DeHavilland has produced a business and financial services round-up from this week’s Labour Party conference.
- The conference was light on new policy. However, it showed a united party that reaffirmed its economic strategy.
- Securing sustainable economic growth has been placed at the heart of Labour’s industrial and trade policies.
- Throughout the conference, shadow Ministers reiterated the need for the state to build a strong partnership with the private sector to drive innovation and support the green transition.
- Establishing a stable economic system is a top priority, as years of turbulence in Government have scared off investors and pushed companies to list themselves outside the UK.
- Labour will push for a closer relationship with Europe in trade and security, insisting they will renegotiate the TCA in good faith. Labour stated that any regulatory divergence from the EU will be examined closely to ensure it supports British business to prosper.
- In line with Labour’s plan for sustainable economic growth, shadow Ministers highlighted the need for consultations with financial experts before making huge spending decisions.
- Labour’s £28 billion climate pledge will be deployed over a long period of time to allow for necessary discussions with financial experts.
- Labour’s policies were well received by the audience and panellists alike, with businesses applauding the coherent long-term strategy suggested.
- The shadow Ministers were well-engaged throughout the fringe events. There was a clear appetite from the shadow Cabinet to listen to suggestions from the audience, suggesting there is still space for industry to influence policy.
Shadow Chancellor Rachel Reeves has placed economic growth as the defining mission of the next Labour government. This was further echoed in the fringe events, as MPs argued that economic growth would help solve the complex challenges they will face if in government.
Ms Reeves also placed financial stability and responsibility at the heart of her ethos. She announced a new charter for fiscal responsibility and committed to the independence of the Bank of England and the Office for Budget Responsibility.
Ms Reeves discussed the growing economic insecurity the UK faces. She introduced a new approach, dubbing it “securenomics”. Labour would build resilience and achieve security for the British economy by reducing its reliance on global markets.
Ms Reeves has set out a cautious yet ambitious policy platform ahead of the general election campaign. It’s clear that the next Labour government will be fiscally conservative, but they are willing to take a far more active role in the economy to achieve a successful partnership with business to secure its mission-led approach.
Tulip Siddiq, shadow Economic Secretary, reiterated Reeves’ call for establishing a stable economic environment following the turbulence and multitude of changes within the current Government. Investment intentions correlate with perceptions of the future strength of the UK economy, so long- and medium-term planning must be prioritised to reduce levels of uncertainty. Attracting investment and encouraging firms to list themselves in London is a key priority in achieving sustainable economic growth without increasing borrowing.
Ms Siddiq announced the shadow Treasury team’s commitment to taking a more meaningful approach to the economy and defining their offer to the City. Labour intends to build on existing regulatory frameworks, such as that relating to ring-fencing and green-covered bonds, despite fears that the party would come in and rip up the Conservative-made frameworks.
Improving financial literacy was another key point, reaffirmed throughout conference by several Ministers. There was a focus on the hospitality industry, with apprenticeships and other alternatives to university suggested as a potential area for investment. Financial literacy and awareness were also emphasised as a means to tackle economic online fraud and scams, which have become a national crisis.
Research and innovation
Shadow Minister for Innovation and Technology Chi Onwurah argued that innovation is central to securing economic growth. Ms Onwurah said a Labour government would actively build a strong partnership with private businesses to foster greater collaboration and improve innovation.
Labour committed to supporting innovation clusters to drive innovation and reduce regional inequalities. Ms Onwurah also placed universities at the heart of this regional growth. As the MP for Newcastle, Ms Onwurah is keen to boost research and innovation outside of the southeast and was enthusiastic about the prospect of innovation-led growth.
Shadow Minister for Industry and Decarbonisation Sarah Jones also pointed to the important role research and innovation will play in the green transition. Ms Jones made clear that she is still learning about her brief and was very open to new policy ideas from the panel and audience.
Labour’s support for British R&D is strong and is seen as a useful lever to drive economic growth outside of the southeast.
It was clear that Labour sees a strong and resilient industrial sector as vital to securing economic growth.
Stephen Kinnock argued a strong manufacturing sector was essential to support the UK’s green transition. Mr Kinnock argued that the steel industry is essential to a resilient economy. Sarah Jones saw industrial decarbonisation as an opportunity to create good jobs and drive economic growth.
Labour sees the UK’s industrial strategy as crucial to the transition to net zero. Whether it be the decarbonisation of the sector itself or the crucial role manufacturing will play for new products, Labour is firmly committed to bringing back a strong, revitalised industrial sector.
The Green Prosperity Plan and Labour’s Industrial strategy were well received, with business applauding the long-term vision and certainty it provides.
The net zero question was top of the agenda throughout the fringe events, and it is clear that Labour is committed to working closely with the industry to help drive the green transition.
Ed Miliband, the shadow Energy Security and Net Zero Secretary, pledged that GB Energy would invest £1 billion annually to develop local energy projects. He also said that a Labour government would double onshore wind, treble solar capacity, and quadruple offshore wind capacity.
New policy announcements on net zero were confined to Ed Miliband’s speech. However, shadow Minister for Climate Change, Kerry McCarthy spoke on Labour’s ambitions to decarbonise the grid by 2030.
Ms McCarthy argued that Labour was prepared to make difficult decisions on planning to ensure grid connections are developed. She also said that the shadow Cabinet is assessing the role of heat networks, given the success of the Bristol Heat Network. Despite the general optimism around Labour’s approach, the audience were very sceptical of Labour’s target to decarbonise the grid by 2030.
Newly appointed shadow Exchequer Secretary Tanmanjeet Dhesi MP emphasised the importance of having a green Treasury, which can only be achieved through establishing economic policies aligned with net zero. Mr Dhesi reiterated that a Labour government would not reinstate the northern leg of HS2. Still, he acknowledged transport as a top priority sector due to high emissions and the need for increased capacity.
Mr Dhesi also noted that Labour’s £28 billion climate investment pledge would not be implemented in the party’s first year in office to ensure time for the party to listen to financial experts and sustainably grow the economy. Over time, the deployment of the climate pledge will allow for all necessary consultations to be held and ensure that taxpayers’ money is not wasted.
Ms Siddiq highlighted the need for regulation reforms relating to green-covered bonds, which allows investment to be increased, as green infrastructure has the potential to unlock £10 billion of capital if dealt with appropriately.
Building a resilient economy that could withstand external shocks was vital to the shadow Chancellor’s speech. The defining principle is to have a robust domestic economy that can build and export globally to reduce our reliance on other countries.
Gareth Thomas, shadow Minister for Trade, echoed the commitment to improve Britain’s trade. Labour would look towards enhancing trading relations with Europe and move away from the Conservatives’ Indo-Pacific tilt. To help provide greater certainty, he committed to publishing a trade White Paper if elected.
Nick Thomas Symonds, Shadow Minister Without Portfolio, was also critical of the level of support and information available to SMEs when exporting. He said Labour would be a more significant partner for SMEs and improve the Government’s website to make trading easier.
Like other policy areas, Labour would take an active approach to trade, supporting firms to export, re-orienting their approach towards Europe and taking a strategic approach to trade rather than “cherry-picking” trade deals.