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Six policy areas in Labour manifesto being scrutinised by business

Jun 14, 2024


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Rachel Reeves told UK business bosses on Friday that Labour’s general election manifesto bears their “fingerprints”, after years spent by the main opposition party’s top team courting executives. 

At a meeting in London, the shadow chancellor said Labour could break down barriers to growth if it won power but that it would be reliant on business to boost the economy. 

“It’s not going to be government that’s going to create the jobs and the prosperity and the investment,” Reeves said. “I hope you will see your fingerprints on that manifesto.”

Labour has pledged greater economic growth by restoring “stability” to government, liberalising the planning system and accelerating the low-carbon transition. Yet some of the business policies set out in the party’s 134-page document have received relatively little attention this week as Labour’s tax and spending plans took centre stage.

Electric cars

Rishi Sunak, Conservative prime minister, last year delayed until 2035 a ban on the sale of new petrol and diesel cars, saying the move brought Britain into line with EU countries.

Labour said in its manifesto that it would restore the original 2030 date to “give certainty to manufacturers” and encourage more electric vehicle production. But it would involve a major shift in car-buying patterns in under six years. 

The policy is part of a package of green energy measures that include a new state-owned energy company Great British Energy, a wealth fund to pay for decarbonisation of heavy industry and an end to new drilling licences in the North Sea. 

One colleague said that although Starmer did not eulogise tackling climate change, it did not mean he was not a “quiet climate radical”.

Industrial action

The manifesto does not mention Labour’s plans to make it easier for unions to go on strike by reversing a swath of Conservative employment legislation passed in recent years. 

The document lists some of the highlights from its New Deal For Working People. These include banning exploitative zero-hours contracts, ending “fire and rehire”, where companies use threats of dismissal to pressure staff into accepting worse terms and conditions, and introducing basic worker rights from day one.

By contrast the manifesto does not refer to the party’s promise — also set out in the New Deal — to reverse Tory laws that have hamstrung unions’ ability to call walkouts. 

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

The party will also introduce a “full right to equal pay” for disabled people and require large employers to report disability and ethnicity pay gaps.

Business rates

Labour has long promised to overhaul the business rates system, which it says hurts high streets by placing bricks-and-mortar businesses at a disadvantage to online retailers. 

The party pledged in its manifesto to replace the current system with one that would “raise the same revenue but in a fairer way”. The change would mean big online companies operating out of warehouses paying more tax, echoing a similar Tory manifesto pledge.

Labour says the shake-up would incentivise investment in high streets, but the party has yet to provide more information. The British Retail Consortium, a trade body, welcomed Labour’s recognition that the current rates system is “broken” but added that the industry “will want to see the details”.

Regulation

Labour has said it will create a Regulatory Innovation Office to speed up approval times for groundbreaking products such as medical devices that it says wait too long to be assessed by understaffed, underpowered watchdogs.

Ed Steele, co-founder of Hoxton Farms, which makes lab-grown fat for use in the food industry, welcomed the plan for stronger co-ordination. He said it could be a “huge enabler” for advanced industries, but warned extra resources would still be required.

Labour has also pledged to create a National Data Library to provide better access to public sector data for researchers, as well as adding data centres to the list of critical national infrastructure in order to help speed up planning approvals.

Research institutions will be guaranteed 10-year budget settlements to help them to make strategic plans.

‘Insourcing’

Reeves has pledged to oversee the “insourcing” of large parts of the public sector currently delivered by private outsourcers. 

The New Deal For Working People says: “Labour will learn the lessons from the collapse of Carillion and bring about the biggest wave of insourcing of public services in a generation.”

Yet although the change is still Labour policy, the word “insourcing” does not appear in the manifesto, which could raise industry hopes of the party reversing course when in power. 

By contrast the manifesto is explicit on its separate, but similar, plan to slash the use of external consultants in Whitehall. The party estimates “halving consultancy spend” would generate £745mn that could go towards prioritising state capabilities instead. 

High Speed Rail 2

Labour has joined business groups in criticising the Tory government’s handling of the flagship high-speed rail link, which Sunak scaled back to a line between London and Birmingham last year. But the party has no plans to restore the axed section of the line to Manchester. 

Last year Starmer promised to “get on with” an east-west line between Liverpool and Leeds called Northern Powerhouse Rail. But this project was not mentioned in the manifesto. 

Instead the policy programme mentions gradual rail nationalisation “without costing taxpayers a penny”. Meanwhile a new authority, Great British Railways, would incorporate Network Rail and gradually take over the running of train services.



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