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

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.

2. 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.

3. 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.

4. 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.

This summer, I moved to Yorkshire for five weeks to work on Labour’s general election campaign. There have been hundreds of articles written about how Labour won, but I thought it’s worth sharing a few reflections from my “on the ground” experience.

The consultancy vs doorstep mismatch

While we spend a lot of our time thinking about client policy areas such as AI, energy transition and business taxation, it won’t be a surprise to hear that on the doorsteps of Britain, the conversations are a little different. Cost of living, immigration, crime and the NHS (and potholes of course!) dominated and are the issues that will fill the inboxes of MPs.

That doesn’t mean that we should advise our clients to start advocating in policy spaces that mean little to their business, but it’s useful to think about the many directions MPs are being pulled in on a single day. It’s likely they are already thinking about the next election, so your email needs to persuade an MP to take 5, 30 or 45 minutes away from the issues that their voters care about. Keep it short, focused and relevant. 

Don’t lobby candidates during the short campaign

Campaigns are relentless and even the most seasoned politician will occasionally suffer from ‘candidatitus’ – thinking they’re going to lose because of one bad conversation or becoming utterly convinced that a minor local council issue from eight years ago will lose them 3,000 votes.  

Within that context, I was surprised to see attempts to ask candidates for help during the campaign. I saw one candidate cold approached for views for the intel slide on a pitch deck. It went down really badly, and for the person sending it gave the impression that they haven’t the first clue about politics – not great for a public affairs pro!

Candidates are incredibly busy speaking to voters, making videos, finalising print copy, meeting community stakeholders and everything else in between. There’s only one way to demonstrate your ‘ins’ with a particular party during a short campaign, and that’s by making yourself useful and knocking on some doors.

A smart campaign won it for Labour
Labour was undoubtedly helped by the collapse of the Conservative and SNP vote, the late entry of a Farage-led reform and the Liberal Democrats targeting Conservative seats. But to be the beneficiary of others misfortune, you need to be in a position from which you can capitalise.

Labour’s campaign strategy accounted for other party’s pressure points. The headline policies had been consistent for two years and the message discipline observed almost without fault. They resisted traps laid by others and stuck to the plan. Labour’s well-documented courting of business had served the primary purpose of reassuring voters that Labour could be trusted with the economy – an issue that has lost Labour many elections.

What now?
Campaigning and governing are different skills, and it will be much more difficult for Starmer and his team to retain the kind of discipline that won them the election – though he will certainly try.

Labour is clear on what it wants to achieve in government – it’s all in the manifesto – and has wasted no time in getting started. Our task is to position our clients as critical enablers to achieving these missions and to help facilitate strong, trusted relationships.

Rishi Sunak called the election in the pouring rain and it looks like Keir Starmer will walk up Downing Street in similar sodden conditions later this afternoon. But make no mistake, the political weather has been transformed. 

Labour’s victory is nothing short of staggering, securing a majority of more than 170 while redrawing the political map across the UK. Addressing jubilant supporters this morning, the man who will become Britain’s fourth Prime Minister in two years spoke of “the sunlight of hope… shining once again.” He shall meet the King later today before heading to No 10 from where he will address the nation and, crucially, start putting together his government. 

After 14 years in power, the Conservatives have crumbled to just 119 MPs, suffering around 250 losses including such senior figures as Liz Truss, Grant Shapps and Jacob Rees-Mogg. Rishi Sunak managed to hold his Yorkshire seat, but he says he takes responsibility for his party’s calamitous defeat. He will almost certainly announce his resignation as leader of the Tory party later today, but he may in fact stay in the role for weeks or even months as senior Conservatives plot the process and timings by which they will search for a new leader. They may not have suffered the wipeout some polls predicted (there was talk yesterday of the party falling to fewer than 70 MPs) but it’s not much of a silver lining. The battle for the future of the Conservative party – and of the political right in Britain – is just beginning. 

A dramatic night at the polls also saw a surge in Liberal Democrat MPs, with Sir Ed Davey picking up at least 63 new colleagues. They will become a substantial political presence in Westminster once again, comfortably the third largest party. The SNP has lost nearly 40 MPs and Nigel Farage will take up a seat in Parliament, flanked by three other Reform UK MPs. There will also be a larger than usual number of independent MPs, including Jeremy Corbyn who managed to hold off the Labour tide in Islington North. 

But the story of the night – and the story of the months ahead – is all about Labour. Starmer has taken his party from the depths of defeat in 2019 to the giddy heights of total victory in just five years. It’s true that he benefited hugely from the collapse in support for the Conservatives, and from the fracturing of the Tory vote, but his achievement should be recognised for what it is; a political tsunami. 

Cabinet positions may become clear towards the end of the day while a host of ministerial appointments will take place over the weekend. The new Parliament – full of new faces – will meet for the first time on Tuesday, with the formal State Opening set for July 17, when the new government’s legislative agenda for the year ahead will be outlined. 

The Labour campaign has been criticised by many for being light on detail, but as of today, there’s nowhere to hide. This is now Starmer’s Britain; let’s see what he makes of it.

The intensity of the snap election campaign risked masking the significance of what was about to happen. With the polls close to accurate, the night belonged to Labour. 

The UK has had a Conservative Prime Minister since 2010 and a majority Conservative government since 2015. The Labour Party hasn’t won a general election since 2005, under Tony Blair. In that context, the change that last night’s results could yield are set to be truly seismic. 

It’s now certain that everything will change. The government, Parliament, the House of Lords and our wider constitutional settlement will now change. One way or another, our economy will also change – as will our relationships abroad and the political priorities at home. 

A consequence of Labour’s impressively disciplined campaign was the surprising lack of detail about how they intend to govern and what exactly they intend to do beyond the “first steps” they announced. For businesses of all sizes and across all sectors, there will be an urgent necessity to understand the scale and impact of the change that will result from last night’s results. 

At Hawthorn Advisors, our experts are ready to help you navigate the consequences, risks, and opportunities of this change. 

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What we offer:

UK will have a new Government and a new Parliament, and Hawthorn’s political advisory team is ready to help you engage with this new world:

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Meet the Political Advisory Team

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The Hawthorn Headliner is our fortnightly public affairs bulletin, where our experts bring you insights and analysis on politics and policy.

If you’d like to speak to Hawthorn Advisors about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

With just over a week until the country votes, it’s worth reflecting on what – if anything – we’ve learned from the past few weeks of campaigning. The polls have hardly altered since the Prime Minister called the election, despite confident predictions that they would narrow as the campaign wore on. This forecast, a staple among commentators and not unvoiced even at Hawthorn, was based on the normally safe assumption that the electorate starts to pay attention and the parties run effective, smart campaigns. With regards to the former, it’s now clear the electorate made up its mind long ago and as for the latter, the campaigns have been notable only for the absurdities dogging the Conservatives and the timidity (or rigid discipline) of Labour’s efforts.

Future generations of politicians can look back on this period and conclude that you shouldn’t launch a campaign in the pouring rain; that Prime Ministers shouldn’t skip out early from international commemorations; that candidates shouldn’t bet on elections; that struggling campaigns shouldn’t hold photo calls in front of the Titanic; and that it’s tough to pose as tax-cutters-in-waiting having spent years hiking the levies to record highs. They might also conclude from close observations of the Labour campaign that, while saying as little as possible is a smart way for an opposition to get over the line against an unpopular incumbent, it surely stores up trouble for life in government.

Labour’s central (and winning) argument is that it’s time for change. From what to what? From chaos to… less chaos? To be fair, from Corbyn to not Corbyn is also a large part of Labour’s pitch. Nowhere has this transformation in attitude and approach been more apparent than in Labour’s new relationship with business. The party is now, we’re told, the natural home of wealth creators; the party of business. Shadow Chancellor Rachel Reeves and others have been singing this tune for months, just slightly louder in recent weeks. The business community has largely welcomed the reassurance from a party almost certain to form the next government, but the lack of detail hangs over this courtship.

Addressing business leaders at a Bloomberg event earlier this week, Shadow Business Secretary Jonathan Reynolds opened his pitch to the room by saying “I can think of no reason why the Conservatives deserve another five years in office.” Many in the room would have agreed with the sentiment, but he was remarkably light on detail when it came to questions about how exactly a Labour government would run the economy and manage relationships with employers. The spectre of tax rises does not disappear just because Labour says they have “no plans” to raise them.

His opponent in that debate was Business Secretary Kemi Badenoch, one of several Tory MPs already being talked about as a potential Leader of the Opposition. In last week’s Headliner we looked at what life might be like for the Conservatives post-defeat, and this week we can report that the latest internal Tory party polling shows fewer than 100 of their MPs being returned. While Labour can hit the ground running with their “missions” and “first steps” well trailed, the Conservatives will spend months trying to figure out who they are, who they’re for, who should lead them and, crucially, what should be done about Nigel Farage?

It seems certain that next week’s vote will bring down the curtain on 14 years of Conservative government, but there the certainty ends. What exactly will a Labour government look like? We’re about to find out.

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If you’d like to speak to Hawthorn about our Political Advisory offering please email Mark Burr at m.burr@hawthornadvisors.com.

As Defence Secretary, Grant Shapps could be expected to know a thing or two about military realities. Perhaps this is why he appeared to concede defeat in the General Election, describing a Tory victory as “unlikely.” As rallying cries go, it wasn’t exactly “we shall fight them on the beaches” from General Shapps.

The Conservative campaign is now saying publicly what they’ve long known privately; that Labour is on course to win – and win big. Defeat is one thing, but to have a once mighty army reduced to just a handful of troops while a victorious enemy parades through conquered territory would be the ultimate humiliation. Indeed, the Conservatives may have so few MPs left that His Majesty’s Loyal Opposition might resemble more a scrapy band of resistance fighters.

But who would lead such an outfit? Mr Doom and Gloom himself, Grant Shapps, is apparently positioning himself as an “energetic unifier” but the polls suggest he’ll be a casualty of Labour’s ground war. Robert Jenrick, one of the less subtle MPs on maneuvers, is facing a similar battle in his seat – as is the toast of the Navy’s officer class, Penny Mordaunt. That leaves James Cleverly, Tom Tugendhat, Kemi Badenoch, and Priti Patel free to plan their next moves, relatively safe in the knowledge that their voter base should hold off Labour’s advance. But a huge amount remains uncertain, and unknowable.

Tory MPs jostling for the leadership don’t even know which of their current colleagues will still be standing after July 4th, and the party membership – that body of activists that backed Boris Johnson and Liz Truss – is an unpredictable lot. Will they seek a right-wing figure, someone who could do business with Nigel Farage? Or might they succumb to one of their occasional bursts of pragmatism, as was on display when they picked the fresh-faced ‘change’ candidate of David Cameron? In other words, might we see a hitherto unacknowledged or underappreciated candidate rise from the ashes? And will they lead a band of 150 MPs, or 80?

The nature of the opposition matters, as does its calibre and effectiveness. If Keir Starmer stands up as Prime Minister with a majority north of 200, he will have achieved a kind of parliamentary imperium. Against such odds, the vital work of challenge and scrutiny will be difficult and thankless. At the same time, any new Tory leader will have to start out on a long road to recovery, devoid of hundreds of councilors, wary of Farge, battered by defeat and exhausted after 14 years of government – with the latter years characterised by civil war and strife.

The travails of the Tory party would be merely an entertaining sideshow as far as Labour is concerned. There’s no reason to disbelieve Starmer when he says he wants to change the country, and if the polls are correct, he’ll have not just the mandate but the muscle to do so.

One of the most senior political journalists in the country tells us that “the Tories really are facing an absolute catastrophe,” adding, for good measure “they’re f**ked.” If that turns out to be true, one of the few Conservatives left standing will have to pick up the fallen banners, gather the surviving troops and march them into one of the most frustrating, thankless, and dispiriting voids of British politics: the Opposition trenches.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

The Conservatives have unveiled a “Jeremy Corbyn style” manifesto, according to the Labour leader Sir Keir Starmer.  That’s a sentence that sums up the unusual state of British politics, just three weeks out from polling day.

Starmer didn’t make the comparison as a compliment, despite having campaigned for his predecessor’s agenda just a few short years ago. Instead, he knows all too well that the public considered Corbyn’s pledges unbelievable, in the literal sense, and he’s keen to paint the latest Tory promises with the same brush.

Rishi Sunak maintains that yesterday’s commitments on future tax cuts are fully costed and eminently achievable, but it isn’t just a question of credibility. When a party that’s been in power for 14 years unveils a catalogue of great new ideas, the public is entitled to question why they haven’t done any of them already. Immigration controls? The figures are at a record high. Tax cuts? The burden is at a record high. House building? NHS reform? Higher defence spending? The same natural reaction greets all such pledges; you’ve had your chance.

For the Conservatives, there’s another problem in the mix. The measures contained in the manifesto are individually popular but there’s no evidence of them resuscitating the party’s dire poll rating. Why? Because the party is unpopular, as is its leader. This is where Starmer’s Corbyn comparison makes sense. His predecessor’s policies were popular. Remember the promise of free broadband for everyone? But when taken together and considered alongside the man making the promises and the party poised to deliver them, the voters recoiled.

Manifestos can be funny things. Michael Foot’s 1983 Labour manifesto was dubbed “the longest suicide note in history” – while in 2010 the Conservatives launched “an invitation to join the government of Great Britain” – but the RSVPs were sufficiently lukewarm to result in a hung parliament and a coalition government. Theresa May’s 2017 manifesto for the Conservatives was too clever by half, or too honest, and derailed her campaign once voters got spooked by the reality of her social care plan. As for the Boris Johnson manifesto of 2019, it was blown up by Covid then dumped by his successors in No 10.

So why bother with them at all? Do they change minds? Do parties regret being held to account? Why do they campaign in poetry if they know they’ll have to govern in prose?

The truth is that these set-piece campaign moments do at least allow parties to command attention for a day (one senior Tory campaign source tells us that they need the manifesto to help “move on” from Rishi Sunak’s disastrous D-Day debacle) and we should concede that it’s probably sensible for politicians to set out in detail what they’d do in office.

Labour will reveal their manifesto tomorrow, building on the various “missions” and “steps” they’ve already announced. The document is unlikely to contain many fireworks and will probably be more about offering detail on the pledges they’ve already made. Labour’s approach to the election has been described as a Ming vase strategy; tread carefully, don’t break it. One party insider tells us that “people are taking ‘change’ as the instruction and inspiration” adding that “the ‘don’t knows’ are breaking for Labour.” In this context, they don’t want a manifesto that spooks the very voters they’re trying to lure with promises of competence and stability.

In truth, what’s left out of the Labour manifesto will be just as interesting as what makes it in. There is a growing expectation that a Starmer government would set about raising a variety of taxes – including Capital Gains Tax – once in office, and that isn’t a policy you’d expect to see written down.

It would be too cynical to describe party manifestos as merely decorative, but it would be a stretch to consider them a binding contract.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

The thing to remember about last night’s TV debate is that the two leaders were pitching squarely at an audience who were probably paying attention to the campaign for the first time. That’s their hope, anyway.

Political obsessives (which includes almost all journalists and most people on Twitter) may have followed the twists and turns of every Multilevel Regression and Poststratification opinion poll since the election was called, but most people haven’t. TV debates, still a novelty in this country, represent a fresh chance for the parties to hammer their key messages, deluge social media with clips, make an impression and dominate the headlines and airwaves. So, if it seemed to you as if Starmer and Sunak were robotic in their repetition of simplistic messages (change with Labour or a bold plan with the Conservatives), it’s because they fully intended to. A political slogan isn’t doing its job until the public becomes fed up with hearing it, and the 4.8 million people who watched the debate were probably close to this point by the end of it.

In that context, it’s no surprise we didn’t get a gladiatorial clash of intellects and philosophies. The format didn’t help, either, with ITV’s Julie Etchingham determined to cover as much ground as possible. Thus, mere moments were spent eliciting soundbites on such weighty topics as the future of the economy, global security, climate change, and immigration.

As for the leaders’ performances, there was a marked difference between the two.

Starmer had turned up expecting a rules-based regency duel, only to find Sunak putting on some knuckle dusters. The PM might have delivered his opening statement as if he were reading it off the back of a cereal box, but as soon as the questions started, he showed some fighting spirit. Another way to put it would be “rude and abrasive” – constantly interrupting Starmer and disregarding the agreed rules regarding who speaks when and for how long. The Labour leader routinely muttered “desperate” in the face of Sunak’s barrage of jibes, perhaps forgetting that the Tory leader was indeed in a desperate situation. Polls this week have shown he’s on course to lead his party into oblivion.

Tories needing a boost could cling to the notion that their guy did better than expected. One Tory advisor who watched the debate at party HQ told Hawthorn it was “the best evening of the campaign so far” and said there was plenty of cheering and table banging among staffers. Of course, if the PM couldn’t raise a cheer from his staff, he would be in trouble.

Snap polling of the viewing public by YouGov found that Sunak ‘won’ – by a single percentage point, but as a Labour source told us: “the debate polling has aged better overnight with Starmer leading on substance and all aspects including NHS, economy, immigration, the economy and cost of living as well as overall with a much wider poll.”

As for the different styles the two leaders took, Labour insiders are confident that Starmer’s calmer, more measured tone will ultimately prevail over Sunak’s “what have I got to lose?” aggression.

The Tories can chalk up ‘not crashing and burning’ as a modest victory, but turning their campaign around will take more than that. Indeed, there are signs that the PM’s performance is unravelling. He made much of “Treasury analysis” claiming that Labour’s spending plans will amount to a £2,000 tax bill for every family in the UK, but this morning the Treasury’s top civil servant has said the claims shouldn’t have been used and certainly shouldn’t have been attributed to independent officials.

Labour will be pleased that the debate seems to have allowed Starmer to reassert his more statesman-like qualities, while the Tories have yet to even digest the impact of Nigel Farage’s return to frontline politics, the consequences of which are likely to silence any further cheers from inside Conservative Campaign Headquarters.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

For Labour, this election campaign marks the culmination of a process that’s been underway since Keir Starmer became leader; to reassure the business community by burying his predecessor Jeremy Corbyn’s far-left agenda. Earning the trust of the business community has been a central part of this plan, and it has worked. We can tell it’s worked because nobody laughed when Shadow Chancellor Rachel Reeves declared yesterday that the Labour party “is now the natural party of business” and that she plans to run the “most pro growth, pro business Treasury in the history of our country.”

What does this mean in practice?

According to Reeves, it means going for growth with all the enthusiasm of Liz Truss but without the unfunded market-spooking radicalism. In her speech at Rolls Royce in Derby, Reeves reiterated her pledge to abide by robust fiscal rules as well as her commitment to getting debt falling by the end of the parliament. She also recommitted to a new “Business Tax Roadmap”, first announced at the Labour Business conference in February, to be published within six months of an election win, providing certainty over taxation for the life of the parliament – including a pledge to cap Corporation Tax at its current rate. Labour has also rowed back on some of the more controversial elements of a new “workers’ rights” package, promising that nothing will be imposed without a thorough consultation and input from employers. Labour’s plan to replace the unpopular Apprenticeship Levy with a new approach to skills training will have also caught the attention of bosses.

But woven through these specific pledges runs a more nebulous idea: partnership. Reeves dismissed the “free market dogma of the past” in favour of “a new spirit of partnership” with British business. “Our plans for growth,” she said, “are built on partnership with business.”

The party has made much of its newly minted links with business leaders, not least in financial services and in the formation of an industrial strategy, but one of the most eye-catching expressions of what a partnership could look like comes in the form of Labour’s planned National Wealth Fund.

The policy is being worked on as we speak by The Green Finance Institute and members of this early-stage commission include Legal and General, Aviva, NatWest, USS and other pension funds plus some green campaign groups. The plan is to kickstart the fund with around £7bn of public money before, as Reeves puts it, “crowding in tens of billions from the private sector.” The subsequent investments will be targeted at national infrastructure projects, with an emphasis on the green transition and low carbon energy generation. While we await details of how exactly this will work, it’s worth noting that the terminology is misleading. A “Wealth Fund” puts one in mind of countries like Norway, whose Sovereign Wealth Fund is valued at north of £1 trillion and includes stakes in over 9,000 companies globally. Labour’s plan appears to be more of a Development Fund, financing shared public-private infrastructure schemes.

The legal, regulatory, governance, risk and compliance elements of such a scheme are myriad and complex, and while they don’t amount to a reason not to try it, they should certainly serve to dampen the spirits of anyone who envisages a rapidly established, well capitalised and agile investment vehicle.

The likelihood is that a Fund such as this, however muscular, will not on its own be able to deliver anything like the kind of economic growth on which Starmer and Reeves are so clearly basing their future plans. With further surprise tax rises ruled out and a pledge not to borrow to fund day-to-day expenditure, only rapid and sustained GDP growth will allow Labour to deliver on its ambitions.

And here we come full circle. Back in 2010 a young David Cameron and his then Shadow Chancellor, George Osborne, talked of “sharing the proceeds of growth.” Future reductions in the tax burden and uplifts in public spending would only come, they said, from growing the economy. This is almost word for word Labour’s policy today.

Until the full manifesto is published, the central offering from Starmer and Reeves – to the country as much as to the business community in particular – is that “stability and certainty” will be restored to British policy making. As Reeves said yesterday in one of the less catchy soundbites of the campaign, “stability is change.” It may well be the case that a sense of competence and a less volatile political environment yields an uptick in business sentiment and investor activity, but on its own it’s unlikely to improve the intransigent rates of sluggish GDP growth that have characterised so many developed economies in recent years.

Labour is banking on a stability dividend, and there’s no shortage of businesses or individuals ready to cash one in after years of political and economic shocks, but a large part of Labour’s promised stability actually takes the form of continuity; on spending plans, headline tax rates and fiscal rules. These are political calculations designed in large part to reassure an electorate and head off political attacks, but they leave Labour with a set of policies that risk falling short of their own rhetoric.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

For Labour, this election campaign marks the culmination of a process that’s been underway since Keir Starmer became leader; to reassure the business community by burying his predecessor Jeremy Corbyn’s far-left agenda. Earning the trust of the business community has been a central part of this plan, and it has worked. We can tell it’s worked because nobody laughed when Shadow Chancellor Rachel Reeves declared yesterday that the Labour party “is now the natural party of business” and that she plans to run the “most pro growth, pro business Treasury in the history of our country.”

What does this mean in practice?

According to Reeves, it means going for growth with all the enthusiasm of Liz Truss but without the unfunded market-spooking radicalism. In her speech at Rolls Royce in Derby, Reeves reiterated her pledge to abide by robust fiscal rules as well as her commitment to getting debt falling by the end of the parliament. She also recommitted to a new “Business Tax Roadmap”, first announced at the Labour Business conference in February, to be published within six months of an election win, providing certainty over taxation for the life of the parliament – including a pledge to cap Corporation Tax at its current rate. Labour has also rowed back on some of the more controversial elements of a new “workers’ rights” package, promising that nothing will be imposed without a thorough consultation and input from employers. Labour’s plan to replace the unpopular Apprenticeship Levy with a new approach to skills training will have also caught the attention of bosses.

But woven through these specific pledges runs a more nebulous idea: partnership. Reeves dismissed the “free market dogma of the past” in favour of “a new spirit of partnership” with British business. “Our plans for growth,” she said, “are built on partnership with business.”

The party has made much of its newly minted links with business leaders, not least in financial services and in the formation of an industrial strategy, but one of the most eye-catching expressions of what a partnership could look like comes in the form of Labour’s planned National Wealth Fund.

The policy is being worked on as we speak by The Green Finance Institute and members of this early-stage commission include Legal and General, Aviva, NatWest, USS and other pension funds plus some green campaign groups. The plan is to kickstart the fund with around £7bn of public money before, as Reeves puts it, “crowding in tens of billions from the private sector.” The subsequent investments will be targeted at national infrastructure projects, with an emphasis on the green transition and low carbon energy generation. While we await details of how exactly this will work, it’s worth noting that the terminology is misleading. A “Wealth Fund” puts one in mind of countries like Norway, whose Sovereign Wealth Fund is valued at north of £1 trillion and includes stakes in over 9,000 companies globally. Labour’s plan appears to be more of a Development Fund, financing shared public-private infrastructure schemes.

The legal, regulatory, governance, risk and compliance elements of such a scheme are myriad and complex, and while they don’t amount to a reason not to try it, they should certainly serve to dampen the spirits of anyone who envisages a rapidly established, well capitalised and agile investment vehicle.

The likelihood is that a Fund such as this, however muscular, will not on its own be able to deliver anything like the kind of economic growth on which Starmer and Reeves are so clearly basing their future plans. With further surprise tax rises ruled out and a pledge not to borrow to fund day-to-day expenditure, only rapid and sustained GDP growth will allow Labour to deliver on its ambitions.

And here we come full circle. Back in 2010 a young David Cameron and his then Shadow Chancellor, George Osborne, talked of “sharing the proceeds of growth.” Future reductions in the tax burden and uplifts in public spending would only come, they said, from growing the economy. This is almost word for word Labour’s policy today.

Until the full manifesto is published, the central offering from Starmer and Reeves – to the country as much as to the business community in particular – is that “stability and certainty” will be restored to British policy making. As Reeves said yesterday in one of the less catchy soundbites of the campaign, “stability is change.” It may well be the case that a sense of competence and a less volatile political environment yields an uptick in business sentiment and investor activity, but on its own it’s unlikely to improve the intransigent rates of sluggish GDP growth that have characterised so many developed economies in recent years.

Labour is banking on a stability dividend, and there’s no shortage of businesses or individuals ready to cash one in after years of political and economic shocks, but a large part of Labour’s promised stability actually takes the form of continuity; on spending plans, headline tax rates and fiscal rules. These are political calculations designed in large part to reassure an electorate and head off political attacks, but they leave Labour with a set of policies that risk falling short of their own rhetoric.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

At 5pm on 22nd May 2024, Prime Minister Rishi Sunak announced his intention to call a General Election for 4th July. His decision confounded the expectations of the many pundits and politicians who had predicted an autumn election.

There will be a rush of activity over the coming weeks, with the race starting immediately. Read below for Hawthorn Advisors’ analysis on what to expect and what this means for businesses.

Analysis

In the end, Rishi Sunak took almost everyone by surprise. Just days ago, he laughed when he told the presenters of ITV’s Loose Women that their “summer was safe” – when pushed on a date for the General Election. Looking back on that exchange, he clearly meant “from July 5th onwards…”

The surprise announcement set Westminster abuzz, not least because political journalists live for elections. But what of the reaction elsewhere? Tory MPs, many of whom were banking on an October or November poll, now face the prospect of having their careers and livelihoods cut short by several months, to put it bluntly. The mood among some is said to be mutinous. “This is madness,” says one. Others may be more resigned, while some seem more up for the fight. “Bring it on,” said Rupert Harrison, one of a new breed of Conservative candidates facing an uphill fight in a new parliamentary constituency in Oxfordshire.

As election announcements go, it was inauspicious. Sunak stood at the lectern outside Number 10 and the rain fell. He was almost drowned out by that great New Labour anthem – Things Can Only Get Better, blasted at the gates of Downing Street by one of the resident protestors. And the bible of Conservative politics, The Spectator, had just sent its latest edition to print with a stark leading article concluding: “calling a summer election would be madness for the Tories.” MPs can read it in the coming days as they gear up for the fight of their lives.

As for the speech, Sunak started with what sounded like a long list of excuses, just to remind us: we’ve been through a pandemic, war in Europe, and energy shocks. The subtext was clear—”this mess isn’t my fault.” While his case for the defence was trotted out without any energy or enthusiasm into the microphone: our economy is turning a corner, the world is dangerous, Labour doesn’t have a plan, don’t risk your vote on them.

The Labour leader won’t need to feign his enthusiasm for an election, starting as he is a whopping 20 points ahead in the polls. Those polls may narrow, and the coming six weeks will serve up all the usual daily twists and dramas of election campaigns, but even something in Sunak’s tone of voice – never the most natural – suggested the PM knows the mountain is high and the odds of success are painfully small. It’s a sense you can get in person from cabinet ministers. They will tell you how hard they intend to fight. They are less keen to say that they think they can win. The image of a drenched Prime Minister sloping back into Number 10 may well resonate with voters watching the evening news.

Doubtless, the weather will improve, and doubtless, the long evenings ahead informed the decision to go to the country early, in contrast to the prospects of campaigning for votes in the cold and dark days of Autumn. But the Conservatives will need more than a break in the weather to put a spring in their step. The last time an election was held in July was 1945. The country was emerging from hardship and war, and the country returned a Labour government by a landslide.

What happens now?

There is a 25-day gap between Parliament being dissolved and the date of the election. This is formally the election period, when MPs standing in the election become candidates once again, and government business concludes. For an election to be held on 4th July, Parliament must dissolve on 30 May. For this to happen, the short May recess will be cancelled so that Parliament can wrap up its remaining business.

Before Parliament is dissolved, there will be a legislative ‘wash-up’ period, during which the fate of the remaining Bills that have not yet achieved Royal Assent will be decided. In a departure from the usual process, Bills are expedited through all their remaining stages in a matter of hours. It’s a rare moment when the Opposition has extreme power to agree on what legislation gets nodded through and what gets struck down.

There are 16 Government Bills, 2 Hybrid Bills (a mix of public and private bills), and 10 Commons Private Members’ Bills that have not yet received Royal Assent. The most contentious of which may not be passed, or Labour may negotiate changes to Bills over areas they disagree with. Those with popular crossbench support, such as the Tobacco and Vapes Bill, may yet survive, which Sunak nodded to in his speech.

What can businesses expect?

With just six weeks until polling day, the parties will enter a dash to finalise their manifestos and prepare for the campaign. Regardless of whether a Labour majority is the forgone conclusion that most pollsters predict, Parliament’s makeup will look vastly different in two months’ time. For businesses, now is the time to focus on what a new government of either colour might mean for your industry, and to consider the figures who will be influential in the future of your sector.

We will be posting regular updates during the campaign on policy and politics and how that might affect your business. If you’d like to speak to us about Hawthorn’s Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

Inflation down (3.2 per cent), wage growth up (6 per cent) and economic growth restored (0.6 per cent GDP growth over Q1) – so are champagne corks popping in Downing Street? Put the bubbly back on ice. Firstly, “we’re no longer in recession” isn’t the rallying cry some people think it is, and the rapid pace of wage growth – while undoubtedly good news for workers – is actually ringing alarm bells in some quarters given the impact it might have on inflation and, therefore, interest rates. The UK unemployment rate is also ticking steadily up, with the hundreds of thousands of long-term sick now almost certain to become Labour’s problem. The government’s message is understandable; stick with us, the plan is working, don’t risk it by letting Labour back in. The problem is, this approach is akin to standing in the middle of a biblical flood and telling everyone that you think the sun is beginning to burn through the cloud. They might be pleased to see it, but they have more immediate concerns. 

In 1997 the opinion polls were clear that John Major was facing electoral defeat, with Tony Blair’s New Labour poised for power. The fact that Major could point to an economic rising tide made no difference to his fortunes and he ultimately bequeathed one of the best economic legacies to his successor. The data might have painted a decent picture but the public were in no mood to reward the Tories. They’d been in power for too long, they were riddled with internal divisions, their Prime Minister (despite electoral success in 1992) was gravely weakened, the party’s reputation for economic competence had been undermined by events and the mood of the country had shifted. Is history about to repeat itself? 

It’s even possible that a narrative of economic revival benefits the opposition more than the government, adding to a sense of renewal and a change of direction rather than shoring up the incumbents. But other than some modest GDP growth and a more temperate inflationary environment, what kind of economy would a Labour government inherit?

That the Conservatives have made some economic missteps is not in doubt, but none have been as consequential as the cost of the pandemic. We don’t like to talk about it these days, but the government’s pandemic response came with a price tag approaching £400bn. In 2020/21 the state spent £200bn more than it had budget for. This is to say nothing of the cost to the Treasury from the wider economic collapse, the loss of growth and the deep economic scarring, and it doesn’t take into account the many tens of billions then spent in response to the global energy price shock. This is real money and the consequences of such unprecedented expenditure will be felt for decades, most immediately in the form of higher taxes – regardless of who wins the election. 

So, while the Tories can forget about voters rewarding them for a modest uptick in public finances, so too can Labour dismiss the idea that they’ll be able to turn on the spending taps the moment they take office. After the 2010 general election the outgoing Chief Secretary to the Treasury left a note for his Conservative successor; “sorry there’s no money left.” The current occupant of that office might very well end up reaching for the same sentiment.

Given that Labour has ruled out any hikes to income tax, the smart money says they’ll be looking at raising revenue through relatively less politically sensitive reforms in areas such as wealth, property, inheritance, dividends and capital gains. All governments sneak in stealth taxes. Gordon Brown was famous for it and the current government has allowed fiscal drag to do the heavy lifting. If Labour do target wealth, capital and dividends for tax increases will they do it without fanfare or instead seek to benefit from the political dividing line that such moves would open up? 

As the election approaches the Conservatives will continue to treat the economic recovery like a Ming vase – “don’t let anyone else touch it” – but we also know they’d like to make a big retail offer on tax cuts, whether ahead of the election or as a future aspiration. Chancellor Jeremy Hunt dipped his toe in these waters with hints about a potential abolition of National Insurance at some point in the future, but the idea has allowed Labour to warn about the “black hole” such a move would produce in the public finances. In short, we’re starting to see the coming economic debate take shape, but we should all keep a close eye on the details and take any pre-election promise with a pinch of salt. The parties may feel liberated by the rush of political battle but they will be constrained by economic reality.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

You might not plan on staying up through the small hours of Friday morning to watch the local election results trickle in, but Thursday’s set of polls are nevertheless set to be revealing and consequential. Over a hundred local authorities in England are electing councillors while ten Mayoralties are up for grabs, including in the capital where residents will also be voting for members of the London Assembly.

Once the votes are counted there will be plenty to pore over, right down to individual council wards as party strategists seek to identify their strongholds, their opponents’ weak spots and the gaping holes in their own defences. Taken together, Thursday’s elections will offer a substantial if incomplete glimpse into the state of the nation. While it may feel as if the political narrative is well established (Rishi on the ropes, Starmer on the up) the results of this week’s ballots will refine and sharpen that narrative and may even change it – not least when it comes to the mood within the Tory party.

And while for many people the votes will be about local planning issues and bin collections, the results will also matter for businesses with an eye on the future political and economic direction of the country. So, what should we be looking out for, and what might be we discussing as the dust settles over the weekend?

What would be a good night for Labour?

The first thing to look for will be the size of the anticipated Labour gains. Political parties that are about to move from opposition to government invariably make large council gains in the local elections closest to the general election. This was true in 1979, 1997 and 2010 – three elections that saw a transfer of power at Westminster. If Labour’s share of the vote hits north of 45 per cent, it will point to a sizeable majority at the general election. As for the Tories, they’re already rolling the pitch with talk of “a tough night ahead” but even while they anticipate a drubbing in council elections, they’re holding out for two key mayoral wins; retaining the leadership of the West Midlands and Tees Valley. In the former, Andy Street has become more of a CEO of the West Midlands, while in the Northeast Ben Houchen has become a poster boy for so-called Red Wall conservatism and tangible levelling-up gains. To lose one of them would be unfortunate; to lose both would be careless. One Tory source tells us they’re “hopeful we can hang on to Houchen and Street” – suggesting that good news is likely to be thin on the ground come Friday morning, while a Labour source says both contests are on a knife edge and “MPs and candidates have been mandated to hit the phones and call voters in these areas to press for the win.”

A tale of two cities

The other big vote is of course for the Mayor of London. The polls suggest Sadiq Khan is on course to win a third term, but the Conservative Candidate Susan Hall insists she’s in with a chance, and while the conventional wisdom is that she won’t make it over the line, she does have her supporters. Nevertheless, there are plenty of Conservatives who think their chances would have been increased with a different candidate. One plugged-in former Tory advisor admits there are plenty of people in the party – and in Number Ten – who “can’t quite believe they allowed themselves to end up with Hall as their choice”, confident that Khan could have been defeated by a stronger Conservative candidate, perhaps in the style of Andy Street. That said, Hall is extremely popular among London-based members of the Conservative party and she has a large activist base. She also has a clear message for the large block of outer-London voters when it comes to the Mayor’s controversial ULEZ expansion (she’d reverse it) so don’t be surprised if she puts in a good showing. The change to the voting system (it’s now a clear first-past-the-post system) also gives her a boost.

It’s not just Red vs. Blue

And what of the other parties? If the Liberal Democrats are to take advantage of Conservative woes in the southern heartlands at the general election, then they will need to show progress in Rochford, Eastleigh and outer London boroughs such as Sutton and Merton if they are to convince voters to switch. Tory strategists are likely to be more concerned about bleeding votes to the right, with Reform polling at around 12% and already costing them thousands of votes at recent by-elections – a trend Sunak can’t afford to see repeated at the election. Labour strategists will also be keeping one eye on Bristol City Council, where the Greens are already the largest party (by one) and are hoping to pose a serious challenge in the new Bristol Central seat at the general election.

When the dust settles

In the wake of widespread Tory losses – especially if those losses include their crown jewel mayors in the West Midlands and Tees Valley – then the weekend papers will be even more full than usual of plots and briefings against Rishi Sunak. One Conservative adviser we spoke to concedes that “if it’s really bad on Thursday there will be lots of questions and it’ll be difficult for Number 10,” but adds that “the cabinet is full square behind Rishi and there’s just no appetite for a leadership election.” That final point might not be shared with Tory backbenchers, many of whom face losing their seat in a general election and may feel they have nothing to lose by rolling the dice on a new leader.

While the Tories will doubtless indulge in another round of infighting, however far it gets them, Labour’s messaging over the weekend will almost certainly be based on momentum, breakthroughs, the regaining of trust among voters and their readiness to fight a general election. The contrast with the Tories will be stark, something that won’t be lost on the public. Thursday’s votes constitute the last ‘live’ test of public opinion before the general election. The results and the picture they paint will feed into strategy and messaging for the months ahead, and the national campaign will be underway.

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If you’d like to speak to Hawthorn about our Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.

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