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24 October 2017

196: What would a Labour government mean for public affairs?

Whilst the possibilities and timing of a potential Labour government remain uncertain, attendance at their party conference shows that the chances are being taken seriously. But what would it really mean for public affairs?

It was not too long ago that no-one was really taking the chance of a Labour government, especially one led by Jeremy Corbyn, seriously. But the General Election result, the popularity of the Labour manifesto and Corbyn’s own improved performance have all shifted the dial. Add to that the confusion of Brexit and the constant Cabinet in-fighting then you have a recipe for a potential Labour government.

Labour too is planning. Some may have scoffed at McDonnell’s talk of ‘war-gaming’ but it is difficult to say that they are not right to plan for what could happen. The role of Sir Bob Kerslake, the former head of the civil service, could also be critical. He has already undertaken a review of the Treasury for the party and is now, along with other ex-officials, helping prepare the potential government for entering office. This is the sort of attention to detail that makes Labour look serious and may offer some reassurance to business and the markets.

So what would a Labour government mean for public affairs?

  • A different way of doing government? It is unclear how a more ‘bottom-up’ approach to policy making in the party will apply in government when there isn’t always the time to consult and engage at length. This sort of detail will emerge over time but what we do know is that the role of the Treasury could change. If the Kerslake Review of the Treasury is implemented then it could have less role in domestic policy-making and there will be more devolution away from Whitehall.
  • Work in progress – Before getting into government Labour will, they believe, have put much of the detail into their proposed programme. They are using time now to work in more detail on the policies contained in the election manifesto. So everyone can have a clear idea of what a Corbyn-led government would seek to do. The extra work taking place across the policy space ranges from the industrial strategy through to the idea of a financial transactions tax. What has been talked about a number of times (not least at conference) is preparing is a series of draft legislation that could immediately be introduced into Parliament if Labour enters government.
  • More intervention 1, regulation – there is little doubt that regulators will be asked to do more by a Labour government, across a range of sectors. Labour will seek to use the tools at their disposal to exert greater government control over behaviours and outcomes. Financial services will be an early target.
  • More intervention 2, state ownership – what form ownership may take is still the subject of some internal debate within the Labour movement but whatever the outcome of these discussions we can already see that utilities, rail and the Royal Mail will be early targets. Scenarios should be planned for and pre-emptive steps taken where possible. Anyone outside of these immediate targets groups should not rest easy. Frankly anyone involved in an issue considered ‘controversial’ should stand on notice of government intervention.
  • Education, education, education – the party leadership knows that trust is at a premium, especially amongst business audiences. There were notable silences as some points in speeches at business events at conference. Penalising business but instead they intend to penalise certain business behaviours. But they are being helped in this by the Conservatives’ apparent attempts to disconnect themselves from business audiences and interventions in the free market that some on Labour could only dream of whilst bringing some in their own party out in a cold sweat! So for all concerned, a period of engagement with Labour is called for.

Navigating Labour, its structure, policy groups etc is essential. The party’s processes may be revised over the coming months so effort needs to go into following these moves.

Labour will want to move quickly and effect change soon after coming into government. Whilst they will plan for the long-term, they will also appreciate the need to be seen to be different. That is not just part of the appeal but also an appreciation that they may only get one chance to secure real change. Even the great reforming post-war Attlee government only last one term and a little bit, 1945-51! And Corbyn and his allies believe that Blair, amongst the list of faults they would attribute to him, was not radical enough especially immediately after 1997.

So a Labour government will be all about impact and that is what public affairs should prepare for.

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