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:

• It’s still the economy stupid: Rachel Reeves is considered a class act and has carefully manoeuvred the Labour Party to be seen as a safe pair of hands with the economy, spending time wooing business and dramatically improving her media performances. Not quite believing the gift that was handed to her last Friday, she now needs to occupy the ground of economic competence that has been vacated and consolidate Labour’s poll boost.
• Some meat on the policy bones: while caution remains the watchword of Labour this week, we have started to see a pattern emerging of what a Labour government could look like with some interesting announcements. A commitment to R&D spending to support innovation at the heart of a new industrial strategy; rail re-nationalisation (the populist nationalisation), helped enormously by the Herculean task it took to get Liverpool on a train; reinstating the top rate of tax; a National Wealth Fund, offering returns for taxpayers while targeting investment towards infrastructure; zero carbon energy by 2030; new powers to local and regional leaders; and a commitment to substantially increase the percentage of social housing as part of the UK’s housing stock. All solidly centre left policies that hark back to the days of Labour governments past.
• Handed a poisoned chalice: Yet the legacy they would inherit if elected, will be nothing like the favourable conditions that Labour found in 1997. The room for manoeuvre for an incoming Labour administration is non-existent; for example, the £28 billion a year borrowing identified to tackle climate change no longer exists because of the spiralling cost of UK debt. As one leading light in the party said, “the problem with referring back to the 1972 Barber budget, is that it was a Labour government in 1976 that had to go to the IMF to repair the damage and then pay the price in 1979.”
• Country first: Keir Starmer capped off an encouraging week for Labour with easily his best speech as leader. While he will never provide the soaring oratory of Blair or Brown, he has grown into the role, and he gleefully occupied the space that had been gifted him at the centre of British politics with the departure of Johnson and the tilt to the right under Truss. While the rhetoric of ‘country first’ has not been seen since the conference speeches of Tony Blair, he is probably the wrong comparison. Instead, Keir Starmer represents a Labour tradition closer to John Smith, Harold Wilson, and indeed Clement Atlee. The question that will be answered at the next election is, is the country ready once again for a re-pitch of classically social democratic policies packaged up for the challenges of the coming decade.

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.