For a second year running, corporate Britain descended on Liverpool for Labour’s annual conference, in an event so packed with executives that some insiders joke the socialist gathering has developed into a full-blown “Davos on the Mersey”. Like last year, the exhibition and conference fringe had sponsored events, lounge areas and advertising from exhibitors including Gatwick, National Grid, Ikea and Specsavers. This year, however, business leaders were looking for clues about how Labour will govern after July’s election landslide. After less than 100 days in power, and a month before the first Labour budget in almost two decades, many still await clarity on a range of policy priorities. But there were some hints of what the government is planning. Investment and fiscal rules Rachel Reeves, the chancellor, dropped the broadest possible hint in her conference speech that the budget, on 30 October, would include a relaxation of the government’s self-imposed fiscal rules to prioritise investment in the UK economy. Reeves told delegates on Monday: “It is time the Treasury moved on from just counting the costs of investment in our economy to recognising the benefits, too.” Sources confirmed she could change the way the government’s five-year debt rule is assessed to allow more spending on housing, roads and hospitals.
This could involve excluding losses for the Treasury on the Bank of England winding down its crisis-era quantitative easing bond-buying programme, which experts say could open up headroom in the public finances worth up to £15bn. It could also include moving Labour’s new investment institutions, the National Wealth Fund and GB Energy, off the government’s books. Business can shape government policy At Labour’s “business day”, taking place alongside the main party conference, Keir Starmer told executives they should come directly to No 10 if they had any problems with government policy. At a £3,000-a-ticket event where he was introduced by the chief executive of HSBC UK, and interviewed by the UK chief of Google, Starmer said he wanted to “reinforce our invitation to partner with us. “Tell us how you think it will work. And tell us what you think the inhibitors are,” he said, continuing a theme from Labour’s time in opposition when the party worked to rebuild connections with industry after more than a decade in the political wilderness. “Yes, government can set the mission on economic growth, but we can’t achieve that on our own – therefore we need to partner,” Starmer said. Industrial strategy In her conference speech, Reeves said the government would announce the details of its industrial strategy next month. Launching the policy – which is designed to outline priority areas for economic growth and guide business investment – was among key manifesto promises made by Labour. It is understood ministers will publish a green paper alongside the budget and consult on its proposals this autumn, before a full launch of the policy next year. However, business leaders have expressed frustration that the budget and the industrial strategy won’t come before a major global investment summit planned for 14 October, amid frustrations over its timing. Workers’ rights At the heart of Labour’s plans for the economy are the biggest shake-up of employment rights in a generation, under the banner of the “new deal for working people”.
The party had promised in the general election campaign to announce its legislative plans within the first 100 days of power. Sources said this was likely to mean a date of 10 October for the announcement. The proposals – including banning exploitative zero-hours contracts and introducing “day-one” employment protections – have, though, raised some concerns among industry leaders over the potential impact on their businesses. Union leaders, too, are worried Labour could water down the plans to appease bosses. In an interview with the Guardian, the business secretary, Jonathan Reynolds, said Labour would legislate next month, and confirmed that the legislation would mean a maximum probation period of about six months at the vast majority of businesses, with workers given protection from unfair dismissal and rights to maternity and sick pay. While saying most company leaders were comfortable with the plans, he argued there had “absolutely” been scaremongering over the plans, suggesting that issues with the policy were overblown. Speaking at a conference fringe event on Tuesday, Reynolds suggested that the proposals would be consulted on, and that changes would not be gradually implemented over time. “We say we’re committed to consultation; that’s very important,” he said.