Piecing together the election

The Rundown

We are excited to confirm that we will be continuing our Rundown series throughout the summer and autumn as we look to key political milestones including the King’s Speech and the Budget.

Piecing together the election

The election produced a landslide victory for Labour. The class of 24’ photo of Labour MPs on Monday helped visualise the latest crop of MPs, marking the biggest shift in Parliament in over a quarter of a century.

The transition itself demonstrates the brutality of the UK political system, with the keys to Number 10 changing hands a matter of hours after the election result - a testament to our smooth functioning democracy which we can never take for granted.

Cautionary steps

Former Prime Minister Sir Tony Blair has already advised the Prime Minister to hold off on making long-term decisions so early on in his premiership. So far, we have seen expected chess moves including the appointment of the Cabinet, except for former shadow ministers Jonathan Ashworth and Thangam Debbonaire who both lost their seats.

The process for appointing more junior members of the Government has been sporadic, with Starmer thinking appointments through in careful detail. He has brought back experienced, steady hands including Rt Hon. Douglas Alexander, Rt Hon. Jacqui Smith and Heidi Alexander. ?

In terms of resources, there will be substantially more SpAds allowed in the Government, with three already in transport and Reeves likely to take five altogether at the Treasury. This partly reflects the fact Labour has been outside the corridors of power for some time, but also the more high-pressure nature of politics today, and the 24-hour new cycle that drives stories in real time which was not a feature of the press during the last Labour Government.

In the spotlight

Rachel Reeves has made the most of the political weather by generating positive headlines and coverage so far. She will be the most dominant voice on domestic politics with major announcements on planning and net zero being Treasury-led, allowing the ministry to almost become a ministry for all domestic policies.

The other key area of note is that devolution and a focus on the nations has been key in Starmer’s first week. From the waving of all British, Welsh and Scottish flags during his speech on the steps of Downing Street, to visiting all four corners of the United Kingdom, and the first meeting in Number 10 with elected mayors. We know there will be a devolution bill in the King’s Speech, which is already largely written, with a budget likely in September.

The aftermath

The mood music from Rachel Reeves is that things are worse than anticipated – preparing the ground for a tough budget in terms of spending decisions, as well as a Comprehensive Spending Review. Whilst there will be no movement on the strict commitments to not raise income tax, national insurance or VAT, there could be the potential for corporation tax and other taxes to increase.

Ultimately, stability will be the key theme as Reeves looks to calm the markets before all else. A Chancellor trusted by the business community is essential, and a steady reduction of national debt will help clear more headroom.

Some new Secretaries of State have a clear idea of what they want to achieve. For example, in Health, Wes Streeting MP has already recruited former New Labour grandee Alan Milburn who will work closely alongside to deliver results.

Working with business

When courting opposition, business will usually give the benefit of doubt to a government in waiting in good faith. However, this works differently in Government. If Starmer and Reeves are serious about their relationship with business, they must find practical ways of involving people in decision making which is not seen by industry as merely a platitude – speaking with businesses and sectors directly.

Key relationships for business to keep focusing on will include the Civil Service, who now have the most important function involved with long-term policy development. From there, having relationships with sponsoring Ministers is important but thinking about advisors that could affect your business is important too.

Equally, engagement with MPs early on could be underpriced. There has been huge turnover, with a lot of impressive candidates that could be Ministers within years with reshuffles bringing in new waves of talent.

To shape tomorrow, businesses need to understand the issues of the Parliamentary Labour Party, and understanding future talent will be key and tying these into Government.

Strength of legislation and the first test

Planning reform will be a key legislative test – being tried by various governments of all stripes for decades. There are so many vested powerful interests, however given they have focused on it in week one they have laid a very clear marker of their intent.