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End of Year Review

It has been a year of Events and the term “news anxiety” entered the lexicon. A swathe of global elections formed floating icebergs round the great glaciers of superpowers.

I have just come back from Antarctica so excuse the metaphor. By the way, a wonder of Antarctica, thanks to the treaty, is that nobody owns this massive continent, and all are pledged to protect it environmentally. What a model for peace on earth.

The world order has been tested by the Russian invasion of Ukraine in 2022 and then the war in the Middle East following the Hamas led attack on Israel in October 2023. The media has predicted third world wars. And yet the year ends, with the leader of the free world, widely reported to be crazy, but apparently a catalyst for ending the two wars for which there seemed to be no solution.

The phrase “sane washing” is used by some who are coming to terms with President Trump. For those of us who have made their careers in the media, it is a year in which we should humbly concede that we know nothing.

The election in the UK was both expected and unexpected. The timing of it caught some of us on the hop, including those of organising the Braemar Summit. It was as predicted a Labour landslide, but the results were also turbulent. In my rural constituency in South West Norfolk, the sitting MP, Liz Truss, got 11,217 votes. The Labour MP won 11,847 votes. Reform 9,958 votes and the Independent 6,282 votes. It was like watching a mad game of marbles.

When the farmers revolted against Labour’s budget, some of those Tory MPs who lost their safe rural seats shrugged that it was Brexit all over again and that the farming communities reaped what they voted for. And at the end of the year, Reform is still a destabilising force, boosted from its support by the personality of the year – Elon Musk.

Tuesday 5th November the world changed. The US West Coast elite were reported to be heading for the Cotswolds as a safe haven. Steve Bannon, voice of Trump’s America responded in the Sunday Times: “They’re not resilient. They had every advantage of state power. They had the high ground. And guess what, we broke them and now they’re whining like little children.”

Free speech got a little rougher and conventions of political discourse also changed. Again, as Bannon put it, “Somebody’s got to break the system.” Musk started a running commentary on the UK as a woke basket case. He defended The Telegraph journalist Allison Pearson after the police visited her home following an anonymous complaint about one of her tweets.

In the new world, in a smashing up of the system, one of the most powerful figures in the world, with more that 200 million followers, can get engaged in a scuffle on a dot on the map.

It is somehow significant that Elon Musk is now in a race to control space. It is apt that the Booker Prize winner, Samantha Harvey’s Orbital, is about the view from the space station of this utterly beautiful planet, somehow obscured by politics of conflict.

The year of news anxiety has been accompanied by a sense of fragility. The announcement in February that King Charles was suffering from cancer, was followed in March by a personal message from Catherine, Princess of Wales that she too was being treated for cancer. It has been a year for compassion and resilience. Mortality also came to parliament with Kim Leadbeater’s private members bill on assisted dying.

Meanwhile, low-level malaise continued to afflict the nation with more than four million people of working age on sickness benefits. Achieving growth without productivity is a headache for business leaders and politicians.

But hope springs eternal. Business conditions may be hard but at Hawthorn we are seeing green shoots everywhere and, particularly in science and technology, huge leaps of innovation and scale.

This year, at Braemar in London, we celebrated the extraordinary advances in medicine under the heading The Age of the Cure.

It was a year when celebrities publicly lost weight thanks to one drug. On a bigger stage energy is undergoing a massive transformation.

And a purpose-driven young workforce looks to improve conditions as well as to generate wealth. I have been personally thankful to Tilly Roylance and Bella Streule from Hawthorn for their foundational work in creating a network of support for the women of Afghanistan FAWN and many other causes have been aided thanks to the volunteering spirit of this company.

The restoration of Notre Dame is somehow a metaphor for the robustness of the human spirit. A group of us who visited Kering headquarters earlier this year took a detour to glimpse the progress and I reckon we need to return to appreciate the full glory.

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Multilateralism staggers forward at COP 29, but businesses must be ready to take increasing responsibility and blame for sustainability impacts

Weak outcomes from international environmental summits in 2024 and a shifting political reality will put greater pressure on individual corporate responsibility

It’s not our fault, it’s the system that is broken. As an excuse for poor environmental practices, it is both an entirely fair position for corporate leaders to take, yet broadly unacceptable to a wide range of stakeholders. Companies should get ready for a new wave of scrutiny from their own employees, customers, NGOs, activist citizens and the media.

Both the recently concluded COP 29 climate talks, and COP 16 nature talks in October, resulted in weak outcomes. Few are holding out more hope of meaningful progress on an international treaty on plastics, with ongoing talks on this taking place in South Korea this week with little fanfare. Election results around the world seem to be taking us away from an era of greater cooperation and bold policymaking on urgent sustainability issues.

Ten years have passed since the landmark Paris Agreement in 2015 inspired optimism in the possibilities of collective action. Since then, a decade of delay and disappointments has shaken faith in the potential for multilateral solutions. Recent research from UNDP and the University of Oxford of 73,000 people across 77 countries, found that four in five globally want governments to take stronger action to tackle the climate crisis. And more than half are now thinking about climate issues regularly.

Those seeking to make a difference may increasingly start targeting individual companies, targeting their role in contributing to the environmental breakdown that is becoming increasing apparent. If a top-down approach isn’t working, you may well try bottom-up instead. Alongside pressure from informed stakeholders such as investors and regulators, it will be necessary to have a narrative suited to a broader audience.

Businesses typically have little choice but to operate within the boundaries of the economic reality in which they find themselves. In a system which fails to price in the true costs of pollution, and where destructive behaviours can result in financial rewards, it is hard to succeed by doing no harm.

Many companies have set ambitious targets and put significant resources into enhancing sustainability over recent years, recognising the reality of global challenges and making genuine progress. But they are now finding that while scientific predictions of climate change and biodiversity loss were broadly accurate, the political and economic system has been far less sensitive in responding to these impacts than they expected.

As a result, there has been a wave of companies quietly rolling back or readjusting the timeframes for their previous commitments. And as much as they might like to keep this out of the spotlight, it is not going entirely unnoticed. Individual businesses could become the focal point for feelings of frustration, upset and anger at environmental degradation, which could impact corporate reputation and brand value, or even affect a company’s license to operate.

In response to this, companies can adopt three complementary strategies that will help them to become more resilient to increasing reputational risks in these areas.

Embrace transparency to better own your narrative: there is a rising tide of information available on corporate sustainability, thanks to voluntary and mandatory reporting, sectoral analysis and ranking reports, along with commentary across media and social media. When you combine this with increasingly sophisticated AI and large language models, it will be far harder to hide your impacts and relative performance. What was once buried on page 176 of a PDF report can now easily be surfaced in response to a simple search query, and readily compared to competitors. If you aren’t disclosing your own activity and explaining the context, then your detractors could become primary sources for what stakeholders will find in their due diligence.

Early advocacy ahead of difficult decisions: where stretching targets and sustainable transformation is not possible without specific policy interventions, be honest about what is required and help provide governments with the mandate to make tough choices. Having a public track record of calling for accelerated change will ease criticism when you have been unable to deliver on long-term goals.

Don’t be afraid to pull away from the pack: a shift to a more sustainable economy will create winners and losers, and within every industry there are leaders and laggards. If you stand together as a sector on particular positions, which are favourable to the slowest movers, then you will share in collective responsibility for negative impacts. Businesses that see long-term value in being leaders (or fast followers) should position themselves clearly ahead of poorer performers, so they can make the most of the opportunities in competitive sustainability.

These strategies will not completely insulate businesses from reputational risks related to their sustainability performance, nor will they necessarily make a big difference to the economic barriers that are holding back progress. But they will help to keep important stakeholders on side and provide a stronger platform for future success, at the same time as potentially mitigating the high long-term costs of inaction on key sustainability issues.

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Tory Rebuild: New Opposition Leader Assembles Shadow Cabinet

Who would want to be Leader of the Opposition after such a crushing General Election defeat? Just five years ago, people were asking that question of Keir Starmer before he turned the tables and secured a whopping majority. It is now Kemi Badenoch’s turn to attempt the same miracle. The appointment of her Shadow Cabinet is the first insight into how she plans to navigate the challenge.

In a show of magnanimity, she has given leadership rivals Mel Stride and Priti Patel the roles of Shadow Chancellor and Shadow Home Secretary respectively. However, there have been big promotions for Badenoch loyalists, who make up the vast bulk of the more junior Secretary of State positions. Just six backed anyone other than Badenoch, raising concerns that there will be a swell of disaffected Jenrick supporters causing trouble from the backbenches. The absence of both James Cleverly and Tom Tugendhat from the frontbench is another sign that the new Leader of the Opposition may not be in for an easy ride.

During her leadership campaign, Badenoch avoided setting out policy positions, espousing her values and committing to wide ranging and fundamental review of the Conservative’s offering over the next few years. As the party embarks on a period of deep soul searching, there will be an opportunity for businesses to inform their thinking.

Read below for a summary of some of the key positions and players in the new Shadow Cabinet.

Who’s Who – The Highlights

Shadow Chancellor – Mel Stride MP

Dubbed as Minister for Broadcast because of his frequent media round appearances during the election, Stride was Rishi Sunak’s reliable DWP Secretary. Having previously served both as a treasury minister and as Chair of the Treasury Select Committee, Stride will be a knowledgeable challenger to Rachel Reeves. His campaign to be leader was supported by a small core of general older party moderates, who Badenoch will be hoping to keep onside.

Shadow Home Secretary – Chris Philp

Following his stint as Minister of State in the Home Office, Philp has received the largest promotion of the reshuffle. A former Chairman of the Bow Group think tank, he sits on the right of the party. Philp’s tenacious and combative style meant he has often been picked for challenging media rounds, and Badenoch will hope he can be a strong challenger to Labour’s record on law and order, an area that Conservatives typically do well on when in opposition.

Shadow Secretary of State for Business and Trade – Andrew Griffith MP

One of the more experienced appointments, Griffith will play a prominent role in this position. Griffith had been tipped as Shadow Chancellor and was seen to be a dead cert among media circles.

Griffith has a senior business background, rising to become Sky’s chief financial officer, joining the board of directors, and at the time of his appointment was the youngest financial director amongst the FTSE 100.

Shadow Secretary of State for Energy Security and Net Zero and Shadow Minister for Equalities – Claire Coutinho MP

A trusted ally of Badenoch, Coutinho continues to shadow the role she held from August 2023 until the election. With Great British Energy being one of the Government’s most significant projects, Coutinho will be tasked highlighting its shortcomings. A skepticism of net zero has been one of the areas Badenoch has been most vocal on, and it will be Coutinho’s task to shift the Conservatives position towards a greater emphasis on what they would argue is a more practical approach to net zero. Attacks on GBE as an albatross, the winding down of North Sea oil, and difficulties building grid infrastructure will all be features of the coming months.

Shadow Secretary of State for Science, Innovation and Technology: Alan Mak MP

Mak is another who has been rewarded for his initial backing of Badenoch. He has a longstanding interest in science and technology and was the founding Chairman of the All-Party Parliamentary Group (APPG) on the Fourth Industrial Revolution. The Fourth Industrial Revolution (4IR) explores advancements in areas such as artificial intelligence, robotics, the Internet of Things (IoT), biotechnology, and quantum computing. He authored a report exploring how new technology can improve our NHS in 2019.

Shadow Secretary of State for Education – Laura Trott MP

Another early backer of Badenoch, Trott has been widely seen as a rising star. As a party moderate, her early backing of Badenoch was crucial to the campaign’s success, enabling Badenoch to win over the left wing of the party. Trott first came into politics as a Special Advisor during the Cameron era, earning an MBE for her success in the role. The impact of the NICs tax changes on nursery fees and increase in university fees means Trott has been given plenty of ammunition for the coming months.

Get in touch with Mark Burr, head of our Public Affairs team if you have any questions or comments, at m.burr@hawthornadvisors.com

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In a new Trump administration, will momentum or uncertainty reign?

With the election of Donald Trump to a second term as President, all eyes turn to what’s next in the U.S. and global economy.

For businesses and executives, there are clear signs of potential positive momentum, tinged with questions for the longer run, especially for multinational and non-U.S. based companies.

A momentum moment

For the U.S. economy, Trump’s reelection moment may catalyze a period of momentum that propels markets higher.  That potential for momentum was reflected in initial investor sentiment, with the S&P 500 pushing upward approximately 2% in the opening moments of trading the morning after the election.

If the Federal Reserve continues its push to lower interest rates, and businesses seize on the likelihood of reduced regulation, lower taxes, and the removal of election season uncertainty, then we may see a wave of corporate investment, hiring and consumer confidence that will buoy profits, share prices and valuations.

On the regulatory front, it seems clear that appointees like Lina Khan at the Federal Trade Commission will be replaced by smaller government, anti-regulation nominees.  In the financial sector, bank M&A has been slowed by prolonged regulatory reviews of pending deals, which will undoubtedly be reversed in a second Trump Administration.  And, the Justice Department’s increasingly active pursuit of antitrust cases should abate. 

This will likely mean an uptick in transaction activity across sectors, but particularly in tech and financial services.  Such an uptick in corporate deal activity can create a flywheel economic effect that is beneficial to investors, though the effect on employment must be monitored carefully.

What of tariffs and trade?

For non-U.S. companies, and those that trade across borders, the picture is more uncertain.

The first Trump Administration was marked with significant, and sometimes surprising, trade disputes, often with traditional economic and geopolitical allies.  There was a fight with Canada over lumber, tariffs on French wine, and a burgeoning trade war with China that continued into the Biden Administration. 

Over the course of the 2024 campaign, Trump ramped up his rhetoric on tariffs, proposing 60% duties on goods from China, a 20% tax on goods imported from any other country, and punitive tariffs on companies like John Deere that move manufacturing out of the United States. 

While Conservative economic orthodoxy would oppose such moves, Trump will have the opportunity to pressure his party to support him on trade, especially with a Republican Senate, and a seemingly likely Republican House of Representatives.  Global corporates will need to watch closely – and engage heavily – to shape the potential compromises in this area, as the few remaining moderate Republicans may be open to pushing for toned down versions of Trump’s proposals.

If Trump is successful on tariffs, it could blunt economic momentum, despite the overall eased regulatory approach he’s likely to take.

Broader uncertainty

The animating feature of the first Trump Administration for businesses and executives was uncertainty.  With a President prone to governing by Tweet, corporates had to watch minute-by-minute lest their firms or industries come under rhetorical or policy pressure unexpectedly.

Much has been made of Trump’s campaign trail focus on retribution – both on policy matters, as with tariffs, and politically.

While some might take comfort in Trump’s election night statement about his intention to “heal our country,” it behooves corporate leaders to watch carefully for signals about how a second Trump Administration might affect their companies and sectors in unanticipated ways.  Monitoring and contingency planning should start immediately.

If you’d like to speak to Hawthorn about our offering in the U.S., please email Andrew Wilson at a.wilson@hawthornadvisors.com

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Taxes, Duties and Investment: The Much Anticipated Labour Budget

This afternoon Chancellor Rachel Reeves delivered the first Labour budget for 14 years. The top line is that spending on public services will increase by £55 billion and capital investment by £23 billion, paid for in the most part by the largest increases in taxes for a generation.

Reeves’ speech was littered with references to difficult choices and the tough road ahead, echoing the last Budget delivered by a Labour chancellor in March 2010. In that Budget, Alistair Darling was battling to stabilise the UK economy following the 2008 crash. Darling didn’t have the luxury of being able to blame the previous Chancellor, who was of course sat next to him. Reeves took full advantage of being able to blame her predecessors, but being the new kid on the block comes with other burdens, chiefly the burden of expectation.

Labour ran on a promise to change politics and improve public services, and to govern as pro-business and pro-worker. Balancing these expectations will be key to this government’s success and chances of victory at the next election. Budgets always unravel in the days and weeks following, and with so many changes there will be plenty to keep hacks occupied.

Key takeaways

  1. Working people have been defined: payslip workers

It may not be ready for the Oxford English Dictionary, but we can be clear after today who Labour’s ‘working people’ are. Reeves’ pledge not to increase the Income Tax, National Insurance or VAT paid by workers has been honoured, and possibly the only rabbit in today’s budget was that Labour will unfreeze tax thresholds beyond 2028, meaning an end to fiscal drag. Extending the freeze on fuel duty and cutting tax on pints are two other decisions that have been made with this group of lower and middle earners in mind.

  1. A budget for the NHS

The NHS consistently polls as the number one public concern. So perhaps unsurprisingly almost half of the additional public spending announced today is for the NHS, and it receives 68 mentions in the Budget document. The vast majority of funding for day-to-day spending is to help meet the pledge to cut waiting times – a key metric that the government will be judged on by the public. Not insignificant is a real terms increase for local governments to deliver essential services – with increasing numbers of councils on the brink of bankruptcy, Reeves will be hoping this can ease the burden.

  1. The City has lobbied effectively, with more battles to come

There will be relief in the City that the increases to Capital Gains Tax are not as high as expected, and that there is only a 4% increase to carried interest, symbolising a big win for City lobbyists. The war isn’t over though, with another battle on the horizon hidden away on Page 49 of the budget document:  “From April 2026, carried interest will be taxed fully within the Income Tax framework, with bespoke rules to reflect its unique characteristics”. What these ‘bespoke rules’ look like will be subject to intense lobbying between now and the next Autumn budget.

  1. Growth still the big test

Everyone expects a Labour government to invest in public services. The big test for this government is to generate growth and, on that measure, the jury is still out. The government seems at risk of missing its target to be the fastest growing economy in the G7 by 2029, with the OBR now predicting the average growth will slow from 2026. Labour will be hoping its infrastructure investment, modern industrial strategy and National Wealth Fund will generate major investments, but without more concrete proposals it seems unlikely that this pre-election pledge will be met.

Announcements by sector

Business and industry

  • An increase in employers NI by 1.2% to 15% from April 2025, and lowering the threshold that firms start paying NI on workers earning from £9,100 to £5,000.
  • Increasing the employment allowance from £5,000 to £10,500.
  • From 2026-27 permanently lower tax rates will be introduced for retail, hospitality & leisure (RHL) properties. Plus, for 2025-26, 250,000 RHL properties will receive 40% relief on their bills, up to a cash cap of £110,000 per business.
  • A Corporate Tax Roadmap will be published which confirms the cap of corporation tax at 25% and maintaining full expensing.
  • The Small Business Tax multiplier will be frozen next year.
  • Cutting draft duty by 1.7%
  • Increase the soft drinks industry levy to account for inflation and increasing the duty in line with CPI.
  • Maintaining asset disposal relief at £1 million, and will remain at 10% this year and rising to £14% next year and 18% from 2026/27.
  • Introducing a single adult wage rate phased in over time by initially raising the national minimum wage for 18–24-year-olds by 16.3%.
  • Increase the national living wage by 6.7% to £12.21 an hour.
  • VAT, income tax and NI will not increase for working people.
  • Will capitalise the National Wealth Fund to invest in “industries of the future”.
  • Confirmed multi-year funding commitments for high growth potential sectors including £1 billion for aerospace sector to fund R&D, £2 billion for the automotive sector and up to £520 million for life sciences innovative fund.

Financial services

  • The fiscal rules will be reformed to use a public sector net liability debt (PSNL) measure, deducting financial state assets from public sector debt.
  • Like the fiscal stability rule, PSNL will be required to be falling over a three-year horizon.
  • Adopting PSNL will increase the Exchequer’s fiscal headroom to £15.7 billion by 2027/28.

Energy and environment   

  • £3.9 billion in 2025/26 for Carbon Capture, Usage and Storage Track 1 projects to decarbonise industry and contracts with 11 green hydrogen producers
  • £3.4 billion over three years for the Warm Homes Plan
  • Increase in the Energy Profits Levy to 38%
  • £25 million to the Welsh Government for the maintenance of coal tips

Tech and digital  

  • Government investment in R&D will be protected, with more than £20 billion of funding.
  • The Innovation Accelerator Programme in Glasgow, Manchester, and the West Midlands will be extended.
  • With over £500 million for next year, Tech Secretary Peter Kyle will continue to drive progress in improving reliable, fast broadband and mobile coverage across the country, including in rural areas.

Defence

  • Total increase to the Ministry of Defence budget of 2.9 billion next year to ensure the UK exceeds its NATO commitments.
  • Guaranteed military support to Ukraine of £3 billion a year for “as long as it takes”.

Transport  

  • Freezing of fuel duty and maintaining of the 5p cut
  • Increase to Air Passenger Duty, especially for private jets.
  • £3 bus fare cap and £650 million for local transport.
  • Delivery of HS2 from Birmingham to Euston.
  • £500 million for road maintenance and potholes.

Health and social care   

  • Pledged up to £520 million for a new Life Sciences Innovative Manufacturing Fund.
  • Protect investment in R&D with more than £20 billion worth of funding, including £6.1 billion to protect core research funding for areas like engineering, biotechnology and medical science.
  • £22.6 billion increase in the day-to-day health budget, and a £3.1 billion increase in the capital budget, over this year and next year.
  • Committed £1 billion of health capital investment to address the backlog of NHS repairs and upgrades.
  • Committed a further £1.5 billion for new beds in hospitals, new capacity for over a million additional diagnostic tests and new surgical hubs and diagnostic centres.
  • Renew the tobacco duty escalator for the remained of this Parliament at RPI plus 2%, increase duty by a further 10% on hand-rolling tobacco this year, and introduce a flat rate duty on all vaping liquid from October 2026 alongside an additional one-off increase in tobacco duty.
  • Delivery of a real terms funding increase for local governments next year, including £1.3 billion in additional funding to deliver essential services with at least £600 million in grants funding for social care

Education   

  • From 1 Jan 2025, VAT will apply to all education, training and boarding services provided by private schools.
  • Tripling in investment for school breakfast clubs.
  • Increase the core schools budget by £2.3 billion next year to hire more teachers.
  • An additional £300 million of funding for further education.
  • £1 billion for SEND education, which represents a 6% uplift in real terms compared with this SEND funding for this year.
  • £6.7 billion in capital investment for the Department for Education – a 19% real terms increase.
  • This includes £1.4 billion to rebuild 500 school in the greatest need of rebuilding.
  • £2.1 billion to improve school maintenance, £300 million more than this year.

Employment and welfare   

  • Accept the Low Pay Commission recommendations to increase the National Living Wage by 6.7% to £12.21.
  • Increase the Carer’s Allowance weekly earnings limit to 16 hours at the National Living Wage, hence carers can earn over £10,000 per year.
  • Deliver £1 billion to extend the Household Support Fund.
  • Reduce the debt repayments that can be taken from Universal Credit each month from 25% to 15% of the standard allowance. 1.2 million of poorest households will keep more of their award each month, with those who benefit gaining an average of £420 per year.
  • Raise the state pension by up to £470 in line with the Triple Lock.

Housing   

  • Residential capital gains tax will be unchanged.
  • Increasing the rate of Stamp Duty Land Tax for second homes by 2% to 5%.
  • £5 billion for housing investment, including £3.4 billion for the AHP next year
  • Reduced right to buy discounts and 100% retention of right to buy receipts for local authorities.
  • A social housing rent settlement of CPI + 1% for the next five years.
  • The hiring of “hundreds” of new planning officers
  • £1 billion of investment to remove dangerous cladding next year.
  • Deliver £230 million to tackle homelessness and rough sleeping.

Local government   

  • A real-term funding increase for local government, including a £1.3 billion increase in grant funding.
  • Greater Manchester and the West Midlands would receive integrated settlements from next year.
  • The largest real-terms funding settlements for the devolved Administrations since devolution and city and growth deals in Northern Ireland.

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Five things you need to know about Labour’s NPF document

Conference season is almost upon us and there is huge anticipation this year as these are likely to be the final annual conferences before the next general election.

For Labour, that means it is the last formal opportunity for party members to contribute to the manifesto, which is why there is some excitement about the publication of the National Policy Forum (NPF) final documents. 

Here are the five things you need to know.

1. The NPF is elected to shape Labour policy

For those of you who aren’t Labour nerds, you might be wondering what this is and why it matters. Briefly, the NPF is an elected group of Labour members, trade union members and the Shadow Cabinet who debate and shape policy submissions. They last met for a long weekend in July and agreed a wide-ranging policy programme which is being circulated today. It matters because, as a democratic socialist party, Labour members expect to be able to shape policy.

2. Don’t believe the hype – this is not the manifesto

Despite all the noise, we are a long way from the Labour manifesto. First, this document needs to be endorsed by delegates at Labour party conference in October – where it can still be amended. Then Starmer and his team will spend the next year listening to businesses, unions, trade bodies, and of course the public, before the manifesto is finalised at the Clause V meeting just before the General Election.

3. It’s the economy, stupid

This may not be the manifesto, but it’s still important. And the 50 most important words in this document are found on Page 7 and are worth repeating:

Labour’s fiscal rules, as set out by Shadow Chancellor Rachel Reeves, are non-negotiable. They will apply to every decision taken by a Labour government, with no exceptions. That means that Labour will not borrow to fund day-to-day spending, and we will reduce national debt as a share of the economy.”

Confirmation, if it were needed, that Labour believes the path to No.10 lies in demonstrating that it is they, not the Conservatives, who can be trusted with the economy. This will mean battles with their own supporters about how much change Labour can promise, but Starmer and Reeves have made the calculation that it is the public who determine election results, not Labour members.  

4. Labour is walking a tightrope with the Unions

Thirteen years of Conservative government have left most Unions focused on getting Labour over the line at the next election. But relations could be seriously tested if Labour wins. The NPF document contains many policies that Unions will like in the ‘A New Deal for Working People’ section (page 35), such as commitments to repeal anti-union legislation. Unions will expect action on those in the first 100 days of a Labour government – and Starmer will be criticised, as Blair was, if he doesn’t repeal Conservative Trade Union legislation. Greater pressure still may come from elsewhere – re-read the Reeves 50 words on the economy, then consider that some public sector unions have been asking for 18% pay rises. Tough negotiations lie ahead for Labour and the Unions.

5. Labour still has plenty of decisions to make

The NPF document and the Five Missions tell us Labour’s priorities, the direction they want to take the country in, and some of the policies they want to enact in government. But they can’t do much of it without the private sector. Starmer has been in listening mode with businesses since day one of becoming leader. He wants to present Labour as the party of business at the next election so that voters will believe his targets on growth and the economy. If you have something to contribute to that conversation, Labour will want to hear from you.

If there was ever a time to engage with the Labour Party, the time is now.

By Grace Skelton, Associate Director

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