Labour’s U-Turn on labour

Luke Downham, Head of Labour Unit and Adam Newman, Account Manager (Public Affairs, Labour Unit) 

Keir Starmer’s pledge to the Confederation of British Industry (CBI) conference this week that he will wean the UK off its “dependence” on immigration orientated “cheap labour” is a highly significant policy shift, laying down an important plank of Labour’s economic policy, and reflecting an increasingly focused electoral strategy. 

As hoped, political commentary after the speech focused on this “tough” approach, leading to the speech being mockingly praised by Nigel Farage as “repeating the UKIP 2015 manifesto.” For a Labour leader, Starmer’s statement is highly significant. The speech marks a significant shift in rhetoric from the Labour Party with regards to immigration, an issue so often bamboozling and awkward for Labour leaders in recent years. Starmer knows that reforming the labour market is an act of political signalling, in that he has “listened” to swing voters in Brexit-voting seats lost in 2019.   

However, within the speech was a more important theme for business; Labour’s plans for a 21st Century British workforce fit to compete outside the European Union. 

Getting Britain fit for the future 

Labour has always positioned itself as a party for the working people, and Starmer stuck to this theme yesterday. But in recent months, as well as in yesterday’s speech, Starmer has emphasised the need for a transformation in how workers can be upskilled to ensure that businesses can remain competitive, tying in his pledges to be pro-business, to grow the economy, and to bring renewed aspiration to working people. 

Labour has pledged to do this in two key ways. 

Firstly, it has proposed a New Deal for Working People to deliver better pay and more secure jobs, underpinned by high standards. This means ending the mechanisms underpinning insecure work such as zero-hours contracts, and businesses practicing “fire and re-hire.” Meanwhile, pay and conditions will be promoted through statutory interventions, better enforcement, a “race to the top” through an insourcing drive touted by Angela Rayner, and the return of trade unions and collective bargaining. 

Secondly, it has created a Council of Skills Advisers, led by former education secretary Lord Blunkett, which has called for a national skills taskforce to trigger a ‘revolution’ in skills.  

This is complemented by Rayner being put in charge of its approach to the future of work, leading to this agenda being at the top table at Shadow Cabinet meetings, with something of a radical edge. As such, it is likely that the Labour Party will make skills and training a central part of its next manifesto, with the pledge to workers that this will offer them a pathway to a more secure and prosperous future. 

Defining a “role for business” 

With polls suggesting that Labour could win the next General Election, businesses must be focusing on Labour’s strategic approach to the economy, and particularly in developing solutions to Britain’s economic malaise. Businesses should be engaging with Labour as it develops its platform on the future of work, so that the party can best understand where there are skill shortages, develop approaches for securing a sustainable workforce, and to deploy new policies such as reform to the Apprenticeship Levy. 

As both major parties develop their offerings to the British people in the build-up to the next election, now is the time to engage. 

FleishmanHillard UK’s Public Affairs team has set up the Labour Unit to help clients prepare for a potential Labour Government. The Unit provides clients with informed insights into Labour’s policies and processes, tailored to ensuring that businesses are ready for change. Contact Luke Downham.

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