Chris Fletcher, Policy Director at Greater Manchester Chamber of Commerce, looks at the new government's first week in power.
With the headlines fading following last week’s momentous victory for Labour in the General Election, the focus is now very much on whether the government can get to grips with delivering on its 5 ‘missions’ for the UK. We’ve already heard from several ministers on how this will be achieved, from housing on Monday to the role of Elected mayors on Tuesday the pace and indeed style of announcements is impressive.
Here in Greater Manchester out of our 27 MPs (all Labour with the exception of Tom Morrison in Cheadle and Lisa Smart in Hazel Grove – both part of the impressive 72 seat result for the Lib Dems) we have 4 who sit at Cabinet and a host of others who have ministerial positions in various departments. Very useful for future developments.
It is however how Labour perform that will be the key element and how they will be judged. Less than a week in, there are already some key aspirations in place and a very different feel to things.
Top of the list of Labour’s missions is to ‘Kickstart Economic Growth’ which covers a multitude of issues and on which we’ve already heard some plans from new Chancellor Rachel Reeves. Her speech on Monday this week led on the promise to build 1.5 million homes over the next 5 years. To do this she announced a huge shake up in planning and other reforms especially around schemes that are currently ‘jamming’ the system up. This all sounds great and the manner in which these announcements are made is business -like and definitely sets the right tone.
On Tuesday the 11 Elected Mayors in England met the PM and Deputy PM who reaffirmed the drive for further devolution not just with those already in post but for other areas too. Having a supportive wave of key elected mayors (including Conservative Ben Houchen in the North East) puts the PM at a strong advantage and one that he will take advantage of unlike the previous administration who, at best, tolerated the mayors.
No doubt there will be more announcements over the coming days especially around transport, education and we await much needed movement on the current state of international trade, especially with the EU.
So, how realistic are these ambitions set against the same economic conditions and challenges that faced the Sunak administration?
Obviously the lack of money for public spending is a major issue especially if the government is not to immediately renege on its promise not to raise taxes. Cost savings can only go so far so expect the announcement around VAT on private schools to come out sometime soon. Savings on the public purse may also come into play especially in devolved areas where local delivery could save the central exchequer some of the money needed for other projects.
The other option, and this is bold to say the least, is to pin everything on growth and the corresponding increase in tax take. This does seem to be the intention at present notwithstanding the time this will take and a series of ‘baked-in’ issues that will need resolving.
Take the ambition to build 1.5m new homes as an example. This is a surefire way to get the construction sector fired up. However where does the required extra trained and skilled workforce come from? Recruiting the extra staff and trainers required isn’t easy and is a significant challenge now – our work on the LSIP has shown this. And whilst the education system is undergoing significant but necessary changes, this could also act as a brake, in the early stages, on delivering government’s ambition.
That is just one example of the inbuilt challenges to be faced. If government can overcome these inherited problems then it does seem that the stage will be set to deliver on their manifesto.
The timescale for this is already out there and in front of your eyes. Rachel Reeves described this period as a ‘decade of national renewal’ and there is the promise of a 10 year infrastructure plan. So, not short term and anyone expecting a quick win may feel let down but at least it’s realistic which makes a refreshing change.
Here at the Chamber we set out, before the election, the asks from business of the new government. Our Campaign for Business 2024 lays out national level asks of the government and local actions that fall within the scope of the Mayor’s powers. We will keep a watch on how both perform in delivering these, we will keep you informed and make sure that GM’s businesses can play their part in kickstarting growth and make the most of the opportunities from this.