants’ that William Beveridge identified as the necessary targets of post-war welfare policy: want, disease, ignorance, squalor and idleness. With the welfare safety net increasingly strained, I’m hoping that an understanding of its origin story and fitful evolution will shed new light on the choices and trade-offs politicians and electorates face today. At over 700 pages it’s a bit of a tome but given the ground covered I think that it is forgivable!

Box 88 by Charles Cumming – Amy Fisher, Director

Box 88 is a spy thriller novel. Given that I have read every Ian Flemming, Len Deighton, Ian Rankin and Mick Herron I have ever laid my hands on, it is an absolute godsend to find someone in the thriller genre who is also so page-turningly brilliant.

Harry Potter by JK Rowling – Natasha Egan-Sjodin, Associate Director

Call me a creature of habit, but I will be re-reading the Harry Potter series – ALL OF THEM! – in order.

It’s an annual Christmas tradition which started in my first year of university. I start on 1st December and make my way through until the end of the year, and I almost always end up reading the Half Blood Prince after Christmas dinner.

I’d like to opt for a more cultured and sophisticated read next year, so perhaps I’ll take some tips from this blog!

The Founding, A Gaunt’s Ghosts Omnibus by Dan Abnett – Peter Jones, Director

The Founding is a futuristic sci-fi novel set in the Warhammer 40,000 universe and is sort of a rip-off of the Sharp novels. Warhammer is a quite geeky hobby of mine which I picked up over lockdown. It involved building, painting and playing tabletop wargames with (mainly) plastic miniature soldiers. Games Workshop, the company that makes Warhammer, also publish books that go alongside the miniatures to build on the lore of the universe in which the tabletop game is set. It is pure escapism.

The Great Dune Trilogy by Frank Herbert – Marc Woolfson, Partner and Head of Public Affairs

I am reading the second Dune Trilogy (books 4-6). It is about an immortal pharaonic-style god-emperor who is half man half giant sandworm, with the power to see into the future. He has been in power for about 5,000 years and is convinced that benign dictatorship is the most effective form of government. But he is also a bit bored and so encourages rebellion in order to occasionally crush them. The Dune Trilogy is a bit of light relief after the year we’ve had.

The Silk Roads by Peter Frankopan – Gary Neale, Partner & Head of Creative

I recently read a great book called The History of the World in 100 Objects and many of the topics that came up related to the importance of the silk road. When The Silk Roads came out I made sure it was locked in for Christmas as my children don’t always know what to buy me these days. The Silk Roads is chronologically ordered and provides insights into our history and the effects of trade. From the early Mesopotamians and Chinese to the two World Wars and the discovery of oil. It features lots of different countries and time periods. By doing so, it really shows the big picture and how historical events in different countries affect each other. If you like history but find reading about it too inaccessible, this could be the book for you, even for the beautiful illustrations which really help to bring history to life. The book poses a few questions: Which Pope was ignored when he told people to stop selling Christians? Which country thought their economy and military would collapse without oil in the early 20th century? You will find the answers to these questions and more in this lovely book.

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WA supports Agathos on the successful acquisition of Targeted Provision

WA Investor Services is delighted to have advised Agathos on its successful acquisition of Targeted Provision, the market leader for provision of bespoke SEND (Special Educational Needs and Disabilities) tuition, mentoring and educational support packages for children and young people with SEND.

Agathos’ investment will help support Targeted Provision expand the business’s customer base, build its pool of exceptional tutors and continue to provide high quality support to an underserved part of the SEND market.

WA Investor Services provided political and regulatory due diligence in support of the investment, drawing on our extensive network of policymakers to provide a detailed assessment of the likely effects of the Government’s SEND reform agenda on private SEND tutoring providers. WA’s insights gave significant reassurance to Agathos and were integral to the deal process.

Tom Street, Agathos said:

“WA’s insights into the relevant political drivers have been highly valuable in supporting our investment in Targeted Provision. WA’s deep sector expertise and expert judgements helped us comprehend what is a complex policy, funding and regulatory landscape. They were able to provide analysis, information and intelligence that supported our understanding of Targeted Provision’s ability to deliver a compelling and impactful solution in what is an underserved and well-regulated part of the market. We always highly value WA’s input and look forward to future opportunities to work with them again.”

Commenting on the deal, WA Partner and Head of Investor Services Lizzie Wills said:

“We are extremely pleased to have worked with Agathos on this transaction. With our unrivalled access to key officials directly involved in SEND regulatory reform, WA’s Investor Services practice were really well placed to support the Agathos team in understanding the outlook for Targeted Provision from a regulatory and funding perspective. Demand for SEND provision continues to rise in the UK, and Agathos’ investment will undoubtedly represent an exciting new chapter for the business as it seeks to expand to meet the needs of children with additional needs. We look forward to seeing the business continue to build on an incredibly strong foundation in the coming years.”

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The UK and France – A Family Affair

The UK and France are like siblings. They may love each other deep down but most of the time they seem to be fighting it out. Always trying to outdo the other.

So it has been since 2016 – the year of Brexit – when the UK and France seem to have been at constant loggerheads. Then President François Hollande famously declared after the Brexit vote that “there must be a threat, there must be a risk, there must be a price” to the UK leaving the EU. President Emmanuel Macron continued that hardline stance, constantly criticising the arguments of the Leave campaign, opposing extensions to the UK’s timetable for leaving the EU and holding multiple ‘Choose France’ business summits to secure investment from overseas.

Events reached a nadir when, in this summer’s Conservative Party leadership campaign, Liz Truss was asked whether she considered Macron a friend or foe. Truss hesitated, smiled and looked out to the audience. ‘The jury’s out,’ she declared to cheers from the room.

Macron was asked about Truss’ remarks that same day. He paused, let out a long sigh and stifled a smile. “I don’t question it for a second: the UK is a friend of France,” he said. His face afterwards erupted into a broad grin – recognition that this was but the latest development in a very long-running family saga.

With Prime Minister Rishi Sunak at the helm, the relationship has taken a turn. At their first bilateral meeting at the COP27 summit in Egypt, Sunak and Macron were the vision of brothers reunited. All smiles, handshakes and ritual back slapping. After the event, Sunak tweeted that the UK and France were “friends, partners and allies” – a pointed rejoinder to Truss’ characterisation of the relationship.

So what do the ups and downs of British and French relations mean for business? Should investors take note?

The evidence of the last few years points to a mixed and often counterintuitive picture. The political drama of the Brexit years, for instance, had little effect on trade volumes. In 2015, total trade between the UK and France stood at £65.1 billion. It rose after the Brexit vote to £78 billion in 2017, £82.9 billion in 2018 and £84.4 billion in 2019 but fell again to £67.1 billion in 2020 – the pandemic year.

The same variation exists for Foreign Direct Investment (FDI). UK outward FDI stood at £60.5 billion in 2015, rising consistently every year to reach £85.5 billion in 2020. UK inward FDI stock stood at £69.6 billion in 2015, before rising and falling in successive years to end at £69.1 billion in 2020. The French stock market, however, has overtaken the UK’s as Europe’s most valuable. The CAC-40 has grown by 47% since 2020 while the FTSE 100 has only grown by 16%.

Steady trade volumes between 2016 and 2020 suggest that trade opportunities created by the relative weakness of the pound outweighed any loss of confidence that resulted from political hostility between the UK and France. The rally of exchanges between British and French politicians during the Brexit years were simply par for the course for business – a continuation of the long and complex rivalry between two countries stretching back a thousand years.

The variation in inward FDI since Brexit may be more nuanced, linked to broader investor uncertainty about the UK’s future outside of the EU. The disparity in the value of the French and UK stock market is more structural, linked to the nature of the businesses listed on the CAC-40 and the FTSE100 as well as recent political upheavals in the UK.

The immediate economic future for both countries is difficult but in different ways. Inflation in the UK hit 11.1% in October while inflation in France reached 6.2%. Unemployment in the UK stands at 3.6%, rising to 9.8% among those aged 16 to 24, while unemployment in France stands at 7.3% rising to 18.3% among those aged 15 to 24. Political difficulties are also plaguing the French President, with his party working with a minority government in L’Assemblée Nationale and the IMF stating that the French government should stop its “whatever it takes” attitude to support households and businesses through the energy crisis.

For investors, the key to understanding the effect of British-French political developments on investments means assessing the likelihood that the intense rivalry between the two countries and the relationship between its political leaders translates into policy changes that affect the ease of doing business in either jurisdiction.

In the meantime, the UK and France may soon be fighting it out again, with a quarter-final match between England and France in the football World Cup not beyond the realms of possibility. They could yet have another opportunity to showcase their rivalry to the world.

If you would like to discuss the UK-France relationship in more detail please contact our policy specialist Thomas Sharpe on thomassharpe@wacomms.co.uk.

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Critical investment for critical minerals

The proverb goes ‘when everyone is digging for gold, it’s good to be in the pick and shovel business.’ If the energy transition of the 21st Century bears any semblance to the 19th Century gold rush that spurred the Industrial Revolution, what then are today’s picks and shovels that investors can capitalise on? The answer… critical minerals, such as lithium used in batteries or graphite used in aerospace applications and nuclear power plants.

Why? Because reaching the goals of the Paris Agreement will require a fourfold increase of current minerals inputs for clean technologies by 2040 and hitting the global Net Zero target by 2050 will require a sixfold increase of mineral inputs by 2040. Or rather, an increase from 7 million tonnes to 27.3 million tonnes for the Paris Agreement and 42.9 million tonnes for Net Zero targets. Perhaps more alarmingly, stated policy measures drastically fall short of future demand and a lack of critical minerals risks the great energy transition that will define this century all together.

The current UK state of play is intensely risky due to global trade concentration and near exclusive reliance on imports. Of the 26 critical minerals measured against global supply risk and UK economic vulnerability, only titanium scores a ‘low criticality’, 6 score ‘elevated criticality’, and the remaining 19 critical minerals score ‘high criticality’. As key ingredients in a clean and green future, the UK is heavily exposed to a market where the top three producer countries (China, South Africa and Brazil) control between 73% and 98% of total global production of at least 18 of these critical minerals – perhaps more exposed compared to the supply chains disrupted by the Covid-19 pandemic.

Government thinking about critical minerals began in 2010 when a trade dispute between China and Japan led to raw earth mineral prices quadrupling. Although China was able to demonstrate its market dominance, it wasn’t until 2021 when UK policymakers turned their thinking into concrete policy ambitions; somewhat late to the game compared to the US which began providing direct investment in production facilities in 2018.

The Integrated Review of Security, Defence, Development and Foreign Policy (currently being revised after failing to anticipate Russia’s invasion of Ukraine) was published in 2021 and quickly followed by the Critical Minerals Strategy in 2022. A Critical Minerals Expert Committee and Intelligence Centre were created in 2022 for advisory and knowledge sharing purposes, as well as a set piece funding announcement for the world’s first refinery hub, a midstream process for refining raw earth materials, powered entirely by offshore wind.

This step change by government in setting out its high-level intentions and policy ambitions is welcomed by investors. One investor told WA that “the government strategy is required because all the capacity is currently in China who are well established… and for the UK and Europe to suddenly compete you have pile in a lot of investment.” Or in the words of another industry expert, the challenge now is “…figuring out if this signpost will actually lead to pots of gold.”

A repeated concern of the Critical Minerals Strategy is an absence of deliverables and detail. It only goes part way in providing the necessary ‘enabling environment’ to attract greater private sector investment. The government already offers a range of funding pots from which the critical mineral sector can draw, such as the Automotive Transformation Fund (up to £850m) or the UK Infrastructure Bank (up to £22bn). However, if the government is truly serious about the UK’s vulnerability in the critical minerals game it will need to significantly step-up funding, its mechanism of distribution, and reform some of structural market barriers, such as the permitting and planning process for domestic extraction. Doing so will unlock private sector activity, capital and finance across the sector from exploration, extraction to refinery both at home and from abroad. It will also crucially, de-risk investment as government policy and funding aligns ever closer with new investment opportunities.

Resolving the critical minerals conundrum will require the same approach adopted for the British success story of ‘going for wind’ in the energy market. Government support since the early 2000s in cultivating, developing, and expanding wind turbines installed offshore has established the UK as the global leader in offshore energy. Central to the government’s approach was a clear partnership with private sector finance, working together in transforming a now maturing market where electricity generated from wind power increased by 715% from 2009 to 2020, generating almost £6bn in turnover in 2019. Government support matched its rhetoric, in turn boosting investor confidence and investment opportunities in offshore wind. As for critical minerals, the sector is, comparatively speaking, at the cultivation stage and whilst government rhetoric provides much needed clarity, funding will need to speak louder than words.

We can expect to hear more from both main parties ahead of the next general election. Investors should ready themselves for a government delivery plan in the coming months which will provide further detail and timeframes, as well as a national-scale assessment of critical minerals collating geoscientific data by March 2023 – crucial for spotting domestic investment opportunities. Beyond the next general election, critical minerals will be a priority for government whichever political party wins. Just as supply chain resilience is a particular concern for the current Conservative government, critical minerals will also be an indispensable ingredient of Labour’s flagship ‘Green New Deal’.

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Return of the Online Safety Bill

The first month of Rishi Sunak’s premiership has been full of speculation about which of Boris Johnson’s 2019 manifesto pledges he will keep and which he will scrap.

One of the most contentious pieces of legislation coming down the track is the Online Safety Bill. It has been confirmed that the Culture Secretary, Michelle Donelan, is ready to present an amended version of the Bill to MPs after progress on it stalled due to recent political turmoil.

The Bill is intended to regulate social media platforms with the threat of criminal sanctions, including jail terms and fines, if firms do not regulate content. The Bill would assign Ofcom as the enforcement agency for a new “duty of care” that would be placed on platforms included in the scope of the legislation.

With the UK cementing a reputation as the capital of tech investment in Europe, implementing a regulatory framework that is fit for purpose is crucial. Regulatory stability is a core risk assessment tool that can determine the appetite for tech investment.

Coming out of Covid, countries around the world have faced economic downturns, and the tech sector has not been immune. Many firms have cut their online advertising budgets and now some of the largest tech businesses, including Amazon and Meta, are laying off staff.

Investors have also piled on the pressure to cut costs, accusing tech firms of being too slow to react to warnings of an economic slowdown. Now that tech companies are not growing at astronomical rates, investor scrutiny has swung to profitability.

Many investors, faced with inflation, and rising interest rates, are gravitating towards more traditional sectors like energy and consumer staples that deliver tangible goods, make a profit and reward shareholders. Staple stocks are often viewed positively by investors during times of economic uncertainty.

There are obvious headwinds in 2023 for tech companies, and with this backdrop of instability, it is even more important that the sector keeps up with regulatory changes.

Tech businesses have been calling for legal clarity during the period of extensive parliamentary scrutiny of the Online Safety Bill so that they can prepare for the new regulations. New laws contained in the Bill will be applied to companies that host user-generated content, such as images, videos, comments and messaging. The Government estimates around 25,000 search and user-to-user platforms will fall under the scope of the legislation.

With two-thirds of adults concerned about harmful content online, the Online Safety Bill presents an opportunity for investors looking to generate healthy returns in the UK tech space. Tighter regulation will drive out bad actors and grow market share for well-regulated platforms, and there will be a cooling-off period before enforcement activity is initiated, minimising the risk of hefty fines. An online safety regime that is workable and adopts the Government’s aims of addressing illegal content online would make the UK a safer environment for users, where tech companies will have clear responsibilities and greater accountability.

The proposed framework includes giving the regulator powers to compel tech companies to publish annual transparency reports on the content on their platforms. This will incentivise online-service providers to become best in class and allow investors to make informed choices.

Better intelligence sharing on evolving online harms will enable tech businesses to develop products that are safe and less exposed to risk. The Bill proposes a “Safety by Design” framework that’s intended to help companies include online safety features in new apps and platforms from the start of production.

Tech regulation is often presented as a problem child, but it could tackle many of the challenges the digital economy faces. Regulation brings certainty and is critical to value creation. Failing to keep on top of evolving technological trends and threats could have major implications for UK based tech businesses, particularly when other countries are bringing in their own regulations.

There is a fear that the Online Safety Bill could hurt small businesses by hitting them with additional costs, but any teething issues are expected to be temporary and in the long-term, it is anticipated the Bill will boost the competitiveness of smaller tech firms as it disproportionally impacts Big Tech. Curbing the influence of Big Tech will present new opportunities for private equity as it will spur smaller competitors and innovation in the digital market.  If investors aspire to identify the future winners in the tech space, their first concern should be understanding the rules which will govern it.

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Autumn Statement 2022: A double-edged sword for a nation in recession

Today’s Autumn Statement paints a mixed picture for the UK, with growth, investment and long-term ambition perching on a knife-edge as Hunt announced a swathe of real terms cuts to public services and immediate tax changes for millions.

The core measures – NHS funding, short-term windfall taxes, and efficiency reviews – all point to the tough decisions a Government facing down a recession has had to take and will undoubtedly reassure the markets. However, it will almost certainly come at a further cost to the Conservative Party’s poll ratings amid fresh criticism of their understanding of the real-world impact of their policies and the OBR forecasting the largest fall in real household disposable income on record.

For Labour, today’s statement presents an immediate opportunity to go toe-to-toe with the Conservatives on the long-term vision for the country, with many of the measures announced today not due to kick in until after the next general election.

It’s all about tax

As ever, tax – freezing it, cutting it and introducing it – is the dividing line between the Conservative and Labour parties, with Shadow Chancellor Rachel Reeves MP immediately jumping on Hunt’s plan to freeze the basic rate tax threshold until 2027-28.

Coupled with the decision to reduce the threshold for higher rate taxpayers by £25,000 a year, today’s tax announcements will prove to be an unpopular move for a Conservative Party which was re-elected in 2019, committed to a low tax economy. The Government urgently needs to repair its reputation with voters ahead of the next general election, but it is unlikely these measures will do so, as it provides an immediate opportunity for Labour to cement its poll lead by going on the offensive over rising taxes and falling living standards.

Cuts, cuts, cuts

For departments now facing reduced real term budgets and efficiency pressures, the door will be open to businesses, industry voices and campaign groups offering solutions which improve the outlook for key industries and make sound economic sense.

Whilst protecting existing budgets until the end of the spending review period in 2025 is a sign of the Government’s commitment to minimising the immediate impact of the economic downturn on public services, ultimately double-digit inflation putting immediate pressure on pay deals coupled with a 2.7% reduction in funding increases going forward, points to a difficult period for a public sector that is already under considerable strain. There are also clear plans for widespread public service reform in the not-too-distant future.

However, with many of these real term cuts backloaded to after the next general election, public spending will now be a difficult territory for both parties – and particularly the Conservatives – as they tussle over long term spending commitments with voters.

Schools, the NHS and social care are cushioned

Additional funding and a public display of gratitude for schools has taken many by surprise, following speculation that the education budget would be amongst those facing a squeeze. The £4.6 billion additional funding announced today will go some way in plugging the funding gap the sector has long highlighted.

Pots of funding were also made available to the NHS and social care sector, totaling £8 billion next year. However, this was followed by an immediate double-edged sword of efficiency measures and improved productivity requirements, with a politically astute decision to announce a review by former Labour Health Secretary Patricia Hewitt to commence next year.

Having put the NHS and schools top of the priority list at the start of his speech, this double-edged sword of increased funding and pressure for future reform of the system is a microcosm for the Tory agenda.

The green agenda

Despite economic pressures, Hunt again reiterated the Government’s commitment to the 2026 COP agreement to reduce emissions, positioning the Sunak administration as more pro-environment than the Truss administration. But the energy and investment measures today suggest there is little meat on the bones for the green agenda.

A short-term windfall tax on energy companies and a new 45% levy on electricity generators might go some way in plugging the energy cost bill and reducing pressure on households, but coupled with a new tax for EV drivers, industry is likely to argue that this Conservative Government just made investment more difficult.

Difficult decisions ahead for everyone?

Taking today’s mixed bag of good news and downbeat outlooks as a litmus test for the debate ahead, there are difficult decisions ahead for senior members of both the Conservative and Labour parties as they consider their future economic policies in the run up to the general election.

The tax and spending picture outlined in this Statement will form the backdrop to an election campaign in which household budgets, long term growth and access to services are a central feature.

There are likely u-turns ahead from the Conservative Party and strongly worded criticism from the Labour Party, but ultimately with the economic realities difficult to ignore. Both parties will be in listening mode and looking for input on reform in regulated industries, the public sector and skills and innovation in order to build a blueprint for prosperity.

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Financing the future of Net Zero

Earlier this week I was delighted to attend UKSIF’s Autumn Conference, where speakers from across the financial services sector discussed key topics such as the impact of the political environment on the green agenda (spoiler – it’s big); recent changes in the regulatory landscape; and the critical role of biodiversity. Green Party MP for Brighton, Pavilion, Caroline Lucas also took centre stage to provide a no-holds barred view on the “fundamental mismanagement” of the economy and what we need to turn this ship around and hit our Net Zero ambitions. 

The discussions were wide-ranging and incredibly thought-provoking, but my top take-aways around how we are going to reach Net Zero were: 

1. The UK needs a robust regulatory framework 

Regulation, clearly designed for Net Zero and nature, which provides the right signals to finance to invest, will unleash capital where it’s needed most. If people can trust that Government regulations are here to stay, it will incentivise huge investment in sustainability – enabling the UK to re-position itself as a global climate leader and simultaneously help to solve the climate crisis. Essentially, Government support and signalling is our Golden Ticket to a sustainable future (Rishi, please take note). 

2. Biodiversity isn’t just a “nice to have” 

As Caroline Lucas so aptly put it, “nature fundamentally underpins human wellbeing.” If we continue to eradicate biodiversity, all other climate goals will be missed. While the UK has signed up to the 10 Point Plan to bridge the global nature finance gap, we still have some way to go to successfully funnel finance into this crucial area. The good news here is that the data around biodiversity is becoming increasingly accessible and with COP15 (the biodiversity COP) kicking off in less than a month – action is going in the right direction. 

3. Consumer education is critical 

Industry conversations around taxonomies (of which there are 30, globally), ESG transaction flow and ensuring a Just Transition are, of course, essential. However, what we need to remember is how to communicate this to the end investor – the general public. So much of what needs to be done comes down to behaviour change – with investors voting with their feet, asking probing questions of their fund managers and making sustainability part of the growth agenda. Consumer understanding and awareness around what Net Zero really means is low and, as WA’s recent research highlighted, confusion reigns when consumers are asked what they are actually investing in. 

While it’s brilliant to hear the financial industry unite in its desire to hit Net Zero and show that solutions really are at hand, let’s not forget that we need to bring the main audience – the end consumer – along with us. Clear communication and time spent educating the public on what the industry is doing, and why, has a crucial role to play in achieving our sustainability goals and delivering a future to be proud of. 

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The UK and India Trade Agreement: Bottom’s up!

Having conceded that a trade deal with the US is unlikely to materialise while Biden remains in the White House, the government has shifted its focus to striking deals with other big economies at speed before the next election. As Trade Minister in the Truss government, Kemi Badenoch, had reportedly been told that her priority was to secure a free trade agreement with India in time for Diwali (24 October), the deadline set by India’s Modi and Truss’ predecessor, Boris Johnson. The deadline has passed without any deal being finalised.

Investors are, however, particularly optimistic about what a trade deal with India could mean for the Scotch whisky industry, which has dominated the negotiations so far. No other nation drinks as much whisky as India but thanks to tariffs of 150% on imported liquor, Scotch whisky currently accounts for just 2% of the market. The impending deal ought to be music to the ears of Scotland’s world-famous industry and is looking especially rosy for beverage company Diageo plc, which owns over 200 drinks brands with sales in over 180 countries, including the world’s bestselling Scotch whisky brand Johnnie Walker. If the rumours are true that the UK is on the cusp of securing a cut to India’s steep tariff on imports, Citigroup has predicted that Scotch sales could rise by as much as US$ 2.9 billion.

But there’s a catch.

India may well be prepared to slash the federal whisky tariff, but Delhi’s negotiators are using it as leverage to get what they want out of the deal. In the latest plot twist, India threatened to apply $247 million of retaliatory tariffs on Scotch and other industries if Britain refuses to abandon controversial safeguards, it put in place to protect its domestic steel industry. This approach is not dissimilar to the one India took with the US – also over steel.

Publicly, the UK’s trade department says it will “only sign when we have a deal that meets the UK’s interests.” Though, privately, insiders are reportedly acknowledging India’s “dirty tactics” to push the UK into a deal that is expected to focus on eliminating goods tariffs.

Meanwhile, the UK’s services sector is having doubts that the trade deal will benefit British firms at all. In August, several business associations, including representatives from the financial services, pharmaceutical, tech and chemical industries, voiced their concerns about the speed of the talks and what could meaningfully be agreed in the time. Though we do make a lot of whisky, the UK remains overwhelmingly a service-based economy and securing strong protections for intellectual property rights and the free flow of data between the two counties were key objectives for the deal set out in the UK’s strategic approach for talks. Yet data looks to be a major roadblock to landing a deal that secures big wins for the UK’s services giants. David Henig, director of UK trade policy at the European Centre for International Political Economy, has concluded that the deal is set to be “predominantly a fairly narrow set of tariff reductions rather than anything significant that will change the cost of doing business in India for UK companies.”

The services sector has made a direct plea to the Indian government via the UK India Business Council to unravel the bureaucratic red tape that is regularly prohibitive for investors looking to set up or expand operations in India. The Council has urged India to take a broader view of priority sector lending norms for foreign banks operating in India and sought equitable tax treatment, while also flagging the increase in counterfeit product sales through e-commerce platforms as a deterrent for intellectual property owners. Even with tariff cuts on Scotch, the whisky industry has warned that a host of bureaucratic barriers will prevent the reduction from being worthwhile. Whether the Indian government takes heed, either as part of or alongside the trade agreement, is currently unclear.

The negotiations are also the source of some tension within the government. The Indian government is pushing for a significant liberalisation of visa routes for workers and students as part of the trade deal. Although some senior cabinet members may be supportive of relaxing immigration rules to help businesses fill vacancies, Badenoch (alongside Home Secretary Suella Braverman) are previously understood to have opposed proposals for a ‘freedom of movement’ agreement. How this plays out over the next few weeks is uncertain but the latest iteration of Conservative government is likely to be tentative about pushing through anything too unpopular with voters.

The Queen’s death has also added an unexpected dimension to the trade negotiations, with the debate about the Koh-i-noor diamond reignited. Shortly after her death was announced, ‘Kohinoor’ started trending on Twitter in India. The diamond, one of 2,800 stones set in the crown made for the Queen Mother which Camilla is set to wear at King Charles’ coronation, is the 105-carat oval-shaped brilliant proverbial jewel in the crown. Believed to be mined in modern-day Andhra Pradesh between the 12th and 14th centuries, the earliest record of its possession puts it in the hands of the Mughals in the 16th century. The East India Company acquired the stone in the late 1840s from 10-year-old Maharajah Dunjeep Singh. The company presented it to Queen Victoria and it was placed in the Queen Mother’s crown in 1937. The Koh-i-noor has been among the British crown jewels ever since, but governments in Iran, Afghanistan, Pakistan, and India have all laid claim to the diamond.

In 2016, the diamond was at the centre of a court battle after an NGO filed a petition asking the court to direct the Indian government to secure its return to India. At the time the solicitor-general, representing India’s government, said the diamond was a gift to the East India Company and it was “neither stolen nor forcibly taken.” However, the government later U-turned and said it would make all possible efforts to return the diamond to India amicably.

It is not publicly known if, or to what extent, the diamond has formed part of the trade negotiations. The strength of feeling among the people of India about the cultural significance of the diamond, combined with the UK’s weakening position in negotiations, have led many historians and political commentators to postulate that it might be India’s final trump card to play.

If you would like to discuss the India trade deal in more detail, please contact our policy specialist Thea Southwell Reeves on theasouthwellreeves@wacomms.co.uk.

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Cabinet reshuffle: who’s who?

Rishi Sunak has reshuffled his Cabinet, looking to restructure government round his key priorities.  

With little positive movement in the polls and his government hit by a series of distractions in recent weeks, one hundred days in, this is Rishi Sunak’s attempt to regain momentum and refocus government on his core aims.

The Prime Minister has remodelled government to reflect the areas he wants to make progress on in the next 18 months. Taking over as Prime Minister at a time of economic crisis, making radical machinery of government changes before steadying the ship would have been difficult. He has long articulated his belief that the UK is lagging behind on science, innovation and technology, reflected in what is in effect intended as a new ‘department for growth’. On energy – the policy area that dominated BEIS – it has been clear for some time that the government’s focus is on energy security and resilience.

These reforms – and the ministerial appointments that accompany them – might theoretically be the right thing to do but the big question for the Prime Minister is whether they improve his political standing heading into the crucial election period. Major departmental and personnel changes take time and focus to bed in. They’ll be judged on whether they help meet the ‘five priorities’ the Prime Minister has set out, including driving economic growth.

This reshuffle provides an opportunity for businesses: making their case against these core priorities and helping the government meet their urgent need to show positive news and progress on delivery in these areas. New departments – and the ministers and advisers in them – will look for high impact, well-packaged ideas that align with government (and voter) priorities and create early wins.

To download the new cabinet chart, click here.

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Who’s in charge of resetting Government policy?

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‘The Grown Ups are back in charge’: Analysis of Post-Truss, and Rishi Sunak’s new Government

Last week it looked like Liz Truss’ legacy might not just be the smouldering remnants of the oldest democratic party in the world, but its possible extinction altogether.

Now, it seems her parting act has been something rather extraordinary – and for once, in a good way; the Conservatives now look, and feel, like they are in a more sane and unified place than for quite some time. No one is pretending the polls predicting almost total wipeout aren’t problematic, but the acute desperation that had set in amongst many Tories during the Truss tenure has dissipated, almost overnight.

Having sailed so close to disaster last weekend and the mad flirtation of a Boris return, it was almost as if by Monday afternoon the Conservatives realized they needed to re-find their collective marbles, sharpish. Their roar of approval as Rishi Sunak got to his feet at PMQs yesterday was in stark contrast to the awful, deathly, sickly silence of Truss’ later appearances.

As a first run-out, PMQs was quite spicy, with Sir Keir Starmer going straight on the attack over non-doms and the reappointment of Suella Braverman as Home Secretary, despite her having resigned over a security issue days earlier (watchers of the Westminster runes are suggesting ‘she will blow herself up sooner rather than later’). An occasional slight twitch of the PM’s right leg might have denoted some nerves, however, there was nothing here to cause him undue bother and the performance had his trademark polish.

So, to yesterday afternoon, back to building his team. Probably the biggest surprise of the Cabinet appointments on Tuesday was Penny Mordaunt remaining in the junior post of Leader of the House; she will have expected more – unless this is just a ‘holding pattern’ in expectation of Ben Wallace’s resignation from the Ministry of Defence if he doesn’t get the Truss-promised three per cent of GDP defence spending (allowing him to resign ‘on principle’, releasing him to go after the head of NATO job, which is what he really wants).

Michael Gove regaining his previous empire puts ‘Levelling Up’ right back up the agenda. We can expect Grant Shapps to bring his usual enthusiasm to BEIS and the role gives him ample opportunity to continue his energetic broadcast appearances. Mark Harper’s return to Government in the DfT is good news; he’s universally known as a safe pair of hands and as being ‘all over the detail’. Steve Barclay’s reappearance at health means he knows what to expect, but that doesn’t make the scale of the challenge ahead any less daunting, compounded (as everywhere) by spiralling inflation.

Across the board, there is a real desire to get back to some kind of ‘business as usual’ after this summer and autumn of psychodrama, and real recognition of the need to deliver on a domestic agenda, if the Conservative Party is to claw itself back out of the electoral oubliette in which it’s managed to land itself.

Sunak’s backroom team is also extremely important – not least if they are to swerve the huge structural weakness in Truss’ team; that she didn’t have anyone who understood economic and fiscal policy. Sunak himself, and Liam Booth-Smith, his Chief of Staff, think in Excel – so that issue is at least overcome. As a clear sign of how differently this incarnation of Government is viewed by the markets, they remained overall stable when it was announced the new Autumn Statement would be delayed by three weeks, taking place in November. Imagine what would have tanked if Truss had tried to pull that one off?

Truss’ own Chief of Staff Mark Fulbrook (of Sunday Times ‘under investigation by the FBI’ headline fame) still seems intent on demonstrating real ill-judgement. His suggestion that Truss should reward her N10 team in a resignation honours list has not gone down well. That’s without going so far as to question whether those short-lived advisers would even really want it. Talking to them in the aftermath, ‘bruised’ is the word that comes up time and again. One noticeably leaner advisor darkly joked his smaller waistline was down to ‘the Liz Truss stress diet’.

There is a largely prevailing sense of being embarrassed by having been involved in any of it, and a desire to quickly leave the whole sorry period behind them.

The Government is crossing its fingers and toes, hoping they can do the same with the last three months in the public’s mind.

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WA Communications roundtable with Rob Kettell

On Thursday 6 October, WA Communications convened a roundtable discussion between Rob Kettell, Director of Commercial Medicines Negotiation and Complex Transactions at NHS England, and representatives from leading pharmaceutical companies.

The session explored NHS England’s Commercial Medicines Directorate (CMD) priorities, and how companies can work in partnership with the NHS to ensure timely access to medicines for patients.

The session was timely, given the recent and further pending changes in the leadership team within the CMD, the recent launch of the innovative medicines fund (IMF), and ahead of discussions about a successor to the voluntary scheme for branded medicines pricing and access (VPAS) that runs to the end of 2023.

To start, Rob outlined his three priorities:

  1. Access: Continuing to secure rapid patient access to new treatments
  2. Uptake: Ensuring there is consistency in the use of innovative treatments that are provided on the NHS across the country.
  3. Value: Delivering value for taxpayers by striking commercial deals for new medicines that are clinically led and commercially driven, at cost effective prices

A wide-ranging discussion followed. We outline five key takeaways below:

  1. Better, earlier dialogue between the NHS, NICE and companies has helped ensure expanded and accelerated access to innovative treatments, and this can continue to develop in the future

The growth of the commercial medicines team and with it the evolution of the commercial capabilities within NHS England has allowed for earlier and greater engagement with industry. Whereas previously, dialogue between NHS England, NICE and companies could be inconsistent and limited, there are now clear and established routes for early and ongoing communication – including a formal triage function in the CMD. This has benefited both sides, and is an approach that NHS England is keen to continue to develop.

As well as supporting new approaches to individual negotiations, it has also led to more effective horizon scanning which, in turn, has helped the CMD to work with NHS colleagues to better plan for new types of medicines, or medicines in specific disease areas, which may be ready to be appraised at the same time. For example, Advanced therapy medicinal products (ATMPs) have been earmarked as a potential priority area for the coming years, building on the NHS’ track record as a leader in Europe for cell and gene therapies

It was acknowledged that this stronger approach to partnership working has been essential in overcoming some of the more difficult recent access challenges. Securing patient access to immuno-oncology treatments and combination therapies are clear examples of cracking ‘unsolvable’ challenges when all parties work together in partnership to ensure rapid access.

NHS England is now keen to work with companies to explore how to signal areas where there is demand for innovation from the system. This can give further clarity to industry on where focus may lie in the future.

  1. A focus on primary care to meet population health needs

Rapid innovation in drug development over the last ten years has led to huge breakthroughs for conditions with high unmet need like cystic fibrosis and spinal muscular atrophy. However, the focus on innovations like gene therapies and precision medicines, which are prescribed and administered in hospital settings, has not been matched by the same focus on innovation in the primary care setting, which is needed to achieve the population health ambitions of the NHS Long Term Plan.

There is now a real appetite to explore how innovative treatments that have an impact on a wider, population-based level, in areas like as cardiovascular disease, can be brought into the system.

This may require new approaches to align value and affordability among very large patient populations. There is appetite for further exploration of how industry and NHS England can work together to find access routes for more to patients in primary care – to have the most significant impact.

  1. The CMD is keen to partner with companies to boost uptake, but must be selective

It was acknowledged that progress on boosting the uptake of new medicines has been mixed.  There have been some big successes, particularly on treatments that have benefited from funding through the Cancer Drugs Fund, but also areas where potential uptake has not been realised, or has been slower than it could have been.

NHS England – including the CMD – has finite resource, and current fiscal pressures mean there is more focus than ever on achieving value. It must therefore focus this resource towards areas which are likely to have the biggest impact. This will inevitably require a degree of prioritisation on where to focus attention.

As an example, this might include working more closely with companies on targeted uptake strategies whose treatments address longstanding health inequalities, for example, as aligned with the NHS’ health inequalities CORE20PLUS5 strategy.

  1. The CMD is driven by the need to provide value to the taxpayer across all activity

There is recognition that the pricing and revenue environment in the UK is tighter than some other countries. From an NHS perspective, this provides value to the taxpayer and supports the sustainability of the NHS – while companies benefit from the NHS model where access to more than 55 million people can follow a single successful negotiation.

The NHS commercial framework for new medicines points to the complex problems that the CMD is often trying to solve by agreeing ground-breaking and world-first deals, for example the recently announced antimicrobial subscription model.

There is clearly risk involved in facilitating complex deals that go beyond a simple discount to reach a cost effective price with NICE. Therefore, more value needs to be derived from them, ideally creating a ‘win-win’ for companies, the NHS and the taxpayer.

Value is always expected to be at the cornerstone of all decisions made and can often be generated by treatments sitting at, or below, the bottom end of the NICE QALY cost-effective range. This is the value NHS England expects going into a complex negotiation.

  1. Making the UK an attractive place to launch medicines and bring in research and development investment is a continued area of focus

In recent years, the Life Sciences Vision and the UK’s Industrial Strategy have set-out ambitions to make the UK an attractive location for global pharmaceutical companies to invest in.

Maintaining and building on the opportunities of the UK’s strong skills and science base, regulatory regime, single payer system and high levels of clinical trial activity remain key features in the government’s ambitions for global life sciences leadership.

There is clearly appetite on all sides for the pharmaceutical sector to be a key industry to help deliver the government’s economic agenda. However, industry representatives expressed their views that life sciences investment in the UK could be limited due to the rigorous focus on securing value as outlined above.

While recognising the need for value, a more holistic approach to the life sciences operating environment is becoming increasingly important for industry. There are risks to these growth ambitions if industry feels squeezed on all sides. An elevated – more unified recognition of industry’s contribution would enable UK leadership teams to make a stronger case internally for further investment in the future.

In summary:

  1. Utilise NHS England’s CMD triage function and the Office for Market Access to support with early dialogue and horizon scanning
  2. NHS England would welcome ideas and support to more effectively signal demand to the sector in specific disease areas
  3. Ensure resources are used effectively by providing detailed information and positions to NICE at pre-committee stage
  4. The NHS is looking to tackle the population health challenges set out in the NHS Long Term Plan, including by utilising greater innovation in primary care
  5. Medicines that offer holistic benefits, such as addressing longstanding health inequalities, are more likely to be considered for a bespoke NHS arrangement to drive faster and comprehensive uptake

About WA Communications

WA Communications is an integrated strategic communications and public affairs consultancy. Our specialist health practice supports clients across a diverse range of diseases at the intersection of policy, government affairs and communications, to achieve their strategic objectives.

If you would like to discuss how to best work in partnership with the NHS, contact Lloyd Tingley at lloydtingley@wacomms.co.uk.

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Back from the brink? (And a brink it was.)

As Conference got going on Sunday, one MP reflected in expectation of the PM’s speech later in the week that “The best she can do is just drone on for an hour”.

Liz Truss did an awful lot better than that in her speech on Wednesday. After what had been a torrid few days up in Birmingham, it looks like she has possibly just about clawed things back from the brink – though exactly how much breathing space it has really brought her very much remains to be seen. It is unlikely it will have done enough to completely reset where the Conservative Party currently finds itself – which, for the avoidance of all doubt, is certainly not in a happy place – whilst the polls remain so completely dire.

However, the mood in the hall as she delivered her closing note yesterday to CPC22 was positive, buoyant even, and there was plenty of enthusiastic clapping during her speech. She had an incredibly tricky three-fold task to pull off: reuniting warring Tories who are at sixes and sevens over the 45p tax U-turn and benefits uprating; convincing the public the Government is on their side, and steadying the markets.

It’s the economy, stupid

To work backwards through the three – that last one she has seemingly pulled off. The overall economic backdrop remains pretty grim. ONS figures put growth at 0.2% (we are mercifully not in recession – yet), inflation is running at 9.9% and the Bank of England interest rate is 2.25%. But the pound is – at the time of writing – remaining somewhat steady at around $1.13. Those markets received this speech an awful lot better than they did the ‘mini-Budget’ a couple of weeks ago. The clearest possible message was sent to them as the PM unequivocally committed to the Bank of England’s independence in setting interest rates, and that she and the Chancellor would continue to work together ‘in lockstep’.

To some degree it is her own fault that there has been so much speculation over the last few days that Kwarsi Kwarteng would have to ‘fall on his sword’ – she after all had told broadcaster Laura Kuenssberg on Sunday that scrapping the 45p was a ‘decision the Chancellor made’.  He is safe for now, but over the last few days has certainly shown little of the ebullience that is his leitmotif, and it will be indicative to see how quickly it returns.

His own keynote speech on Monday was extremely flat and without any announcements. He spoke again, as the PM did in her speech, of the commitment to fiscal responsibility and running a tight ship. But we don’t as yet have any more detail as to how and where more paring in public spending might land. The ‘lean state’ that Truss spoke of yesterday arguably already looks pretty skinny, and former Civil Service colleagues in various departments are extremely nervous about the ‘efficiency savings’ they are expecting to be asked to make.

In terms of total managed expenditure, the three big beasts are the Department for Work and Pensions, the Department for Health and Social Care and the Department for Education. Looked at in the round, the only real place to go for potential ‘savings’ is DWP (of which more later). Any savings from other departments – a few hundred million here, a few hundred million there – will not be sufficient to cover what the Government’s mini-Budget set out, but will still be painful.

‘We have got your back’

There were some very solidly traditional Conservative messages in the PM’s speech: the Party will always be one of low taxes; when the state plays too big a role, people feel smaller; backing business to the hilt; hard work must be rewarded and our children given a better future; our greatest days lie ahead.  It just about avoided slipping into pure sloganism bingo. There was nothing here to scare the horses, and it will have been of reassurance to the Party faithful, and the Government will hope, to the wider public.

Because it’s otherwise been an oddly policy-lite Conference – with the announcements that have been made being of a slightly motley nature, and largely in any case overshadowed by negative headlines about internecine warfare.

There was some ‘red meat’ stuff about expanding tagging for offenders and maintaining protecting single sex spaces in prisons – and the proposed curbs on public sector strikes have gone down well with the faithful and right-of-centre/middle ground media. Expanding the small business threshold from 250 to 500 employees should help cut the costs of regulation for nearly 40,000 businesses – though it is slightly less clear what replacing the existing GDPR regime with a British data protection scheme might yet achieve.

Notable by absence was anything of great note in the energy/environment space. A commitment to delivering a ‘world-leading first fusion energy programme’ by building a prototype fusion power plant by 2040 felt quite small-fry, in the scheme of things. There was also an announcement about increasing the Environment Agency’s maximum fines for water companies that illegally release wastewater and sewage from £250,000 to £250 million – but very little mention of Net Zero.

It should be noted, also, that the Government’s three priorities have changed. They used to be growth, energy bills and the NHS.  They are now ‘GROWTH GROWTH GROWTH’ – though the Health Secretary and Deputy PM Thérèse Coffey did come in for a good dollop of praise from the PM, and a reiteration of the commitment to two-week GP waiting times. There has also remained throughout Conference a (verbal at least) commitment to the Levelling-Up agenda.

Keeping the show on the road

Many MPs just didn’t bother to go to Conference, and some of those that did (and are certainly not usually of the rambunctious variety) were a mixture of bitterness, anger and something akin to resignation (“it’s fatal, the damage has been done”).

These are the same folk who will be returning to Parliament on Monday – and will be needed to support the PM’s agenda as it further takes shape. If planning reform – as the PM yesterday intimated – is to be one of the first big ticket items, the whips are going to have their work cut out. On that front, enforcing Party discipline seems rather much focused on the ‘stick’ side of things at present. If a few carrots don’t materialize, things are going to fall apart very quickly.

Even leaving aside the backbenchers (it was only ever a matter of time before big beasts Gove and Shapps went rogue) the fact Cabinet at this point seems to be only somewhat loosely keeping things together is extremely problematic.

Admittedly the PM was the one who drove a coach and horses through the notion of collective responsibility when she let drop that Cabinet hadn’t discussed the 45p rate.  But even so, to have a serving Cabinet Minister in the form of Penny Mordaunt apparently pre-rebelling over the benefits reform (and whether uprating is pegged to wages or inflation – the former amounting to a cut in real terms) before any decision has been announced is quite something.

The latest YouGov polling puts Truss at minus 59 approval rating (Boris’ at the end was minus 53).  So, the Conservatives have three options. One: leave her there and hope things get ‘better’. Two: somehow engineer a coronation replacement and cross fingers that the country wears its fifth PM in six years. Three: throw it all up in the air, call a General Election, force Labour to take control and deal with the world as it is, with the gamble of it ensuring they only serve one term.

Options two and three do as yet still feel drastic, but the Conservative Party does somewhat, at times, have the propensity to shoot itself in face rather than the foot.

Conference might be over, but the PM’s problems certainly have not gone away.

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The Celebrity Touch: What does it mean for Private Equity?

The announcement that Kim Kardashian is setting up a private equity firm has injected some celebrity magic into the normally sedate world of alternative investments. Kardashian, best known for her role in the reality TV show ‘Keeping up with the Kardashians’, is branching out into the investment industry with business partner, Jay Sammons, formerly of The Carlyle Group.

Kardashian’s new company, SKKY, is set to focus on sectors which the TV and social media star knows well: consumer products, consumer media and luxury. Traditionalists who say it will never work should look closer. With a reported net worth of over $1 billion, Kardashian is nothing if not a savvy businesswoman.

Skims, a clothing company which Kardashian founded in 2019, was valued at $3.2 billion in January 2022. Kardashian also sold a 20% stake in her cosmetic brand, KKW, to Coty for $200 million last year. Kardashian, who boasts 319 million followers on Instagram, knows how to leverage her celebrity for financial returns.

The experience of her new business partner, Jay Sammons, will of course help. Sammons was previously Head of Global Consumer, Media and Retail at Carlyle. He was also the driving force behind Carlyle’s investments in Beats Electronics, Vogue International and Ithaca Holdings. Sammons, in other words, has previous. Combined with Kardashian’s global influence, an investment from SKKY could well support portfolio companies’ sales and see stronger market valuations.

But it’s not as if Kardashian is the first celebrity to go down this route. Others have already started down the same road. Recently retired tennis superstar, Serena Williams, entered the alternative investment space in 2014. Her business, Serena Ventures, aims to invest in founders ‘whose perspectives and innovations level the playing field for women and people of colour’. Rapper Jay-Z founded Marcy Venture Partners focusing on ‘consumer and culture with an emphasis on positive impact’. Fellow music artist Snoop Dog has started Casa Verde Capital.

What does this celebrity trend mean for sector? Are there any political risks?

Potentially.

Stateside, President Biden already has private equity in his sights. Concerns about oligopolies and private equity buying swathes of American businesses are causing disquiet among policymakers across the pond. Celebrity involvement in private equity will only draw further attention to a sector that political heavyweights already feel is underregulated.

Whilst private equity involvement in a range of sectors in the UK periodically makes headlines, the government is still in a different regulatory place to policy makers across the Atlantic. Then Parliamentary Under-Secretary of State in the Department for Health and Social Care, Lord Kamall, said last year that ‘private equity plays a role in many companies in turning them around and retaining jobs.’ Under the new Truss government, which is expected to be less interventionist from a regulatory perspective than its predecessors, we can expect this trend to continue.

The Government has been clear that there are established processes for considering public interest concerns if necessary under the Enterprise Act 2002 and the National Security and Investment Act 2021. In an economic and energy crisis, there is little appetite in government to focus attention on the private equity sector.

Yet the risk for private equity investors in the UK is perhaps more acute than in the US. Celebrity involvement in UK private equity, should this become more widespread, has the potential to raise the profile of a sector that has largely managed to stay off the government’s radar.

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The future of HIV/AIDs in the UK – ending HIV transmission for everyone, everywhere.

Undoubtedly, progress toward ending HIV is a major twentieth-century success story. Within our lifetimes, HIV has gone from a life-ending condition to being completely treatable and non-transmissible. It is a fact that a person living with HIV today who is on effective treatment can’t pass it on.

These significant advances in treatment mean that the vision of ending HIV transmission has become tangible. The UK has an opportunity to be a world leader in this space, and the government is committed to being the first country in the world to achieve zero new HIV infections, AIDS and HIV-related deaths in England by 2030. The current political turmoil and the new cabinet’s lack of appetite for prevention do not seem to have tainted a commitment to the effective implementation of the HIV Action Plan.

So where are we now?

HIV prevention is working. For the second year in a row, England met its 95:95:95 HIV treatment targets. The number of people diagnosed has fallen by 35% from 2014 – 2019, particularly among gay and bisexual men. In 2019 an estimated 94% of people living with HIV had been diagnosed, 98% of those diagnosed were on treatment, and 97% of those on treatment had an undetectable viral load – meaning they cannot pass on the infection.

Few countries can show this level of success but as we approach eliminating HIV transmission, we need to ensure that the most vulnerable do not fall through the gaps.

Last week I attended the 5th biannual National HIV Prevention conference. It was the first time so many health professionals, community experts, and researchers working in HIV prevention in the UK have met face to face since the pandemic.

There was palpable enthusiasm to maintain momentum and go further, faster and harder than ever before. And rightly so. Lives depend on this work. Professor Kevin Fenton asked attendees to ‘celebrate and recommit’ and stated that progress on the HIV Action Plan has been necessary but insufficient to end HIV transmissions in a UK context.

As the epidemiology of the virus evolves, what is the future of the fight against HIV?

Solely focusing on diagnosis as a measure of progress does not tell the whole story. Retention of people in care is key to managing HIV transmission. UKHSA estimates that between 15,000 and 20,000 people are living with transmissible levels of the virus in England. Delving into this a bit further reveals that only 24% of these people are undiagnosed, and over 7,000 people living with HIV in the UK have not been retained in care (lost to follow-up).

This problem, it seems, is much larger than was previously recognised. Lost to follow-up is now replacing those still undiagnosed in driving HIV morbidity and mortality.

Patients lost to follow-up are critically immunosuppressed, resulting in immense human tragedy. Speakers at the conference shared first-hand accounts of people presenting at Kings College Hospital with advanced AIDS, despite being aware of their status. This issue disproportionately affects women of black ethnicity from areas of social deprivation. As such, it represents a significant health inequality.

But in a country with universal health coverage free at the point of access, the question surely must be – why?

Reasons will differ on a case by case basis but can be broadly broken down into three key areas:

  1. Stigma kills. It prevents people from getting tested and accessing treatment because they are afraid. It interacts with homophobia, racism and transphobia and prevents people from meeting their need to thrive. It means that patients are treated differently by health care providers once their HIV status becomes known. All of these factors prevent access to care.
  2. The current cost of living crisis means that for some, attending appointments is simply unaffordable. Rocketing childcare and transport costs and the rise of zero-hours contracts coinciding with a huge NHS backlog has meant that logistically retention in care is becoming more difficult to manage.
  3. Some patients are more complex than others. People are individuals with chaotic lives and can experience mental health, mobility or drug and alcohol issues further complicating the matter. There is no baseline measure in place for treating complex HIV patients. The care you receive depends on the training of your physician.

So what can be done?

It’s about people and partnerships. Putting patients at the centre and working together to adopt a proactive approach to prevent people from falling out of care. Every part of the system has a responsibility to find solutions that work. Innovations in diagnosis (oral swabs) and treatment (long-acting injectables), or personalized care, such as offering flexible appointments at alternative venues and providing food and travel vouchers all have a role to play. The voluntary sector are well placed to provide comprehensive support in order ot allow clinicians to focus on the clinical aspects of care.

One thing is certain – offering patients a full range of choices is central to success.

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Brave new world: Farming solar

Sitting in the audience at a recent agri-tech conference, listening intently to a panel of farmers discussing the future of farming, I was struck by how much of the conversation was centered not on harvest, yields or livestock, but instead on photovoltaic power stations i.e., solar farms.

The Fenland farmers, sitting on acres of expansive flat fields, boasted that photovoltaics left them without hefty energy bills in a cost-of-living crisis. The vertical farmers, growing herbs and salads in soilless conditions inside vast warehouses, insisted that photovoltaics reduce the carbon footprint of their otherwise eye-wateringly energy-intensive manifestation of farming. The eco farmers, down-sizing their productions to reduce the intensity with which they farm their land, claimed that diversifying is more sustainable for them and for the environment. “I truly believe,” one farmer told the conference, “that solar is the future of farming.”

There are clearly some advantages to solar farming agricultural land. It can provide, or contribute to, the farm’s energy usage, which is not to be sniffed at during an energy crisis. Any surplus energy generated can be sold back to the grid, generating crucial revenue for an industry where fewer than half of all farmers make any profit. Solar panels generate consistent yields and can be a more reliable source of income than crops or horticulture, which are increasingly affected by the changing climate and volatile weather conditions. And there is truth to the sustainability argument that reducing intensive cultivation increases future performance.

Farmers argue that they can also generate income by using the land simultaneously, commonly referred to as ‘agrivoltaics’. Sheep can graze underneath solar panels and free-range chickens can roam. Less sun hungry crops can be planted below and among raised photovoltaic panels and some fruit and vegetables can be grown. The lanes in between rows of panels can be used to increase biodiversity by planting pollinator habitat and native vegetation, providing ecosystem services. It sounds idyllic.

I found myself wondering if, given this proclamation for the future, any of them were concerned about the recent appointment of Liz Truss as Prime Minister. The answer was no. But perhaps they should be.

The expansion of solar power emerged as a campaign issue for the final two candidates in the Conservative Party leadership race. Both Liz Truss and Rishi Sunak warned of solar panels filling the UK’s highest quality farmland, joining a chorus of fellow Conservative MPs who have recently described solar projects as perils for rural communities and food supply. Truss told one hustings event “Our fields should be filled [with] our fantastic produce…[they] shouldn’t be full of solar panels, and I will change the rules.”

This idea is not new. For months, backbench Conservative MPs have been speaking out against new ground-mounted solar power projects, often citing local campaigns against projects in their constituencies. Among them is Matt Hancock, a former energy minister, who stood with local campaigners to protest a 2,500-acre solar farm in his constituency.

The government’s energy security strategy, published in April, contained various measures to deal with the UK’s energy crisis and achieve its Net-Zero targets. This included a pledge to increase solar power capacity up to five times by 2035. However, it also included language to appease those sceptical about ground-mounted solar, pledging to “consult on amending planning rules to strengthen policy in favour of development on non-protected land, while ensuring communities continue to have a say and environmental protections remain in place.”

Politics is not the only challenge for farmers to be aware of. Obtaining a sensible cost and timeframe for the connection of a newly constructed solar farm to the National Grid can derail a project. Some estimates place the earliest connection availability for new projects at 2028-2030. Reports of solar farms sitting unused because there isn’t capacity in the grid to transmit the electricity are not uncommon, according to the National Famers’ Union. Where capacity exists, the costs can be prohibitive.

Solar photovoltaics offer a versatile and scalable solution that warrants serious thought as part of the agriculture industry’s ambitions to reach Net Zero. However, solar farms are being refused planning permission in Great Britain at the highest rate in five years and proposals that would have cut £100m off annual electricity bills have been turned down in the past 18 months. Of the 27 proposals declined between 2019 and 2022, 19 are in Conservative constituencies, which are typically in the rural shires of the country. So clearly, the politics matters, and farmers looking to enter the brave new world of solar farming would be wise to pay attention.

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‘Where’ve yer bin?’ – how Truss lost the battle for local media

When your first appearance on the media since a major economic intervention causes you to tank in the polls and face mutiny from your own MPs, then it is probably safe to assume it hasn’t gone well.

Despite many Truss detractors claiming that this was a move of arrogance – underestimating the journalistic prowess of local hacks – there was more strategic thinking at play by the Truss camp. The premise made sense when faced with a ‘Westminster Bubble’ rebellion and days before Tory conference – bypass the bubble and get straight to the people that matter – the voters.

However, if ever there was an example of a well thought through comms strategy with poor delivery, this was it. With a little more preparation, maybe some of the disasters could have been averted.

So what went wrong?

Local journalists are connected to the concerns of their local readers or listeners in a way that national journalists never can be. While the national news outlets are the scene setters of the national mood, the regional reporters are the ones with the ability to get under the skin of the real-life impact on voters. Truss simply wasn’t prepared for the local-level questions fired at her by, for example, BBC Radio Lancashire. A by-election due there soon will be dominated by fracking – banned at present but which Truss wants to allow, but only with ‘local consent.’ Presenter Graham Liver leapt on this, asking ‘what does local consent look like?’  before pointing out that the local MP, Mark Menzies was anti-fracking. Similarly, on BBC Leeds she was asked for her thoughts about the Leeds bus services. Being able to answer these kinds of a local-level questions is a must for anyone going up against regional press – Truss simply wasn’t over the detail.

With the Prime Minister only having a few seconds between each interview – and within such a short time-frame – she was on the back foot from the start. Had she appeared on one of the flagship BBC Programs, the scope for longer, more in-depth questioning would have been greater, but the fight would have been fairer. The presenter and their producers would have worked up questions in advance; Truss’ media SpAds would be working from the opposite side, anticipating the obvious questions and nailing down their defensive messages.

The reality of the situation was far from ideal for Truss – whilst she was bounced from one interview to another, the producers at each of the radio stations were able to revise questions in real time, pointing out flaws on answers given only minutes or even seconds before. With her final interview kicking off on BBC Radio Stoke at 8:52am, this gave the Stoke presenters nearly an hour of prep time where Truss wouldn’t have been able to consult her media advisors. Far from getting into any kind of ‘flow,’ the PM was left running around in circles and tying herself in knots.

The format of the regional programs didn’t just give journalists the upper hand on the questioning – it also created the perfect short sound-bites for digitally savvy national media, with the opening ‘where’ve yer bin’ question from BBC Leeds shared embedded into national articles far and wide. In what rapidly became a national media blood bath, even the pro-Truss Telegraph struggled to defend the performance, while the Independent led with a simple ‘Seven best local radio takedowns of Liz Truss as she fails to defend ‘disastrous’ mini-budget.’ In a world of clicks and shares, the articles practically wrote themselves.

While Truss isn’t renowned for having the media flair of Johnson or even Sunak’s smooth delivery, it was something she was widely reported to be working on, with her performance throughout the leadership contest getting markedly better. However, this interview round showed a Prime Minister still clearly uncomfortable in front of a microphone, and lacking Johnson’s flexibility and ability to pivot away from difficult questions.

The result was a stilted performance that, by the fourth round of questioning started to sound more like an actor rehearsing their lines than the bold, trailblazing leader of the Tory revolution that party members voted for.

 

 

 

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Is Labour Back?

There is a clear change of mood within the Labour Party. This year’s Conference didn’t feel like a party still riven with the internal battles of recent years. Keir Starmer has complete control of the National Executive Committee and party machine, the ‘grownups’ are running the show and the suited young men and women, and corporate sponsors are back in force.

Importantly, following the Conservatives’ disastrous fiscal event and consequential Sterling crisis at the end of last week, there is also genuine belief seeping back into the assembled activists, councillors, MPs, and shadow ministers, that their years of opposition could be coming to an end.

Some key take-outs included:

As things stand, and buoyed by commanding leads in all polls, Labour look set to form the next government. This comes with huge expectations and pressure. They need to be providing their answers to the overwhelming challenge facing the country, which are only set to get worse over the next 12-18 months.

For business, it’s no longer just about just ‘paying attention’ to Labour, it’s engaging with the people, priorities and policies that are looking increasingly likely to be those of the next government.

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What the new integrated care model means for specialised services

In July this year, the Government passed the long-awaited Health and Care Act 2022. A major part of the legislation was designed to drive integration of local services with the aim of enabling areas to adopt a preventative approach that focuses on population health.

After many years of movement in this direction, 42 Integrated Care Systems (ICSs) were formalised and tasked with bringing local health services together to provide more joined up care. Unlike unpopular health system reforms of the past, the broad consensus is that this reform is both important and progressive. Indeed, this was a reform that NHS England itself had called for.

However, major changes to specialised commissioning have raised concerns. In particular, patient groups have many questions around the impact these changes may have on the day-to-day care of people living with complex conditions.

Previously, NHS England commissioned many specialised services. As a result of the Act, the majority will now be commissioned locally by Integrated Care Boards (ICBs).

But complex conditions need complex care. The move to local commissioning is risky, mainly because a population management approach is not suitable for rare and complex conditions and commissioner expertise may be lost in the transfer.

Against this backdrop, WA Communications has been working with Muscular Dystrophy UK, the charity for the 110,000 people living with muscle-wasting conditions in the UK to understand the situation better.

Together, we’ve been exploring how ICSs should approach their new commissioning responsibilities to ensure people with muscle-wasting conditions receive best-practice care from 2023.

It’s vital that ICSs get this right, so that patients with muscle-wasting conditions experience at least a maintenance, or at best an improvement, in their care.

Our work culminated in a report, based on insights gained through workshops with clinicians and an APPG on Muscular Dystrophy meeting. The report can be accessed here. We identified three key areas that ICSs need to focus on:

  1. Building understanding: Inevitably, ICS commissioners and community clinicians may be less familiar with muscle-wasting conditions than specialist commissioners. However, it is fundamental to the commissioning and provision of good care that there is appropriate understanding of the condition and the level of care required. Finding ways to rapidly boost knowledge must be a priority.
  2. Holistic approach: There is a real opportunity for ICSs to improve care due to their in-built, joined-up approach. This means moving away from a sole focus on medical care to one that includes social care, education, physical activity, all of which takes place closer to home.
  3. Data: High quality and regularly updated data are vital for oversight of the quality of care, service planning and improvements. NHS England could support effective local commissioning through the creation of a data dashboard across ICS regions. This could outline key datasets for muscle-wasting conditions, such as condition prevalence, time and route to diagnosis, mortality, admissions and treatment.

You can download the full report here:

The new integrated care model and muscle-wasting conditions: How Integrated Care Systems can implement best-practice

Change of this nature is never easy, especially in a period of financial constraint and workforce pressures. However, focusing on the opportunities for better, more joint-up care – ideally backed up by robust data – could deliver important outcomes for people with muscle wasting conditions. Because ensuring the best possible integrated care for patients with all complex conditions can only be achieved through collaboration, communication and consistency.

We have been proud to support Muscular Dystrophy UK in this important pro bono project. You can read the full Muscular Dystrophy UK report on The new integrated care model and muscle-wasting conditions: How Integrated Care Systems can implement best practice here. If you are interested in learning more about how we can help you, please get in touch with carolinegordon@wacomms.co.uk

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Like pulling teeth: has the government finally got to grips with dental contract reform?

More than a decade after the coalition government announced its intention to reform the dental contract in England, action may finally be on the horizon. The new Health Secretary Therese Coffey has announced her focus will be on “ABCD: Ambulances, Backlogs of routine treatment, Care, Doctors and Dentistry.” It is no secret that NHS dentistry has been facing a growing crisis, with patients across the country struggling to access treatment due to the number of dentists moving to the private sector. Coffey’s challenge is significant – stabilizing the system and restoring public and professional trust in a system that has seen a number of false starts in the quest for a new dental contract.

The current dental contract has long been criticized by dentists for its sole focus on activity, which reimburses dentists for the volume of activity ‘units’ they complete. Dentists argue that this process is overly simplistic, and prevents them from focusing on preventative treatment, as they are financially incentivized to carry out more invasive work.

To remedy this, in 2015 the coalition government announced the launch of two new prototype contracts, with the aim of reducing dependency on activity as the only means of measuring activity and allocating funding. After the timetable for reform was pushed back repeatedly for a number of years, the government announced it would abandon the protypes in March 2022 and would work to find an alternative means of reform.

Against this backdrop of long term uncertainty, NHS dentistry has struggled to recover from the disruption caused by Covid-19, and is now suffering from an accessibility crisis. Since the pandemic, many practices have been operating at full capacity with patients waiting months for an appointment. At the same time, dentists are leaving the NHS, with over 2,000 ending their NHS contracts in 2021 alone. This leaves those remaining struggling to keep pace with demand. Currently, 90% of dental practices in England are unable to take on new patients, driving patients to the private sector (where they can afford it).

In July 2022 the Johnson government announced some significant revisions to the contract, with the aim of stabilizing NHS dentistry. These changes included establishing a new minimum UDA value, which increases the amount dentists will receive for their work, funding practices to deliver more work where possible and removing some of the barriers preventing dental therapists from carrying out treatment.

The reforms have been largely well received, but some sector leaders have warned that they lack the ambition to truly solve the issues the sector faces. Nigel Edwards, Chief Executive of the Nuffield Trust has argued that ”a lack of investment and misalignment between costs and funding have made it increasingly unattractive to be an NHS dentist. The resulting exodus of dentists has fuelled growing waiting times. While more money to help high-performing dental surgeries see more NHS patients is helpful, it does not address the problem that many areas in England have little or no access to an NHS dentist.” This view is shared by the British Dental Association, which has warned that the changes will not stop the ongoing exodus of staff from NHS dentistry, or solve patient access issues.

We may have already seen some preliminary reform to the dental contract, but Coffey’s very public focus on dentistry as an issue indicates that further reform is on the horizon for the NHS dental sector, an admission of how much change is needed. It also potentially signals that dentistry, long seen as a Cinderella service in comparison to other parts of the health system, may finally be getting the recognition and attention it needs to be able to secure real and lasting change.

In the meantime, however, more dentists are likely to switch their focus to private practice, in turn driving those who can pay for dental treatment to do so. The government is unlikely to seek to alter this dynamic and is likely to instead focus on addressing the lack of NHS dentists taking on new patients to attempt to stem the accessibility crisis.

Solving the issues facing the dental sector is no mean feat, but in putting the issue so high on the political agenda, Therese Coffey has indicated that there is now a feeling of greater urgency in finding a solution to long running issues affecting the sector. Regardless of what this change looks like, demand for affordable, accessible dental care will remain extremely high, particularly for patients who are unwilling and unable to pay high prices for treatment in light of the growing cost of living crisis.

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What does the Truss Premiership mean for private equity investment in football?

Truss’ in-tray is bulging as she enters No.10, and although a World Cup win in Qatar would undoubtedly inject a much-needed boost of morale to the long, bleak winter ahead, football is unlikely to be at the top of her to-do list.

But love it or loathe it, no one can deny the Premier League’s role as a significant source of UK soft power and, increasingly, world football’s dominant financial power. The 2022 summer transfer window is a prime example; Premier League clubs spent around £1.9 billion, pulverizing the previous record of £1.4 billion set in 2017. Put another way, England’s top twenty clubs spent more than all clubs in Spain’s LaLiga, Italy’s Serie A and Germany’s Bundesliga combined. The UK government plays a major role in creating a favourable political and regulatory environment for football’s finances to thrive, and under successive Conservative governments, that’s exactly what’s happened. Truss, as former Trade Secretary, will be acutely aware of the league’s status as one of the UK’s most successful exports.

Nevertheless, football has found itself increasingly in the political and public spotlight in recent years, most notably with the unprecedented wave of backlash to the now aborted plans for six Premier League clubs to break away and form a European Super League. Arguably one of the biggest own goals in recent football history, JP Morgan Chase & Co had allegedly intended to back the project. In 2022, the government found itself under mounting pressure to sanction then Chelsea owner, Roman Abramovich, possibly the most well-known Russian oligarch in the UK. Whilst Abramovich was not initially included on the sanctions list in response to Russia’s invasion of Ukraine, the sale of the club for over £4 billion to a consortium led by American Todd Boehly and private equity firm Clearlake Capital, was not without controversy.

Politicians have also made notable comments about footballers in the press. In the early days of the Covid-19 pandemic, then Health Secretary, Matt Hancock, said “I think the first thing that Premier League footballers can do is make a contribution, take a pay cut, and play their part.” The decision of footballers to take the knee in support of the Black Lives Matter movement and anti-racism in the sport also received mixed political response. Truss herself, then Equalities Minister, criticized the practice, saying it was “not the right thing to do” and a form of “identity politics focused on symbols and gestures.”

This has culminated in a remarkable appetite for change, primarily driven by fans, to address the culture, governance and financial flow in the existing football system. In his overly-enthusiastic opposition to the European Super League (despite hosting the former Executive Vice-Chairman of Manchester United just days earlier and declaring it – according to a government source – “a great idea”), Boris Johnson commissioned Tracey Crouch to chair the Fan-Led Review of Football Governance. The report is not a perfect roadmap (it says very little about women’s football or the sport’s toxic relationship with the gambling industry), but its diagnoses are damning: the underlying disconnect between fans and owners, inadequate regulation, and the cavernous financial inequality between the biggest and smallest clubs. To shake this up, the review proposes the establishment of an independent regulator which would oversee financial regulation in the sport, an increased role for fans in club decision making, and a 10% transfer levy on Premier League clubs to be distributed to the grassroots game.

Although Truss previously indicated that she would back the review’s 47 recommendations, recent rumours suggest that she will now backtrack on this due to waning support amongst influential players in her own team. Johnson recognised the popular appeal of football and was fully prepared to harness it ahead of the next general election. Truss will have bigger challenges and priorities to grapple with and is likely to lack the political appetite to drive forward a complete structural overhaul of the sport.

Football’s growing fanbase

Private equity has gradually been gaining a foothold in the world’s most popular sport and will be a keen spectator to Truss’ next move. Taking a lead from the billionaire soccer fans, Middle East petrodollars, and the spate of Chinese purchases which have dominated football investment over the past two decades, private equity, credit vehicles and hedge funds now represent the latest wave of investors. The industry was once considered too risky due to eye-watering levels of debt, inflated player salaries and the unpredictability of politics and febrile fans. The threat of relegation if teams don’t perform well means that returns are never guaranteed. However, investors are finding creative ways to address this volatility. Some have loaned money to keep Europe’s high-profile clubs afloat. Others have purchased media rights, bought a stable of smaller teams, or snapped up stakes in clubs as assets in peril. In 2019, US private equity firm Silver Lake paid $500 million for a 10% stake in City Football Group, which counts Manchester City, Yokohama F. Marinos in Japan, Girona FC in Spain, and New York City football team in its collection. Some are even pursuing the Holy Grail of investing in an entire league, like UK-based private equity firm CVC Capital Partners’ venture with Spain’s LaLiga.

European football has always been cash hungry, but that has grown more acute since the pandemic kept crowds away from stadiums and left some of the continent’s biggest and most successful clubs with soaring debt. Indeed, it was the catalyst behind the failed breakaway Super League. This had left many Premier League clubs reeling at the suggestions included in the Fan-Led Review, and arguing that proposed changes would reduce the competitiveness of the league and therefore its value to the UK. Private equity investors are concerned that cascading finances down the system will impact their returns. However, in an attempt to address some of the issues highlighted by the review, many clubs are taking remedial action (such as introducing supporter ‘shadow boards’) in an attempt to stave off full frontal regulatory reform. By addressing concerns around governance and financial fluidity downstream in the system, the Premier League could alleviate some of the existing political pressures.

Whether Truss gives the recommendations a red card or not, you can’t help but sense that change is on the horizon for the Premier League. Nevertheless, there will always be a strong demand for English football and fans will continue to buy tickets. These two simple facts mean private equity is unlikely to be relegated from football any time soon.

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What are the chances of a breakthrough on the Northern Ireland Protocol?

In the early hours of 8 December 2017, a bleary-eyed Theresa May shook hands with a sleepy Jean-Claude Juncker on an interim Brexit agreement, supposedly resolving the issues around Northern Ireland. That handshake has plagued the UK’s relationship with the EU ever since.

The interim agreement was supposed to allow progress in the exit negotiations to move to other issues such as trade. For a while it seemed to do so, but recriminations soon began. In June 2018, then Secretary of State for Exiting the EU, David Davis, was actively briefing against the so-called Northern Ireland backstop. He resigned the following month. By December 2018, then First Minister of Northern Ireland, Arlene Foster, said removal of the backstop ‘has been our message from the day a backstop was conceived.’

That was then. What about now? Despite agreeing to an amended Protocol and backstop as part of a revised Withdrawal Agreement in December 2019, the British government argues that the Protocol in practice is not working as it should. Rather than maintaining Northern Ireland’s place in the UK and its internal market, the government believes that it is doing the reverse: threatening the province’s economic settlement within the UK.

With images of food shortages in Northern Ireland and complaints of burdensome customs paperwork, the UK government has evidence to back up its assertions. The EU for its part argued that the Protocol is a consequence of Brexit and the only solution to challenges in Northern Ireland.

But the consequences are more than economic. In May, the republican Sinn Fein party became the largest party in Stormont. For the first time since power-sharing in Northern Ireland began in 1998, there would not be a unionist politician as First Minister.

The second largest party in the May elections was the unionist DUP. But its leader, Sir Jeffrey Donaldson, stated that his party would refuse to nominate a deputy first minister, unless the Northern Ireland Protocol were replaced. The DUP blames the Protocol for endangering Northern Ireland’s economic and constitutional settlement with the UK and since the Executive requires cross-community consent, there can be no government unless the DUP changes its mind.

The deadline for forming an Executive is not infinite. Unless an Executive can be formed by 28 October, further elections will be held. Political instability in a constitutionally fragile province during a cost of living crisis is not an ideal situation.

But there might be light at the end of the tunnel. Vice-President of the European Commission, Maros Sefcovic, has said in recent days that the pressure of the Protocol and the restrictions placed on trade could be reduced. Checks on only a few lorries a day would be required if the UK were to agree to the EU’s new plan.

It sounds almost too good to true.

The EU’s new plan would require the UK to provide the bloc with real-time data on trade movements. According to Sefcovic, checks would only take place ‘when there is reasonable suspicion of…illegal trade smuggling, illegal drugs or dangerous toys or poisoned food’.

Will the UK agree to it? Not publicly at the moment. As well as unilaterally extending grace periods, initially intended to ease the transition for Northern Ireland and Great Britain into the Protocol arrangements, the Government has a further proposal of its own. The new Prime Minister, Liz Truss, introduced the Northern Ireland Protocol Bill in Parliament in June while she was then Foreign Secretary. This Bill would seek to unilaterally disapply those parts of the Protocol that the government believes are hampering the constitutional and trade relationships between Great Britain and Northern Ireland: customs processes, regulations, tax issues and governance.

Speaking in Parliament in her first Prime Minister’s Questions, Liz Truss re-stated her preference for a negotiated settlement but that this had to ‘to deliver all the things that we set out in the Northern Ireland Protocol Bill.’

The EU cannot countenance the UK taking unilateral action to extend grace periods and disapply parts of the Protocol and is taking legal action against the British government. Both the UK and EU have solutions they claim to be practical and logical. But neither, it seems, wants to accept the other’s solution.

Which means that uncertainty – the great enemy of investment – remains a real and present danger in Northern Ireland. The next early morning handshake to try to resolve issues in Northern Ireland is a long way off.

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“Après moi, le déluge”

They might be the words of Louis XV, but this week seem to ring metaphorically and meteorologically true as the outgoing would-be ‘World King’ remains on his holidays in Greece while the country back at home, well, seems to be falling to its knees.

Inflation at historic levels, drought, flooding, spiraling mortgage rates, rocketing food prices, the looming spectre of vast energy bills, the country brought to near standstill by the unions, the prospect of the NHS collapsing in on itself…There are extremely legitimate questions about what the Government, or at the least the Party of government is doing about any of it.

Cabinet Minister Kit-safe-pair-of-hands-Malthouse this week declared that the country is on a ‘war footing’ to enable whoever becomes PM to make some ‘quick decisions’ as soon as they come to office.  But in the meantime, the Government’s ‘grid’ of announcements seems to be continuing with August ‘business as usual’. The latest offering over the last few days was ‘number plates’ for bicycles – perhaps laudable, but a bit beside the point.

The two-horse leadership race continues for another two and half weeks. One of the lobby hacks pithily texted yesterday: ‘I’m not sure why – is there anyone out there who doesn’t know that Rishi’s mum ran a pharmacy and Liz quite likes Thatcher’. There are some calls for Rishi to do the ‘decent thing’ and concede, de facto installing Liz who should then immediately recall Parliament and introduce her emergency budget (details of which remain yet scant).

More MPs are now backing her (after several defections and recent declarations of support) than Rishi, who had been in the lead amongst Westminster colleagues at the start. His camp is outwardly dismissive of this – saying that the naked self-interest of the defectors is unlikely in any case at this late stage to mean they are rewarded with jobs.

What’s much harder for Rishi’s supporters to be so sanguine about are the polls which have had Liz a long way out front for some time now. The most recent from YouGov puts Sunak on 31% and Truss on 68% amongst those that have already voted. Conservative HQ insiders are skeptical that the lead is as big as this (and say that local associations’ events with Rishi are better attended).

Rishi’s team privately concede that they were ‘slow off the mark’ in the early days of the campaign, and let the ‘air war’ of announcements and media coverage get away from them. But at this stage, with the clear blue water between their entrenched positions on economic and fiscal matters, it seems unlikely that there is much policy-wise that Rishi could now announce that could sway things to put him out in front.

Barring something derailing the Truss juggernaut, Liz will thus be installed in No10 by the beginning of next month.

Either way, as one former minister put it to me this week, ‘I’m not sure I care which one of them wins any more, I just want it to be over’. Undoubtably a sentiment shared by pretty much the rest of the country, who just want to know how they are going to pay their bills come the autumn.

Words by Amy Fisher, Director at WA Communications

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Maintaining the Net Zero consensus: will the next Prime Minister bring change or continuity?

The first week of the Conservative Leadership contest has been dominated by policy pledges: significant personal and business tax cuts, immediate measures to address the cost of living, future spending plans and ideas on how to ‘properly’ implement Brexit. The big divergence with the last three years of government has been the major shift in focus away from Net Zero and the environment.

Proponents of the agenda within the Conservative Party have sought to fight a rearguard action over recent days with pressure on all the leading candidates to maintain the commitment. Businesses in particular have been anxious over the uncertainty, with many already heavily invested in the transition to a lower carbon future. So where are we now a week in and what’s the likely direction of travel?

The frontrunners have committed to maintaining the Net Zero by 2050 target.

At a hustings earlier this week Rishi Sunak, Liz Truss and Penny Mordaunt all committed to keeping the 2050 target, providing comfort to those worried about the early rhetoric from the

contest. All three have high profile advocates for climate action on their teams. Candidates are under pressure now to sign up to a series of principles from the Conservative Environment Network on climate action – so far Sunak and Tugendhat have pledged their support.

It’s worth acknowledging though the number of candidates who did raise concerns about the overall direction and pace of change, most notably Suella Braverman and Kemi Badenoch. This isn’t a surprise – it reflects that there’s an element of the Conservative parliamentary party concerned about the approach, ranging from sceptcisim to outright opposition. It’s a clear and helpful reminder to business though that while there’s largely been a political consensus to date over the appropriateness of pursuing Net Zero, this isn’t absolute and there’s a spectrum of opinion.

High level support doesn’t mean more granular targets won’t shift.

Macro level ambitions are one thing, but for most businesses and consumers it’s the specific policies that underpin them that matter most. The leading contenders have signed up to a high-level ambition, not to maintaining total consistency with Johnson’s plans. Business should recognise that there could be divergence on the detail, scale and timings of elements of the transition moving forwards.

Those sector targets that are already well engrained – such as the ending of the sale of new ICE vehicles by 2030 – are likely to survive. However, there will be a ‘clean slate’ of policy across many areas of government with no certainty that previous decisions will remain. For those businesses who want timeframes to be delayed allowing industry to adapt, costs to fall or new innovation to come forward, new people and a fresh start could deliver an opportunity for review.

Depending on the leader elected, expect that the need to act further on the cost of living could see the next set of ministers arguing that delaying some aspects of Net Zero – for example through a moratorium on environmental levies on bills – is necessary in the short term.

Difficult decisions are likely to be pushed even further into the long grass.  

The new PM will have approximately two years ahead of the next election. Their focus will be on developing the narrative and agenda which will allow the Conservative’s to win an historic fifth term in office. ‘Removing the barnacles from the boat’ as Lynton Crosby famously advised David Cameron by avoiding unnecessarily difficult issues and focusing only on those policy issues that appeal to the critical electoral coalition the party is focused on will likely become the big priority.

Under Johnson’s government a plethora of major decisions linked to Net Zero are either in the pipeline or have been deliberately pushed down the track, from the micro to the macro. These include – but are not limited to – how you decarbonise home heating and what incentives or legislative action are required to achieve change; how fuel duty is replaced and the timing for exploring a road pricing model; and the future of local transport, including whether and how car use is disincentivized and the policy and regulatory framework for enabling new innovation, such as e-scooters. These are all issues that are fraught with political risk – the likelihood is that on most of these issues the new leader will seek to avoid the confrontation and electoral pain rather than tackling the tough policy issues.

What does this mean for industry?

Compared to the panic amongst business and proponents for climate action less than a week ago, we now have clarity that the frontrunners are bought into the concept and overall timeframe for achieving Net Zero. Underneath this though there’s significant fluidity, with much less certainty over specific policy proposals.

This will require agility from business to quickly remake their case to government, to be flexible to the new context and the government’s priorities and motivations – potentially adapting their message to be more about energy security, jobs or regional development, and not just about decarbonisation. Net Zero is still on the agenda, but business can’t take for granted that things will continue as planned, the case will need to be remade.

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Who will define Conservatism in 2022?

Down to the last two leadership candidates, the country will now see a string of nationwide hustings for Conservative Party members, meaning an intense (and, at times, uncomfortable) summer-long debate. Like it or not, the choice of the 160,000 Tory party members will define what it means to be Conservative in 2022.

As the two candidates, former Chancellor Rishi Sunak and current Foreign Secretary Liz Truss, go head-to-head, their policy announcements to date promise to take the Party in two distinctly different directions. Who wins will determine the road ahead for Conservatism up to the general election and beyond.

Perhaps most fundamentally, the candidates differ on their approach to tax and spend, butting heads on who has the most legitimate claim to Thatcherism 2.0.  Both want to create a smaller state with (eventually) lower taxes but differ on when and how to implement these. Sunak advocates fiscal responsibility, vowing to tackle inflation before making any cuts. Truss would cut taxes on day one as Prime Minister, with an Emergency Budget and new spending review paving the way, presumably, for shrinking government departments.

Without a doubt, the cost-of-living crisis will be one of the next Prime Minister’s biggest challenges, and how the candidates tackle it will likely define their premiership. With the exception of Sunak, all of the candidates in the race made commitments to do more to support people. Sunak has remained adamant that the best thing he could do to combat the cost-of-living would be to curb inflation. If he wins, he will come under huge pressure to go further.

On Brexit, neither camp will want to appear to the Party membership to be taking a soft approach towards the EU. Behind the scenes, however, the Northern Ireland Protocol is another area of key difference between the two candidates and will redefine the UK’s relationship with Europe. Sunak, after three years in the Treasury, remains alert as ever to the economic impact of policy decisions, and leans towards compromise. Truss, conversely, wants to cement her position as the hardline Brexiteer despite (or because of) voting remain in 2016.

Ultimately, this is a fight for the right of the Party. Sunak wants to distance himself from Boris Johnson’s high-spend ‘Cakeism’, while Truss seeks to woo the traditional heartland with immediate tax cuts. The challenge for both candidates, upon becoming Prime Minister, will be to unite a party that includes the European Research Group, Red Wall and One Nation Tories, and everyone in-between before the next general election.

 

Tax and spend

The candidates have already clashed bitterly on tax and borrowing. Sunak has branded Truss’ policy socialist, whilst she has argued that he would push the country into a recession.

Sunak insists he is a low tax Conservative. However, he will not make specific pledges to cut taxes until inflation is brought under control. In truth, he cannot plausibly pledge tax cuts now, having overseen some of the largest tax rises in recent years. He’s standing on a soapbox of fiscal responsibility, advocating low spend with future cuts on the horizon when the time is right.

Truss, on the other hand, would cut taxes on her first day in office. She has so far pledged to reverse Sunak’s increase to corporation tax and National Insurance, costing the Treasury over £30 billion. She would generate fiscal firepower by paying back the £311 billion Covid debts over a longer period – treating them akin to Second World War loans.

It is difficult to see how two political heavyweights with such opposing economic ideology could work together in a cabinet of collective responsibility. It is highly unlikely that either candidate will serve in the other’s government, instead retreating to the back benches or (in Sunak’s case if he does not win) from politics altogether. The bigger concern for the Conservative Party is whether MPs can unite around the winner to support the implementation of their fiscal policy. Whichever path is chosen, the Parliamentary Party must wholeheartedly support it if they are to stand the chance of winning the next election. If voters get any whiff of squabbling under the new leadership, the new Conservatism may end up being defined by its time on the Opposition benches.

 

Environment

The environment, in particular the 2050 net-zero target, had all the candidates in this race equivocating to a greater or lesser degree. Eventually, all of them pledged to support the 2050 net zero target.

While it is likely that the long-term target will remain untouched, the short-term route towards this goal looks set to be abandoned or revised, in no small part due to the cost-of-living crisis. Sunak has pledged to increase renewable production (offshore rather than onshore) and build more electric car charge points, though he has yet to announce any detailed environmental plans. As Chancellor, he largely avoided talking about net zero and some accused him of blocking green policies that had any associated spending implications.

Truss committed to net-zero reasonably early in the contest, securing the backing of notable green Tories including Vicky Ford and Simon Clarke, both of whom have cited her support of Cop26 as one of their reasons for supporting her. So far though, she has pledged to ‘pause’ green levies on energy bills to save households £153 each to help ease the cost-of-living crisis. She also wants to lift the fracking ban. As Foreign Secretary she rarely bought up environmental issues in speeches or with counterparts, and as Environment Secretary she cut subsidies for solar farms calling them ‘a blight on the landscape’.

The biggest challenge for both the candidates here is that the party membership is at odds with the wider electorate on this issue. A recent poll in The Times puts the environment at the bottom of the top ten concerns of party members, and a YouGov poll found that only 4% of members believe net zero should be a priority. Contrast that with an April poll that put broader public support for net zero at 64%. It’s true that the race for leadership means the candidates have to focus on the first group, but if they want to be serious contenders in the next general election, then what?

 

Levelling Up

There has been a distinct lack of enthusiasm from any candidates for Johnson’s flagship ‘levelling up’ agenda. This may be a decisive move to distance themselves from his premiership, but they have not indicated what they would do for the Red Wall that won them the last election so decisively. Neither candidate wants to make commitments that would be costly to the public purse, and broadly speaking they both want to focus on reducing spending and shrinking the state.

So far, Sunak has committed to keeping a Cabinet Minister for levelling up and has promised to ensure that every part of England that wants a devolution deal gets one. He has also pledged to devolve powers on business rates to mayors and look at the devolution of post-16 education. He said he will work closely with local leaders on the future of transport investments, including Northern Powerhouse Rail.

Truss has promised to create ‘low tax zones’ across Northern England with low business rates and few planning restrictions, making it easier and quicker for developers to build on brownfield land.

Both candidates have committed to the Northern Research Group pledge card but must try harder than this to incorporate the Red Wall into their new Conservatism if they want to count these votes at the next election.

 

Brexit

Sunak voted Leave and his voting record has been consistently pro-Brexit. At the Conservative Party Conference last year he said “I believe the agility, flexibility and freedom provided by Brexit would be more valuable in a 21st century global economic than just proximity to a market.” He has said he will create a Brexit Delivery Department tasked with reviewing all 2,400 laws inherited from the EU. He wants to scrap and replace GDPR, overhaul laws governing the City of London, and speed up clinical trials. It is thought that he might move on the Northern Ireland Protocol and seek compromise with Brussels, though giving any suggestion of doing so at this stage in the leadership contest would be extremely high risk.

Despite voting to remain in the EU in 2016, Truss is seen, counterintuitively, as the hardline Brexiteer. She wants to reform the European Court of Human Rights but is prepared to withdraw from it if necessary. As Foreign Secretary, she introduced a Bill to unilaterally override some post-Brexit trade rules for Northern Ireland. Her supporters claim she plans to drive forward regulatory divergence from the EU, including overhauling business regulation to spur a more dynamic economy.

It’s hard to believe this is still an issue for voters six years on, but perhaps the Conservative Party will never be able to shed its complicated history with Europe. Nevertheless, the candidate that wins the leadership race will be responsible for forging a new relationship with the Continent, and how they do so in the next couple of years is likely to redefine the Party.

 

The missing piece?

Both candidates were participants in the outgoing incarnation of government. This should, in theory, make it a little awkward to disavow everything it has done. Although, it has seemed to trouble Truss rather less, leaving Sunak sharply and repeatedly reminding her of the notion of ‘collective responsibility’.

The candidates need not deny its achievements. But they do need to acknowledge the elephant in the room: that the leader that won them an 80-seat majority was ousted by Conservative parliamentarians less than three years later for serious and serial questions over the ethics of his Government, and of himself. Conservatives fundamentally believe in upholding the unwritten constitution and its conventions, but events of the Johnsonian era have undermined one of the central assumptions of our country’s democracy: that the Prime Minister acts as the guarantor of ethical government. In order to build a new, resilient Conservativism, they must reassure voters that this will never happen again.

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Sunak V Truss – A Defining Contest For The Modern Conservative Party

And then there were two. In the final round of the Conservative leadership contest, Boris Johnson’s longest serving Chancellor, Rishi Sunak, faces the current Foreign Secretary, Liz Truss.

During the early phase of the Conservative leadership contest, there was a lot of talk about the need for a clean break with the past. Indeed, for one day last week at Westminster there was almost an assumption that Penny Mourdant would be the next Prime Minister. That was before her indifferent performances in the TV debates and the onslaughts from other camps, including the stridently pro-Truss Daily Mail. In the end, the MPs chose the two most experienced and best known candidates.

There is though, a significant twist. In this topsy turvy contest, Truss is running as the ‘change’ candidate even though she is the longest-serving minister in the cabinet. During a remarkable interview on the Today programme this morning, she argued that there had been a misplaced economic consensus for twenty years, thereby distancing herself from the policies of the Conservative governments since 2010. Her big pitch is for tax cuts to be implemented from “day one”. Specifically, she would reverse the National Insurance rise and the planned increases in Corporation Tax. Her belief, not widely shared amongst economists, is that such a move would trigger economic growth and avoid a recession. She also claims that the tax cuts would reduce inflation, whereas Sunak has argued repeatedly that the opposite would happen. Inflation would rise.

In fairness to Truss, she is speaking truthfully when she insists that she argued against the NI rises in cabinet last summer. She said then in private what she now declares in public, that the additional spending on the NHS or social care could be paid for by borrowing. I am told that Boris Johnson had also hoped originally to pay for his still vaguely defined social care plan without increasing taxes. In frantic meetings a year ago, Sunak insisted that if Johnson wanted the additional cash it would have to be paid for through a tax rise. Johnson agreed reluctantly. In his final Prime Minister’s Questions yesterday, Johnson could not resist a dig at ‘the Treasury’ when he told MPs that his successor should sometimes challenge that mighty department’s tight spending orthodoxies.

Johnson and his allies are out to stop Sunak. Apparently, there was talk of little else at his farewell party at Chequers on Sunday.

Yet here is another twist. In some quarters Truss is presented as the ‘Thatcherite’ candidate while Sunak is portrayed as the ‘centrist’. But Thatcher never did what Truss is pledging to do. For Thatcher tax cuts had to be paid for. It was not until 1988 that her Chancellor, Nigel Lawson, cut the top rate of income tax. She had been Prime Minister for nearly nine years by then. Truss’s approach is much closer to President Reagan’s in the 1980s. Reagan funded tax cuts from increased borrowing. In a contest largely defined by the 1980s Truss is a ‘Reaganite’.

Sunak is the Thatcherite candidate, even though some of Thatcher’s most ardent admirers in the parliamentary party are backing Truss. Like Truss he wants to implement tax cuts, but only when he has addressed inflationary pressures. This produces another oddity about the contest. Although Sunak resigned from Johnson’s government and spent a lot of his time when he was Chancellor engaged in tense disputes with Number 10, he is the one seen more widely as the ‘continuity’ candidate. This is because inevitably he is not going to disown his economic policies.

Sunak’s pitch is very different to the one that Truss is making. Already he has made clear that only he can win the next election for the Conservatives. His supporters also argue that because Truss plans to make sweeping changes she will be obliged to call an early election to secure a new mandate. Party members dread an early election. In interviews later today and in the coming days Sunak plans to argue that the Conservatives’ reputation for economic competence is the key to their appeal. If they lose that with unfunded tax cuts, they are finished for the time being.

As a result of this fundamental divide on the right of the Conservative party over when to cut taxes, there will be big consequences arising from this contest. If Truss wins, Sunak and his close supporters will struggle to support her new government’s economic plans. How can they vote for policies in the Commons when they have argued they are ‘fairytale’ tax cuts that will fuel inflation? In the longer term, I suspect Sunak would leave British politics at the next election. He would not serve in a Truss cabinet. Conversely, although throughout her career Truss has been a much more flexible politician than Sunak, it will not be easy for her and her closest allies to back Sunak’s economic policies this autumn if he wins. The leadership contest is a symptom of a division over how to achieve economic growth and there will be no resolution when a new Prime Minister is crowned in September.

There is one final twist. Both candidates seek a smaller state in theory. Yet almost certainly whoever wins will begin by spending more. To take a precise example, the hugely influential financial guru, Martin Lewis, is already calling for an emergency package this autumn when the new energy price cap is announced. The night before Sunak unveiled his most recent programme of financial assistance, he phoned Lewis to check that he was doing enough. He wanted Lewis’ backing and feared further opposition. No new Prime Minister will want to have Lewis as an enemy. There will be further help with fuel bills.

More widely the next election will be moving into view. A new Prime Minister will be in no position to cut spending on the NHS in advance, nor resist demands for increases in defence spending. There is also the thorny issue of social care. The additional spending from the NI rise is being spent largely on the NHS. How is the new Prime Minister going to find additional funds for social care or will they dump this commitment? What about ‘levelling up’, a concept that neither Sunak nor Truss is as enthusiastic about as Johnson?

The Conservatives need to retain some of those red wall seats if they are to win next time. To do so the new government will have to spend more money rather than cut departmental budgets. But for now, there is a single target audience, the party membership. Every word uttered in the next few weeks will be aimed at pleasing the members alone. They will elect the next Prime Minister.

Polls suggest Truss is well ahead. Sunak knows he has little time to sway the membership. Most are likely to vote early in the contest. He and his team plan to work around the clock for new week or so as the ballot papers are sent out. Sunak will need to be at his most persuasive. Polls on the ConservativeHome website suggest early tax cuts are the members’ top priority. Truss is pledging to give them what they want as well as delivering better public services.

When Johnson used to pledge tax cuts and higher public spending, he acknowledged he was a ‘cakeist’. He would have his cake and eat it. Such an approach was the main source of tension between Johnson and Sunak. Now Sunak must go public and put his case for what he describes as fiscal conservatism. Polls suggest he is the more popular candidate with the wider electorate. That is rarely a decisive factor in Conservative leadership contests.

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Things hot up

Former Government Special Adviser and WA’s new Director Amy Fisher shares her inside track and perspective on the Conservative leadership contest so far, as well as its wider implications for the party going forwards.

 

Dubbed a ‘wacky races’ line-up of those who’ve put themselves forward for the Conservative leadership, we will at least by the end of the day (with nominations having been made) have an idea of who actually will be in the running – and so who will need to crank up the wooing of fellow MPs over the coming days. Rishi had a good turnout for his drinks last night; one assumes he’s plenty more rose on order. He’s increasingly looking like the Djokovic of this – there may be challengers to the crown, but the favourite no doubt to make it to the last two.

So now the real trouble starts.

Since the starting gun was fired last week with Boris Johnson’s ignominious departure, things have been … brutal. The amount of briefing about, against and amongst the various ‘runners and riders’ has been vicious – and we’ve got a long, hot summer of this to go. Questions have been asked over one (not known for playing ‘nicely’ shall we say) Dom Cummings’ involvements with Rishi’s campaign; it’s somewhat irrelevant as to whether there is any kind of ‘arrangement’. Dom will do what Dom does, which is to blow everything else up so long as he gets what he wants. And a Rishi premiership seems to be it.

I’m worried by what the Party looks like at the end of this, by the time the candidates have finished taking clumps out of each other. This is personal. The last two leaderships (2016 and 2019) weren’t necessarily pretty, as such. But they were about the single issue, really, of Brexit, and to coin a phrase, who was going to get it done. This just isn’t – and with all the smears and allegations of smears already flying around, it’s somewhat ironic that this whole contest was prompted by folk’s collapse of faith in the last chap’s integrity and transparency.

The Party has always had a veering towards being its own worst enemy. I hope this batch of candidates can at least bear in mind that at the end of it all, they will need to form a Cabinet and Government of some kind of unity (not easy if you’ve spent the last eight weeks taking pot shots at each other).

However, new partnerships as the field thins out will be formed. This is where things get interesting- not least in the context of the looming 2024 GE (which CCHQ is very much focused on, and therefore so very much welcomed this leadership contest being sooner, rather than in say 6 months, time). These partnerships are make-or-break, in terms of political success and longevity. Where would Blair have been, were it not for Brown? Same question of DC without George? How each of the candidates shores up their economic offering, possibly with a running mate, will be one to watch – all of these pledges and the ones to come are after all at some point going to need properly costing.

In the last twenty years of my experience, the pendulum has tended to swing from one side to the other in terms of what the Party seems to look for in its leader. Michael Howard, safe pair of hands, DC, ‘star power’, TM back again, then Boris.

Undoubtedly what the Party, and the whole country needs, is some steady-as-she-goes form of Government, which the next few weeks most certainly are not going to be – not least if Boris, as he pledged yesterday to do, really is going to try and deliver all his manifesto commitments before he goes.

Still, by 5pm tonight, we should have a candidates’ slate that’s less like an actual cartoon.

 

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The last days of Boris Johnson and the leadership contest

Normally Tory MPs are entirely relaxed about an outgoing Prime Minister staying on during a leadership contest. Indeed they welcome what is often seen as a smooth transition. Now a lot of them are disturbed that Johnson is still in Number Ten and might be there for a couple of months. The context explains why. Johnson is going because an army of ministers and MPs said that he and his operation could not be trusted. Yet they are allowing a figure they do not trust to remain in office over a period in which quite a lot could happen, from developments in Ukraine to strikes in the UK. They fear what Johnson might do. More fundamentally this is a government in paralysis as the economic crisis deepens. No one knows who will be Prime Minister and Chancellor by the time of the Autumn Budget or what their economic policies will be. The same applies in all other departments. The new Levelling Up Secretary, Greg Clarke, had told his senior officials that he will only be in post for a few weeks.

 

The key meeting will be on Monday when the newly elected 1922 Committee meets to decide the form and timing of the leadership contest. The chair, Sir Graham Brady, has made clear they have no powers to remove Johnson immediately but they can determine the amount of time he has left as PM by deciding on the timetable for the contest. Those MPs keen to be rid of Johnson and the paralysis as soon as possible are calling for a short contest that is over “within weeks”. Others are less sure pointing out that the election of a new Prime Minister should not be rushed. My sense is that the first round where only MPs have the vote will be concluded speedily, by the start of the summer recess. Probably the final two candidates will be given until early September before the final vote of party members. A new Prime Minister and government would be in place for the return of parliament and the Conservative conference.

 

Most immediately, expect a large number of MPs to declare that they plan to stand. Already the number of declarations is in double figures. Farcically this is the weekend when MPs can fantasise that it might be them that can seize the crown. Around a third of the former cabinet are contemplating a bid and an array of backbenchers. Conservative leadership contests rarely go to plan, but I can report that quite a few MPs are saying “it’s time for a soldier”, referring to the likes of the Defence Secretary, Ben Wallace, or the backbencher, Tom Tugendhat. But there is little point speculating until the field is narrowed a bit after this coming weekend of indiscriminate and delusional displays of personal ambition.

 

Almost inevitably the pitch of all candidates will be towards a more rigid form of fiscal conservatism compared with Johnson’s ‘cakeism’ support for the hard Brexit and a battle over the Northern Ireland protocol, combined with a new focus on standards in public life. The membership is more or less the same as the one that elected Johnson in 2019. Although if they go for Wallace it would be quite a leap in some respects. Wallace was a remainer and has not become an evangelical convert like Liz Truss.

 

The challenge for whoever wins is to square the circle. A lot of Tory MPs want tax cuts and higher public spending on defence, levelling up, NHS and social care, and local transport provision. Johnson’s coalition of red wall former Labour voters and traditional Tories in the south was bound by Brexit, his personality and his ‘cakeist’ approach that drove Rishi Sunak to despair. How will Johnson’s successor keep that coalition intact, not least when by-elections suggest that it is already fraying? This political background becomes more complex given the current state of the economy. Treasury officials I speak to fear a recession will be difficult to avoid. Then there is the thorny issue of the fuel price cap rising again in the autumn. A fiscally conservative Chancellor will be reluctant to borrow more, but he or she will probably have to in order to further ameliorate the ‘cost of living crisis’.

 

There will be a new Prime Minister and government in place by September. Until then there is a vacuum unless the 1922 committee decide to shrink the timescale of the contest to a couple of weeks, not impossible but unlikely. Boris Johnson answering questions at Prime Minister’s Questions in the Commons next Wednesday will be as weird as last week when he spoke as if he had years more in power.

 

The race to succeed Boris Johnson is wide open, with candidates from across the party jockeying for position. Ahead of the election kicking off next week, WA has mapped out the process that will determine the next Prime Minister, and the key runners and riders looking to lead the next Government.

You can download the full briefing here:

Who replaces Boris Johnson? 

 

 

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Sustainability Disclosure Requirements: Where do we go from here?

Sustainability Disclosure Requirements have long been on the industry’s radar, supported by wider international actions surrounding the need to combat climate change and protect our environment. However, more recently, clarity around what these requirements entail and how we can appropriately implement them has been notable by its absence – leaving many to wonder, what comes next?

The history of SDR

In July 2021, the Chancellor announced the new Sustainability Disclosure Requirements (SDR) at his Mansion House speech. These requirements were to be focused on combining existing requirements with new ones in an effort to create a new sustainable investment labelling regime which would make it easier for consumers to navigate the investment products available to them.

The SDR were then fleshed out three months later in October, when, just before hosting COP26, the Treasury laid out its roadmap to sustainable investing: Greening Finance.
This detailed what the SDR would need to include, and when; how the SDR should report against the (forthcoming) UK Green Taxonomy; considerations to be made in the day-to-day running of business to ensure responsible stewardship; the potential for ESG data and ratings providers to be brought into the scope of the regulator and Government expectations for asset managers, asset owners and service providers as part of the UK’s transition to net-zero.

Details were “subject to further consideration” and in November, the FCA opened a consultation on SDR and investment labelling, inviting views from the industry at large on the pending obligations. Responses came from far and wide in support of the SDR, with suggestions around labelling, how to make the requirements accessible to consumers, and how the SDR could fit in with other standards.

That consultation was closed in January of this year and the next steps for the SDR were lauded to be in the Queen’s Speech in May. However, while the Treasury stated that it “remained committed to implementing sustainability disclosure requirements” and would “proceed with the necessary legislation in due course”, a reluctance to impose any new regulations on businesses at that time meant that the SDR were notable by their absence in the Financial Services Bill.

This decision was met with notable frustration across the financial industry, with some suggesting that the postponement of the SDRs was a missed opportunity for the UK to reaffirm its position as a global environmental leader as well as denying business the much-needed guidance, clarity and confidence in aligning their processes with a 1.5C future.

Now, the FCA has said it will publish a consultation paper on the sustainability disclosure requirements, including sustainable investment labels, in July, but that formal engagement will not be until Q4 this year.

So, with a moving timeline and a distinct lack of clarity around what the SDR is going to look like, where do we go from here?

 

Join us

On 30th June, WA will be hosting a panel discussion to explore where the industry needs to go next. We’ll explore the Government’s latest developments of the regulation, the main concerns facing the industry and what effective SDR really look like.

 

Confirmed panellists

 

Andrew Death, Deputy Director, Department for Business, Energy and Industrial Strategy

Andrew Death is a Senior Civil Servant in the Department for Business, Energy and Industrial Strategy. He has been a civil servant for 21 years and is currently Deputy Director for audit and corporate reporting. His responsibilities include delivering changes to the corporate reporting framework to implement Government policy of ESG reporting, as well as delivering legislative change to increase competition, choice and resilience in the audit market.

 

Louisiana Salge, Senior Sustainability Specialist, EQ Investors

Louisiana is responsible for overseeing EQ’s ESG and impact integration strategy across all assets, its stewardship efforts and sustainability data reporting.

 

Louisiana first joined EQ Investors in 2018 on an internship during her master’s degree programme at Imperial College London, where she conducted research on impact measurement for her thesis. This formed the groundwork for EQ’s award-winning Positive Impact Report, and she joined the firm as a Sustainability Specialist after graduating. Over the last 2 years, Louisiana has developed, and implemented common sustainability standards across all assets managed at EQ. She also leads as a specialist across the three sustainable portfolios managed at EQ: Positive Impact, Future Leaders, Climate Action.

 

James Alexander, CEO, UK Sustainable Investment and Finance Association
James Alexander joined UKSIF as Chief Executive in October 2020, with a strong vision and mandate to further enhance the organisation’s key role in promoting and expanding sustainable investment and finance in the UK.

 

James has a background in international climate finance and infrastructure finance as well as many years’ experience in leadership roles in membership organisations. Most recently, James supported global megacities to overcome the substantial barriers to financing climate action as Director of the City Finance Programme at the C40 Cities Climate Leadership Group and Head of the C40 Cities Finance Facility – a project preparation facility he developed, now supporting cities across the world to structure nearly a billion dollars of sustainable infrastructure transactions. James has worked on international climate finance issues at the UN level and supported cities across the world to invest their pensions and reserves more sustainably.

James is Treasurer of Eurosif, the European Sustainable Investment Forum, a member of the Green Technical Advisory Group (GTAG) providing advice to the UK Government on implementing a UK green taxonomy and a member of the Disclosures and Labels Advisory Group (DLAG) providing advice to the FCA on the UK’s SDR and fund labelling regime.

 

When:
Thursday 30th June,
08:00 arrival for 08:30 start, close at 10:00

Where:
WA Communications,
6th Floor, Artillery House,
11-19 Artillery Row,
London, SW1P 1RT

 

RSVP AnaNogalesGarcia@wacomms.co.uk

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The By-Elections and Boris Johnson’s Future

By-elections often trigger a minor political explosion but before very long the noise subsides. What happened in the early hours of this morning is different. There were three significant eruptions before most voters had woken up. The noise is about to get louder.

The least seismic development was Labour’s gain in Wakefield. In mid-term, an opposition party would expect to win such a seat. But even this win makes bigger waves than might have been the case in different circumstances. Boris Johnson’s great distinctive pitch as a leader of the Conservative party has been his appeal in the so called Red Wall. Most Tory MPs know he is a chaotic figure and is, in many ways, unsuited for government. However, some still dared to hope that only he could keep together the contradictory coalition of support that won them a near landslide in December 2019. There is vivid evidence that he is becoming an electoral liability even in those seats that turned to him at the general election. Let us not forget the Conservatives gained Hartlepool in a by-election a year ago, largely because of Johnson’s appeal. His fall as an electoral asset has been speedy.

Losing Wakefield is made much worse by the outcome in Tiverton. The swing to the Liberal Democrats shows that the Conservatives could face their ultimate nightmare, losing to Labour in some parts of the country and to Ed Davey’s party elsewhere. This was a seat the Conservatives held even in the 1997 general election, when Tony Blair won a landslide.

The third development is the most significant. The resignation of the Conservative chairman, Oliver Dowden, breaks the spell that Johnson is in full command of his government even if many of his backbenchers had no confidence in him. It was when the cabinet turned against Margaret Thatcher in 1990 that she fell. In his own way, Dowden’s resignation letter was scathing not least given he backed Johnson in the Conservative leadership contest and had been devotedly loyal since.

What happens next? Having spoken to some Conservative MPs this morning, I sense the mood is even more febrile than in the build up to the vote of confidence in Johnson earlier this month. Some are wondering if other cabinet ministers might resign. As I write, there is no indication of that. They had the chance to act when that vote of confidence took place and they opted to stay. Dowden did not consult cabinet colleagues. He acted alone.

For sure Johnson will seek to stay in Number 10. He is not going voluntarily. I am told he has convinced himself that he has a personal mandate from the 2019 election, and nothing can override the voters’ endorsement of him then, at least until he calls the next general election.

In theory there can be no vote of confidence in Johnson for another year, but that rule can be revised. The chairman of the 1922 committee, Sir Graham Brady, though not a great fan of Johnson, is extremely reluctant to bring in rule changes. It will take a new development to bring about another vote of confidence in the coming weeks or months, more cabinet resignations or Tory MPs who voted for Johnson in the vote of confidence now saying publicly he must go. But look out for elections to the 1922 executive to be held before the summer recess. Almost certainly the balance will move towards Johnson’s critics within the parliamentary party.

The by-elections have intensified the storm over Johnson’s leadership when there are many more mountainous challenges to come this summer and autumn, most specifically the cost-of-living crisis and the related industrial action. Crises tend to feed on themselves. Capable of fleeting introspective melancholy, Johnson will wonder whether the strategy of seeking new Brexit style divisions is working. Some in Number 10 had hoped that the strikes, the new Rwanda policy for asylum seekers, and further battles with the EU over Northern Ireland would help them at least win the Tiverton by-election. These policies did not do the trick. Others in Number Ten have had their doubts about this provocative strategy. Their doubts will be reinforced and internal tensions within Johnson’s team are inevitable amid political and economic crises.

I would also follow closely Johnson’s relationship with Rishi Sunak in the build up to the autumn budget. They do not get on. The differences are not just ideological, though Sunak’s “fiscal conservatism” clashes often with Johnson’s big spending instincts. They are also incomparably different personalities. Sunak is diligent and methodical. Johnson is erratic and disorderly. The contrast infuriates Sunak. Relations between Prime Ministers and Chancellors are often tense but can be managed when a leader is strong, which Johnson is not.

But critical Tory MPs I have spoken to are still unsure what to do next. There is no easy route to remove a Prime Minister who is determined to stay. They hope cabinet ministers make a move in the coming weeks or months. Let us see.

By-elections are not a wholly reliable guide as to what might happen at a general election, not least when it is possible that the Conservatives will have a new leader by then. But a hung parliament seems a likely option, in which case a minority Labour government will almost certainly be formed. The other parties, including the SNP, would not keep a Conservative government in power for a fifth term. In the meantime, Keir Starmer expects to get the verdict from Durham police within days. This will be a volatile summer and autumn.

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Sustainability Disclosure Requirements – where do we go next? The inside view.

The sustainability disclosure requirements (SDR), announced in July last year as part of the UK’s ambition to improve sustainable investment labeling and prevent greenwashing, were initially met with huge support from the financial industry. At last, a UK comparable to the EU’s Sustainable Finance Disclosures Regulation (SFDR), helping us to ensure that funds who claim sustainable credentials, truly have them, and a framework to guide the industry on what sustainability really looks like.

However, in the wake of delays and a lack of clarity around detail, developments around SDR have seemingly ground to a halt, with a raft of questions from the industry around what comes next. To uncover some answers, WA Communications spoke with three exceptional individuals, exploring their experience of the pending regulation and their involvement therein.

At a well-attended roundtable last week, we were joined by Andrew Death, Deputy Director for the Dept for Business, Energy and Industrial Strategy;  Louisiana Salge, Senior Sustainability Specialist at EQ Investors; and James Alexander, CEO of UK Sustainable Investment and Finance Association.

The main takeaway, expressed by each of our speakers, was that regulation in this area was essential, but undeniably a challenge – and one for which we’re not quite ready. EQ investors has been focused on investing impactfully and sustainably for nearly 10 years, however, Louisiana Salge highlighted that the vast majority of the asset management sector simply “aren’t there yet”. This sentiment was echoed by James Alexander, suggesting that there is an inherent lack of skills on sustainability and that we need to encourage training in this area.

Similarly, Andrew Death explained that for the SDR to be effective, we need to concentrate on what is actually feasible and deliverable. While this might not be completely perfect at the outset, it will help businesses to transition to a more sustainable framework, rather than risk a lack of engagement and compliance from the very beginning. “We need to get people on board, and then we can up the ambition”, he said, adding that there is a real opportunity for the UK to be a leader in this sector.

Of course, effective labelling to better inform the end investor is at the core of the SDR. Salge, who was part of an industry group providing feedback on this area, recommended better alignment of the labels with other terms already in existence across the financial industry. She also urged the FCA to not simply concentrate on the end output, but to ensure the labels measure the intentionality and processes employed by asset managers when considering their sustainability focus, “this should prevent against a huge amount of greenwashing,” she said.

Another of the key aspects of the SDR is its alignment to the UK ‘s Green Taxonomy. This itself is yet to be finalised, though our speakers were vocal about the importance of getting this right. Indeed, recent suggestions that the taxonomy may include natural gas as “green” have been met with dismay. Alexander, who has already written to the Government to encourage them to remove this, asserted, “for taxonomy to be genuine, it needs to be aligned to the science…natural gas is not green!”. Death, who is working closely on the reporting framework for the Green Taxonomy added that there are certainly lessons to be learnt from the EU’s taxonomy, but simultaneously recognised that the UK’s version must be rolled out quickly to allow for the SDR to be impactful.

While we await the FCA’s draft rules, mooted to be announced this month, it’s clear that there remain a number of gaps and question marks over what the SDR should look like and how it can deliver on its objectives. What’s deeply encouraging is the appetite from the industry at large to do this correctly and to drive development and investment into the right areas. As Salge pointed out, the SDR needs to be a “tool for change” to ultimately help money flow into the right places and transition the whole economy to a more sustainable future.

We do have a way to go, but based on the insight shared and the overwhelming engagement from those in the room, it looks as though the SDR, and the industry’s response to it, might really be successful.

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Plotting a roadmap for Primary Care integration: What is changing and what is standing in the way?

Primary care is not currently fit for purpose

Staff capacity and morale are at an all-time low, whilst patient frustrations are at an all-time high.  This, coupled with the move toward integrated care systems (ICSs), has created an opportunity to create meaningful change that improves access to services and quality of care for all.

In response, NHS England commissioned a report to assess how newly formed ICSs and primary care could work together to improve patient care. The result was the Fuller Stocktake report, born out of a comprehensive consultation process that unpicked what works well to provide recommendations to accelerate integration in primary care.

But what does this change look like? And what will stand in its way?

What will the change look like?

The Health and Social Care Committee on Workforce has confirmed that the NHS will implement recommendations from the report, including creating Integrated Neighbourhood Care Teams (INCTs).

INCTs aim to do things differently for whole populations. These ‘teams of teams’ are designed to better support people living with long-term conditions by providing a fully integrated response across health, social care, housing, employment, benefits, and voluntary sectors. At the same time, they will be expected to cater for ordinarily healthy people who want faster access to a broader range of professionals.

Partnership lies at the heart of realising this vision, with success dependent on coordinated action. Primary Care Networks are an essential first step, but there are still barriers holding back more ambitious change.

To move forward, systems, services and clinicians need to be realistic about where they are now and tackle challenges head-on.

What is standing in the way?

The devil will be in the detail to make the vision a reality. Practical changes, effective partnerships and patient-centred design are essential steps in the process.

Firstly, practical changes to data infrastructure, estates and workforce must be made at all system levels to deliver the vision.

Although local areas should lead the charge to integrate their teams and systems, they must not be left to do so in a vacuum. Conditions must be created at a national level that enables informed decision-making locally. This means ensuring that local areas have access to the correct data, effective IT systems, and buildings that are fit for purpose. National bodies should ensure that data monitoring aligns with INCTs priorities to enable areas to understand what works and make changes in response to local needs.

At a local level, areas need to ensure that the right people are in place and that their workload is manageable.

The Royal College of General Practitioners’ response to the Fuller report said that:

“Addressing workforce and workload pressures, improving staff morale, and investing in support for change will be particularly key to achieving the report’s aspirations.”

This will be a challenge given that one in seven GP posts are currently vacant, and a third of GPs plan to leave direct patient care within the next five years. The recent Health and Social Care Committee inquiry on the future of General Practice highlighted significant variation between GP practices and the importance of learning from the ‘green shoots’ of integration across the country Implementing changes equitably will take time and requires full-throated Government support. Innovative ideas to support the frontline in the meantime will be essential to retain momentum and openness to doing things differently.  

Secondly, INCT partnerships must determine shared goals from the outset to ensure no one is left behind. Success will depend on ICSs supporting primary care to understand their patients from a population health perspective. Systems will be required to work together to provide a holistic model of care that promotes wellbeing and prevents ill health. This includes tapping into the knowledge of voluntary and community sectors skilled at working at the interface of clinical and social care and having unique insights into patients’ needs on the ground.  

Finally, services must be designed around a positive patient experience to improve quality of care.  The report recommends the creation of a care pathway that simultaneously provides personalised care for those with long-term conditions and streamlines access to care for normally healthy people. This is no mean feat.  To reduce the risk of this becoming an exercise of moving the deckchairs, patients should be involved in service and pathway re-design, and experts should be enlisted to make this happen. Done well, this represents an opportunity to create more sustainable services grounded in patient satisfaction.

Making the vision a reality

But it’s clear, isn’t it, the current model of general practice isn’t working as well as it could. That’s why I commissioned Claire Fuller to do a stocktake,Claire did a very impressive job, but it’s now our job – mine and yours – to take that forward. Amanda Pritchard speech to NHS ConfedExpo 2022 Conference 

The Fuller report offers a muchneeded and realistic solution as long as we welcome the change. All that remains is creating the right culture and conditions to deliver it. 

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What’s happening in health inequalities?

What’s happening in health inequalities?

Health inequalities vastly pre-date the pandemic, but evidence demonstrating that a person’s postcode or ethnicity could be a determinant of COVID-19 outcomes has combined with a wider focus on societal inequality – and Levelling Up – to create renewed policy attention.

It is a complex and deep-rooted challenge to reduce health disparities across the country. WA recently produced a The Health Inequalities Policy Map, to explore some of the different policy levers and influencers shaping the landscape: some are explored in more detail here.

NHS reforms can create change – but are not without challenges

The Health and Care Act passed in April, establishing long-awaited NHS system reforms to formalise Integrated Care Systems (ICSs). Included in the legislation was a statutory duty for Integrated Care Boards (ICBs) to reduce health inequalities.

ICSs have responsibility for larger geographical areas than their predecessor CCGs. This means that they may have greater success in taking a population health perspective that can drive improvements to health inequalities, and the introduction of NHS England’s CORE20PLUS5 approach provides a supportive framework for ICSs to refine their thinking.

ICBs bring together health, public health, and other partners to organise provision of care. That should mean that services can be better designed to respond to the needs of the population, creating an ideal environment for supporting communities experiencing health inequalities.

However, there are also likely to be challenges.  ICSs are under enormous pressure to address immediate and pressing local challenges, including waiting list backlogs, overstretched emergency care and workforce crunches. Longer-term issues like health inequalities require time, capacity and holistic approaches, and can easily be deprioritised, particularly if there are not incentives in place to drive action.

Technology can only help to reduce disparities if designed carefully

Digital technologies have the potential to reduce burdens on the NHS workforce through automation and artificial intelligence, freeing up staff resources and establishing uniform processes.

But health tech must be designed so that it does not perpetuate existing inequalities. Much has been discussed about lower access or confidence in digital tools for different cohorts, such as older people or those with lower digital literacy. The newly re-integrated digital teams in NHS England will need a clear focus on how tech can enhance outcomes for all communities, not just the lowest hanging fruit.

There are also more complex barriers that need to be addressed, as demonstrated by an example in skin cancer diagnosis.

The creation of an algorithm to diagnose skin cancer was a significant achievement. However, in the paper announcing the algorithm, the examples of images used in the build process did not show diverse ethnicities[i]. This led to concerns that an automated diagnostic tool could actually lead to worse outcomes for different ethnic cohorts.

What is the Government planning to do next?

With a White Paper on Health Disparities due, a Health Secretary committed to tackling “the disease of disparity”, and a new Office for Health Improvement and Disparities, the Government has shown its commitment to resolving health inequalities. They were elected in 2019 on a manifesto which promised to “Level Up” the country.

But when the Levelling Up White Paper was published earlier this year, it was clear that the economic impact of the pandemic has had a significant impact on the Government’s ability to deliver their agenda, and the subsequent budget further underlined the narrow focus on reinvigorating the economy. As the cost-of-living crisis grows, it’s difficult to imagine that the Health Disparities White Paper will be supported by the kind of long-term funding commitment needed from the very top to make a real difference on the ground.

With many avenues and levers for change, there could be huge potential to make a meaningful difference in health inequalities; but without careful planning to overcome challenges, renewed policy attention and NHS reforms could prove a wasted opportunity.

 

[i] Esteva A, Kuprel B, Novoa RA, Ko J, Swetter SM, Blau HM, Thrun S. Dermatologist-level classification of skin cancer with deep neural networks. Nature. 2017 Feb 2;542(7639):115-118, https://pubmed.ncbi.nlm.nih.gov/28117445/

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How businesses can support the people of Ukraine

Like many other businesses, WA is doing what it can to help support the humanitarian efforts in Ukraine. We’ve pulled together some information on what businesses have been doing and some resources to use if you’d like to help on an individual or company wide level.

 

How businesses can support the people of Ukraine (PDF)

 

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Leadership on a precipice

Boris Johnson stands at the edge of the precipice, his fate in the hands of parliamentary colleagues, many of whom see him as an electoral liability. It is a stark contrast to the aftermath of his 2019 electoral triumph which saw him become the most powerful sitting Prime Minister since Tony Blair. It is now very unlikely he will lead the Party into the next election.

But as Westminster awaits the publication of Sue Gray’s report, exactly how and when might his fate will be sealed remains unclear. So what are the possible scenarios, and what do they mean for organisations seeking to engage with political stakeholders?

Scenario 1: Sue Gray’s report delivers a killer blow

What happens in this scenario?

The contents of Sue Gray’s report are sufficient to trigger the critical threshold of 54 Conservative MPs delivering letters of no confidence to Graham Brady, the 1922 Committee Chair, and the Prime Minister loses the subsequent confidence motion. In this scenario a Conservative leadership election will commence with Rishi Sunak and Liz Truss the clear front-runners.

What does this mean for policy development and political engagement?

All formal Government policy processes will be put on hold pending review by the new Prime Minister and a newly assembled Cabinet. In many areas there will likely be consistency, albeit after a delay of some weeks/months. But there are clearly opportunities for business to seek changes of direction or emphasis in a number of areas under a new administration.

New faces will rise to positions of power and influence within the government. It will be important to quickly engage with new ministers and advisers, and ensure you have a broad base of advocates within the Party. Any policy agendas that were not explicitly backed in the last manifesto will be most subject to change and there will be an opportunity for a new leader to row back on anything controversial, such as the planned National Insurance increase.

However, the core challenges filling the new Prime Minister’s in-tray will remain the same: tackling the cost of living crisis, decarbonisation, post-Covid economic recovery and defending ‘Red Wall’ seats in the Midlands and the North.

Scenario 2: MPs attempt to wield the knife but the Prime Minister clings to power

What happens in this scenario?

As in scenario 1, Sue Gray’s report triggers the necessary 54 no confidence letters but the Prime Minister manages to win the subsequent no confidence vote. Under current Party rules, a formal leadership challenge using this mechanism could not be triggered for another twelve months. The Prime Minister’s authority would still be severely damaged but his administration would limp on.

While his team would attempt to present the leadership issue as having been resolved, Theresa May’s experience showed that the danger would still remain. A poor performance at the local elections in May or inability to pass a significant piece of legislation could still trigger another crisis, albeit with less clarity over the mechanism to remove him.

What does this mean for policy development and political engagement?

In this scenario, policy development and delivery of key Government priorities could be slowed down or changed in any area that is remotely controversial given the Prime Minister’s diminished political capital. The Cabinet would become stronger and backbench Conservative MPs would be emboldened to press their own agendas. Whereas before almost all policy was ultimately dictated by and decided in No 10, there will be much more opportunity to influence policy via a wider set of stakeholders.

Controversial issues such as the National Insurance increase will become much harder to push through and the Government’s overall direction will increasingly be subject to influence from the various factions on the Conservative backbenches. For example, No 10 will be under severe pressure from backbenchers to take a more interventionist approach to tackling the cost of living crisis, with energy bills the next high profile lightning rod. Furthermore, there will be a significant shake-up of personnel in No 10 – officials and advisors – in an attempt to draw a line under recent events and move on.

However, uncertainty will continue to hang over the future of the Prime Minister with potential candidates to replace him continuing to cautiously prepare for the day when the ball might “come loose at the back of the scrum”. This all means it will be important to factor in a broader, more diffuse range of stakeholders who can influence policy when conducting engagement campaigns.

Scenario 3: MPs keep their powder dry a little longer

What happens in this scenario?

The Sue Gray report comes and goes without seeing 54 letters submitted to Graham Brady. The Prime Minister is damaged, embarrassed and forced to refresh the Number 10 team but his Government limps on. This is similar to scenario 2 but his authority is in some ways even more diminished with the threat of a confidence vote constantly hanging over his administration. Every political challenge in the coming months is viewed through the prism of Johnson’s leadership and every mis-step could prove his last. The May elections and any big tests in Parliament will take on added significance.

What does this mean for policy development and political engagement?

This would look and feel very similar to scenario 2 but with a greater sense of the Prime Minister living on borrowed time. Every major political and policy challenge would be viewed through the prism of whether it could trigger 54 letters and the bleed of power from No 10 to Cabinet members and backbenchers would be even more pronounced. All eyes would be on the potential leadership candidates to see how any comment or pronouncement would indicate a shift in policy.

The local elections in May would be framed as a de-facto referendum on the Prime Minister’s leadership and his policy agenda would face challenge at every turn. Broadening out the stakeholders you engage will still be critical as you will need to demonstrate that any change is backed by as many factions and influencers as possible. There will also be more opportunities to slow down or amend any policies that could attract the ire of mutinous Conservative MPs.

In all scenarios, we are about to enter a new, less predictable political phase in Westminster. The landscape of decision makers and influencers looks drastically different to that of twelve months ago and anyone seeking to influence change will need to navigate it with care.

 

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