Reopening the property market during lockdown
Reopening the property market during lockdown
From the Queen’s Speech to the next election: what now for the government’s agenda?
From the Queen’s Speech to the next election: what now for the Government’s agenda?

Posts Tagged ‘Labour’

The challenges ahead for Keir Starmer

Keir Starmer was elected Leader of the Labour Party on Saturday with a large majority and an overwhelming mandate for change.

His platform was clear and simple: he was the ‘unity’ candidate ready to rebuild the party and take it into power at the next election. His pitch was aimed at Labour’s ‘soft left’ and more closely resembled that of his predecessor’s than some might have imagined, with early pledges to abolish tuition fees, nationalise core industries and introduce a Prevention of Military Intervention Act.

Now that Starmer has won the election, what sort of leader will he be? And, importantly, what does it mean for the business community?

Unity and the path to power

Political parties are rarely successful and rarely win elections when they are divided. Starmer is fully aware that the disunity and infighting that plagued the party under Jeremy Corbyn had a negative contribution to its electoral success, and so he has taken on the difficult task of trying to unify different groups within the party.

His Shadow Cabinet reflects this commitment and is an early indicator that his rhetoric around ‘unity’ is serious. He offered key roles to his two leadership rivals and kept some of Corbyn’s allies in the Shadow Cabinet, including Andy McDonald and Cat Smith, in addition to Rebecca Long-Bailey.

He promoted some ‘moderate’ MPs too, such as Rachel Reeves, Jonny Reynolds and Ian Murray, and maintained some element of continuity by re-appointing Jonathan Ashworth, Luke Pollard, Nick Brown, and Baroness Smith to their roles.

However, most of his appointments were from the ‘soft left’ and were MPs that had served as junior members of Corbyn’s frontbench both quietly and effectively.

Starmer has struck a clever balance here, appointing MPs that had worked under Corbyn, but not necessarily supported him, and that the majority of Labour MPs will be happy to get behind.

The appointment of Anneliese Dodds as Shadow Chancellor is the perfect example here. Starmer could have promoted a more high-profile MP to the role, such as Reeves or Yvette Cooper, but both are more economically centrist than Starmer and could have been divisive appointments.

Instead the new leader chose the comparatively less well-known Dodds for the role, who had quietly built up a reputation for herself as a talented Shadow Financial Secretary. Indeed, John McDonnell was quick to give his successor his “full support” and praise the work she did in his team.

Other notable examples include promotions for Preet Gill, Louise Haigh and Marsha de Cordova.

Policy platform

Although we are only days into Starmer’s premiership, he has thus far tried to make good on his ‘unity’ pledge as well as his promise to work to eradicate anti-Semitism ‘from day one’. His first act as leader was to write an apology letter to the Jewish Board of Deputies, and later in the week he held a follow up call with Jewish leaders, both of which were welcomed by the Jewish community.

In fact, the only candidates for Leader or Deputy Leader not given a role in his Shadow Cabinet were those that didn’t sign the Board of Deputies’ pledge.

While Starmer will inevitably have to navigate coronavirus-related challenges over the next few months, we do expect that the policy pledges that he set out during his leadership campaign will form the basis of his early policy platform.

He has been true to his word thus far.

A Corbyn-lite approach

Starmer wants to focus on economic justice through increased taxes, social justice through the abolition of universal credit and climate justice through the support of a Green New Deal. He believes that “public services should be in public hands, not making profits for shareholders” and supports common ownership of rail, mail, energy and water, he wants to strengthen the trade union movement and workplace rights, and he wants to devolve power to the regions.

In foreign policy, in an indirect attack on Tony Blair, his firm commitment is “no more illegal wars”. He wants to introduce a Prevention of Military Intervention Act, put human rights at the heart of foreign policy, and review all UK arms sales.

These policies reflect many of his predecessor’s manifesto commitments and would not have looked out of place as Long-Bailey’s pledges.

He has also largely kept the structure of the Shadow Cabinet that Corbyn created, even maintaining the position of Shadow Employment Rights and Protections Secretary as a senior frontbench role.

Essentially, Starmer is adopting a Corbyn-lite approach; he is not a return to New Labour.

Therefore businesses looking to engage with the Labour leader and his team will need to be recognise this and tailor their approaches accordingly.

We expect he will be much more open to meeting with businesses than Corbyn was, who only engaged with a trusted select few.

To be successful in engaging with him, businesses will need to demonstrate their commitment to Starmer’s core values; by paying their full share of tax, by having clear net zero goals, and by treating their workforce fairly.

Only then are they likely to be able to influence Labour’s agenda.

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404 Error: nationalisation not found

Nationalisation is back. Labour’s plans to nationalise parts of BT and offer a free national full fibre broadband service represent the most radical policy announcement of the election.

Should Jeremy Corbyn secure a majority, he has now pledged to bring all major utilities back into public ownership – gas, electricity, water, rail, mail and now telecoms. Such a move would fundamentally change the telecoms sector overnight with grave consequences for private network builders and retailers.

There will be much commentary on the commercial implications for the sector in the coming days.

However, it is also worth considering the political process that will be required to make this radical vision a reality.

Nationalisation: Getting the numbers

Firstly, it is important to remember that this whole agenda can only be delivered under a Labour government with a stable, workable majority.

Neither the Liberal Democrats or the SNP will back it under a confidence and supply agreement. There’s a long way to go in this campaign and the polls still indicate that Jeremy Corbyn has a lot of work to do to have any hope of securing a majority in December.

This announcement itself will be a major theme in the election going forward as free, high-speed broadband for all is likely to go down well with many voters.

The key question is whether it ultimately feels too good to be true and leads voters to question the credibility of a policy that will have a long list of detractors.

Learning from the past

But what if Labour do forge a way to power? How will the Party turn such a radical nationalising agenda into reality? Previous rounds of both nationalisation and privatisation took a great deal of time and political capital to realise.

Margaret Thatcher’s converse plans to re-privatise much of the same parts of the economy took three parliamentary terms to deliver. Ticking off Labour’s long list of target nationalisations in just one five-year parliament will be a mammoth of a task.

There are several significant elements that will require primary legislation for broadband nationalisation:

The political capital, technical complexity and potential legal wrangling resulting from just one of these three areas would daunt any government regardless of its majority. Yet collectively, even if a majority Labour government could overcome these three challenges and nationalise the broadband industry, it will only deliver one of the party’s five targeted nationalisations.

Nevertheless, it’s important to note that nationalising broadband is perhaps the most ambitious and complex pledge for Labour to deliver on.

A juggling act

Let’s not forget that on top of all this, a Labour government will simultaneously be renegotiating yet another Brexit deal with the EU, scrapping universal credit, setting up a new National Education Service and making significant investments and reforms in housing, social care and other areas.

The reality of government is that some agendas will have to be prioritised over others simply due to – if no other reason – the practical limitations on time and resource in the civil service.

Especially on the topic of Brexit, there is a question mark over whether Labour’s broadband proposal would comply with EU state aid rules, though they will cite recent rulings on Ireland’s public subsidy for broadband in their defence. It could nevertheless be a potential stumbling block in agreeing a new, closer economic relationship currently envisaged as the Party’s preferred approach.

Finally, were this to ultimately go through, the government would find itself taking on responsibility for a plethora of tricky issues that were previously the problem of private players in the sector. The debate over online safety and the level of responsibility that intermediaries such as ISPs have for harmful or illegal content distributed over their networks would suddenly become an in-house issue for government. Questions over net neutrality – whether ISPs can or should prioritise bandwidth for certain sites over others – as well as the control and use of people’s data, would also be questions government would have to solve as the sole service provider.

These are headaches that no government wants to grapple with and while this announcement is a potential game changer, it’s one which is still far from being realised.

Even if it ever is, it could come with a host of difficult unintended consequences attached.

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