Industry

Industrial strategy

In September 2022, Jonathon Reynolds released Labour’s Industrial Strategy titled: “Prosperity through Partnership”.

It has four missions: delivering clean power by 2030, harnessing data for the public good, caring for the future, and building a more resilient economy.

It announced that Labour will:

• Establish the Industrial Strategy Council and place it on a statutory footing with the Committee on Climate Change and the Office for Budget Responsibly.
• Match-fund investment in a decade-long plan to drive innovation in the steel sector, including hydrogen and electric arc furnace technology.

• Secure future participation in Horizon Europe.

• The Party will also seek to establish a council for economic growth

Business strategy

In May 2023, the Shadow Chancellor, Rachel Reeves released a policy paper titled: A new Business Model for Britain.

It argues for a “modern supply side” policy. This involves the state taking a more “strategic” role to expand the nation’s productive capacity, improve industrial production and improve the resilience of the economy to external shocks.

Policies include:

• Strong fiscal rules

• Replacing the current business taxation system

• Replacing the Apprenticeship Levy with a new Growth and Skills Levy

• Introducing a new generation of Technical Excellence Colleges, to tailor local jobs to all parts of the country.

• Creation of Great British Energy

• Reform of the planning system

• The creation of the British Business Bank

The Party will repeal the Trade Union Act 2016, the Strikes (Minimum Service Levels) Act 2023 and the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022.

Small Business Strategy

Reynolds laid out Labour’s approach on 29 November 2023. He promised that the Industrial policy will deliver certainty and stability and re-affirmed their commitment to the industrial strategy council.

Labour will: legislate to tackle late payments, scrap business rates and replace it with a “fairer” system, introduce new Technical Excellence Colleges connected to local economic needs, improve access to finance, improve chances of public contracts for SMEs and speed up the planning system.

NEW: Labour first announced their New Deal for Working People in July 2021. Since then Angela Rayner had developed the the policies further. Announcing that on January 1 2024 that:

• Ban zero hour contracts
• End fire and rehire
• Scrapping qualifying periods for basic rights.

On 10 April 2024, Labour announced a 5-point plan for retail in order to “breathe new life” into highstreets:

1. Tackle anti-social behaviour and shoplifting by putting 13,000 more neighbourhood police and PCSOs back on the beat and scrapping the £200 rule which stops shoplifting from being investigated.
2. Roll out banking hubs to guarantee face-to-face banking in every community boosting local high streets and shops.
3. Labour will replace business rates with a new system of business property taxation which rebalances the burden and addresses the imbalance with digital retailers.
4. End late payments for small and independent retailers. Labour would introduce tougher regulations to ensure that late payments are reduced.
5. Revamp empty shops, pubs and community spaces by giving communities the ‘right to buy’ community assets to revamp high streets.

Labour’s accompanying analysis also stated that there are 40,000 fewer businesses registered for VAT due to rising energy bills, mortgage and rent payments.

Labour List have published the final policy platform ahead of the conference. They include a broad range of potential new policies in the manifesto:

• Labour will reform the British Business Bank, to make it far more ambitious and attract external investment.

• Aim for 3% of GDP spending in R&D across the public and private sector.

• Reform workers’ rights, banning exploitative zero-hour contracts and improving security for hourly contracted work.

• Modernising trade union legislation to restore industrial relations.

• Double the size of the co-operative sector in the UK.

NEW: The Financial Times reported on 1 May 2024 that Labour are set to unveil a weakened package of rights. The discussions with Labour include a period of outreach to business on policies and formal consultations.

Net zero/energy transition

The Green Prosperity Plan, released by Rachel Reeves and shadow Energy Security and Net Zero Secretary Ed Miliband in June 2023, will see the state make public investments in industries vital to Britain’s future success in clean energy.

It aims to cut energy bills, create good jobs in industrial heartlands, deliver security and provide climate leadership.

The plan would:

• Establish the National Wealth Fund.

• Establish GB Energy.

• Reform of planning to allow low carbon infrastructure projects to be sped up.

• UK planning policies for onshore wind will be devolved.

• Ban on new oil and gas exploration and development in the North Sea.

In February 2024, Starmer announced a reduced financial commitment for the plan from £28 billion a year to £4.7 billion.

Labour’s policy programme has put forward the following policies:

• More than double onshore wind capacity, triple solar capacity and quadruple offshore wind capacity.
• Fundamentally reform the system of energy supply, generation and transmission and distribution.

“Securonomics” Trade Policy

In a speech at Canary Wharf on 16 November 2023, Business and Trade Secretary Jonathon Reynolds laid out Labours trade policy.

He said that their trade policy would reflect the party’s “securonomics” approach, linking trade to a strong industrial policy. Trade policy would reflect the changing global conditions and attempt to build resilient supply chains”, while recognising that “western industrial capacity is important”.

Reynolds also criticised the Government’s “scattergun” approach of trade deals, but said that Labour would complete the deal with India.

He also said they would pursue fewer deals but focus on quality instead of quantity.

Reynolds also stated that the Government’s decision to reverse screening rules for FDI was worrying and argued that Chinese investment cannot be “treated the same way”.

• Regarding international investment in the UK, Shadow and Business Trade Secretary Jonathon Reynolds has criticised the Government’s proposal to water down screening rules for foreign investment, indicating a Labour Government would not follow suit in trade policy.

• Reynolds argued strong screening processes are needed to ensure the UK is not at odds with its allies.

Trade

Relationship with the European Union (EU)

In January 2023, Sir Keir Starmer said he would lower trade barriers with the EU within 18 months and wanted to reach new agreements on food, medicines and animals.

He has called for “closer trading relations”.

In June 2023, shadow Foreign Secretary David Lammy set out Labour’s approach to the EU. He stated that a Labour Government will focus on “ turning the page on the era of acrimony” with the EU and restart a “structured dialogue”.

He also said: “We will go through the trade deal, page by page, seeking ways to remove barriers and improve opportunities for business”.

Shadow International Trade Secretary Nick Thomas-Symonds pledged in September 2022 that a Labour Government would require British trade negotiators to ensure all regions of the UK benefit from new agreements.

NEW: In April 2024 Jonathon Reynolds committed that Labour would seek a new veterinary agreement with the EU.

Push for an EU visa waiver for UK touring artists and the reduction of other administrative burden.

The LabourList document outlines that the party will reform the Trade Remedies Authority, to safeguard industry from trade dumping practices.

“Britain Reconnected”

In March 2023, David Lammy unveiled “Britain Reconnected”- a paper outlining his approach to foreign policy. The paper focused on strategic foreign affairs but also included policy proposals on trade:

• Labour would lobby for the UK to be exempted from the US Inflation Reduction Act

• Re-joining the EU single market ruled out

• Pursue closer trade and security partnerships, particularly France and Germany

• Trade focus on the EU, moving away from the Government’s Indo-Pacific tilt.

Worker centric trade policy

Former shadow International Trade Secretary Nick Thomas-Symonds said in July 2023 that he wants to learn from President Biden’s “worker-centric trade policy”.

Mr Thomas-Symonds said: “I’m in the US to see their ‘worker-centric trade policy’ in action and look at how we can work together to drive up standards… Labour will put workers and jobs at the heart of trade policy”.

Financial Services

Access to cash

In November 2023, Shadow Chancellor Rachel Reeves announced plans to increase the network of banking hubs and give regulators greater power to guarantee access to cash across the country.

Under the proposals:

• Labour would promote the creation of at least 350 banking hubs on local high streets, in addition to the 24 banking hubs the UK currently has.
• Areas without high streets will be prioritised firstly for new infrastructure.
• The FCA would be granted new powers to avoid ‘banking deserts’.
• Maintaining face-to-face banking services will be recognised as a key priority that the Conservatives have taken some steps to address.

NEW: Audit reform

First announced in September 2023 and recently reiterated when speaking to the ICAEW in May 2024, shadow Business and Trade Secretary Jonathan Reynolds noted that priorities for its first term of Government would include audit and corporate governance reform, if elected.

He added the Audit, Reporting and Governance Authority would be part of whatever measures to be brought forward. Reynolds stated that putting ARGA on a statutory footing requires primary legislation which Labour would push through.

Investment

In January 2024, Shadow Chancellor Rachel Reeves has committed to investing alongside business through a new National Wealth Fund that would leverage £3 of private sector investment for every £1 that is put in.

During the World Economic Forum in Davos, she emphasised that boosting private sector investment is at heart of Labour’s growth strategy

Pension Policy

In November 2023, Shadow Chancellor Rachel Reeves said Labour would conduct an extensive review of the entire pension system, including private sector defined contribution (DC) and defined benefit schemes, and local authority pensions.

Reeves also unveiled plans to go further on Hunt’s Mansion House reforms to bring in more pension cash to the UK and give powers to the Pension Regulator to force smaller schemes to wind up or merge to create sufficient scale for new investments.

Labour has not announced a pension investment target but in November 2023 indicated their eagerness to drive increased pension investment into the UK economy.

NEW: Tax

Carried interest policy

In April 2024, shadow Chancellor Rachel Reeves doubled down on Labour’s plan to alter the current carried interest regime which sees private equity and hedge fund executive pay outs taxed as capital gains (28%) and not as income (45%).

Labour has said it wants the levy to match the marginal income tax rate of 45% which could raise an additional £400 million per year.

Tax cuts for high earners

While at the World Economic Forum in Davos, Shadow Chancellor Rachel Reeves signalled that a Labour Government would promote tax cuts for top earners.

She noted her goal to lessen the impact of Rishi Sunak’s six-year stealth tax raid and lower taxes.

This was Labour’s strongest signal of their desire to appeal to higher earners, with Reeves stating her desire to lower taxes on workers across the spectrum, including those paying the highest 45p rate.

Corporation tax

During a meeting with business executives at the January 2024 World Economic Forum in Davos, Shadow Chancellor Rachel Reeves indicated that Labour would not increase corporation tax from its current level, stating that “corporation tax is at a competitive level”.

Reeves also noted that the Labour party “wouldn’t do anything with tax to deter investment”.

Tackling the tax gap

In April 2024, the shadow Chancellor Rachel Reeves pledged to fund policies to tackle tax dodgers which she says would raise an additional £5 billion per year for the Exchequer.

Labour cites the tax gap in the UK as standing at £36 billion and says that its plan would:

• Boost compliance activities in HMRC to recover more owed tax.
• Invest in technological transformation to improve customer experience and reduce the tax gap.
• Make legal changes to support this effort restoring a “genuine deterrent” to tax evasion.