Labour Party Conference 2022 what would a Labour government mean for business?

Labour is all too aware that it has not traditionally been considered the party of business. The party was clearly keen to use its conference in Liverpool this year to improve this image and build bridges with industry.

An olive branch to business 

This is a Labour party on a mission to woo UK plc with promises of stability and engagement; judging by the number of businesses in attendance it is a message to which many businesses are receptive.

The party’s new Industrial Strategy makes multiple references to the importance of government-business partnership. The strategy also commits to establishing an Industrial Strategy Committee, whose primary remit will be to assess the effectiveness of the government’s industrial strategy. Alongside replacing Business Rates with a new system of business taxation, the document commits to taking steps to developing the UK economy’s resilience through measures such as a supply chain taskforce.

Green economy front and centre  

‘A fairer, greener future’ was the rallying call of this conference, with Labour promising a zero carbon energy system by 2030, a commitment that is likely to play well with both the public and business. Quite apart from the importance of meeting the UK’s Net Zero by 2050 commitment, any action that will break the UK’s exposure to volatile international energy markets can only be a positive development.

Central to Labour’s plans will be ‘Great British Energy’, a publicly owned energy firm to be set up in the first year of a Labour government.

100% clean energy by 2030 is ambitious and will require an unprecedented rate of change. Labour’s plan is for wind and solar to make up 70% of the electricity mix in 2030, with the rest coming from new nuclear, other renewables, and hydrogen. Nuclear in particular will be essential to providing the UK with clean baseload power, but given that the UK has only recently started seriously investing in new nuclear power stations — and that they typically take 5-10 years to build — it is not yet clear how this will be sufficiently scaled up in time to meet the 2030 target.

A skills revolution 

The UK’s skills needs are rapidly changing and skills policy as yet has not kept pace. Skills shortages consistently rank in the top three factors negatively impacting IoD members’ businesses.

Earlier this year the IoD called on government to establish an independent Shortage Occupations Agency with a statutory remit to systematically advise on current and future skills shortages areas for the UK economy. We were therefore pleased to see Labour’s pledge to set up Skills England to oversee the national effort to meet the UK’s skills needs.

We don’t yet have much detail on the body, but we will be encouraging Labour to use it to effectively target government skills interventions in areas of current and future skills shortages so that our members can recruit the staff they need.

Overall, then, there was a lot at the conference to welcome from a business perspective. However, policymaking is always easier in Opposition; should Labour win the next General Election, their challenge will be to implement these policies in what will likely be a challenging macroeconomic environment.