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?