UK Government Archives - WA Communications

A Trump victory: What does this mean for the UK and beyond?

Chair of the WA Advisory Board and Former Permanent Secretary Sir Philip Rutnam, and Senior Political Advisor and Former Labour Special Advisor Jennifer Gerber, give their take on the impact of a second Trump presidency.

What does a Trump victory mean for the Government in the UK?

It’s an understatement to say there is no love lost between Labour and Trump’s MAGA Republican party.

The new Leader of the Conservative Party wasted no time challenging the PM on his Foreign Secretary’s previous comments about Trump (describing the now President-Elect as a “profound threat to the international order” and a “neo-Nazi sympathising sociopath”). There is speculation about David Lammy’s future, though it’s unlikely any move will happen independently of a wider future reshuffle.

We can also expect Trump to remember the help Labour gave Kamala Harris, and to want to extract something from Starmer early in their relationship.

But the UK will have to build a relationship with the new administration, however appalled its MPs and Mayor of London are by this.

The good news is we have good machinery in Washington and London that will be all over helping us to adapt. Unlike 2016 lots of scenario planning has been done. The key thing will be getting time with likely nominees for all the senior posts in Trump’s Cabinet and White House, and building links in Congress. The latter is easier because at least we know who they are. Expect Trump to take a long time making his own appointments, even if it is much slicker than last time. Britain also still has friends throughout the Republican Party, particularly on the security side.

It also appears that a political appointee for US Ambassador is off the cards and Peter Mandelson and David Miliband can stand down.

The real issue is whether the Government here is remotely ready for the big challenges that go with a Trump victory?

The challenge now and in the years ahead is huge – both in terms of domestic repercussions, on our place internationally and on our role in Europe – including the likelihood of more spending on defence, risks to the economy (through tariffs and pressure on UK Corporation Tax rates), and potentially being sidelined in discussions to end the Russia-Ukraine conflict.

The UK, bruised and isolated after Brexit will now have to show that it still has the ability to reach out beyond its shores and build strong relationships with those countries in Europe committed to defending democracy and the rule of law.

It will have to face up to the reality of increased NATO and defence funding and an emboldened Putin which will mean supporting those multilateral institutions we need to push back against Russian aggression.

Europe cannot take for granted US military support and a conversation with the British public about what this means will be uncomfortable but necessary.

What happens next in DC?

People and politics. Presidents make 4,000 political appointments to the executive branch, of which 1300 need Senate confirmation. (A comparison in the UK would be everyone in the Civil Service down to DG, some Directors, all Ambassadors, plus the heads of public bodies and regulators.)

Cue delay and wheel-spin, even in the best run administration. The really key appointments – Treasury Secretary, Secretary of State, AG, USTR, National Security Adviser, etc – are all massive calls which are already big media stories. Expect Trump to negotiate with multiple candidates.

But in terms of getting things done, it can be the second or third level person that is critical for, say, new regulation on aviation security or action on money laundering. That can take months. Follow what is happening in Congress too. Trump is now incredibly powerful in the Republican Party, but there is huge scope to influence the trajectory of policy by building relations quickly with Committee members, new Congressmen and Senators.

So what does Trump mean for the economy?

We’re already seeing the markets’ take. The US already has a large fiscal deficit, about 7% of GDP (compared to 4% in the UK), and Trump’s tax cuts could add heavily to this unless he cuts spending heavily (he hasn’t promised that). Fiscal loosening will be matched by higher interest rates and so a higher dollar.

Growth may be higher too but the big risk there is tariffs. He’s threatened 60% on Chinese goods and 10% on everyone else. No doubt there’ll be a negotiation but that in itself will create volatility. If implemented in full, US GDP could fall by 1.5%.

Mexico would be worst affected, but the UK would be very exposed as a small open economy: GDP growth down by 1% and price levels up 2-3% over a couple of years. That would count as an economic shock, meaning higher interest rates and more public spending cuts or tax rises to bring our deficit back under control.

In the long term, the really big issue is whether the markets will keep financing the US deficit with a low risk premium. If that ever changes everything in the world economy will change. Meanwhile, China will keep looking for ways to challenge US dominance, and that means the dollar as the world’s reserve currency.

What about sector impacts?

Trump will cut spending on green energy, boost production of fossil fuels, and pull the US out of The Paris Agreement. Expect that to mean lower oil and gas prices, and a tougher time for some renewable projects globally.

However, this is good news for the aviation, oil and gas sectors, and those auto manufacturers who have been slow to shift to EVs. It is also good for some measures of US and global growth, however, not enough to stop the wider shift to renewables now there’s been a transformation in costs, and the scale of investment and innovation.

Expect China to use the opportunity to further strengthen its lead in technology and position in climate politics.

Politically, Trump has given a boost to populism everywhere.

Finally, Labour strategists will be asking themselves what they can learn from the Democrats failure – especially in how Labour reaches out to disillusioned voters and those who supported Reform, key to Labour securing a second election victory in 5 years time.

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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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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:

£650 million (including both previously announced and genuinely new) funding targeted towards manufacturing, skills and infrastructure:

- £121 million to improve commercial clinical trials as part of the Government’s response to the Lord O’Shaughnessy Review. This includes through reducing trial approval time, developing a new approach to contracting, providing real-time’ data on clinical trial activity, and creating new clinical trial acceleration networks (CTANs)
- £154 million to upgrade the UK’s biological data bank
- Up to £38 million for a Biomanufacturing Fund
- £10 million new funding to bolster UK health resilience
- £42.7 million for a new centre in Liverpool to research the connections between mental, physical and social conditions

Relaunching the Academic Health Science Networks as Health Innovation Networks with a focus on boosting innovation by sharing best practice between the NHS, academia, industry and local communities
£10 million for the MHRA to establish new regulatory recognition routes using approvals from Australia, Canada, the EU, Japan, Switzerland, Singapore and the USA
An Innovative Devices Access Pathway to support med-tech innovators to generate the evidence they need for regulatory approval

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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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.

51% of the public are confident that their local pharmacist could provide them with high-quality medical advice for a minor health condition.
The public are more likely to turn to pharmacists (39%) first for a minor health concern, than GPs (33%) or NHS 111 (14%). This is particularly the case for women (46%) and those aged over 55 (54%).

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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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 15^th 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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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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‘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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‘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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