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The UK government’s plea to regulators to come up with ideas for growth is easily lampooned. It’s not entirely foolish to put regulators on notice that their remits may change — but only as long as you also consult those who know what it’s like to be regulated. Here, as so often with this government, the signals are confusing.
Governing is hard. There is some schadenfreude, among veterans of previous administrations, at Labour’s dawning recognition of this after six months in office. When Sir Keir Starmer railed against what he called the “tepid bath of managed decline”, he was expressing frustration felt by every new prime minister. But in his case, things are made worse by the lack of a clear governing philosophy.
The new administration is full of energised ministers, working hard. But there is little read-across. The cabinet feels more like a group of individuals with wildly divergent views of the world than a team with anything approaching a coherent analysis of what ails Britain, and what to do about it.
Listening to the chancellor of the Duchy of Lancaster vowing to “make the state more like a start up”, the science and technology minister waxing lyrical about artificial intelligence, or the health secretary talking about patient choice, it’s possible to feel optimistic. An entirely different impression is generated by the education secretary, who is seeking to turn the clock back by ripping up two decades of cross-party policy that improved schools. And by the deputy prime minister, whose gargantuan workers’ rights package is further undermining business confidence, even as the Treasury tries to restore it.
All governing parties are a coalition of interests. But the extent of the dissonance in this case makes it hard to be sure where this government will land on any given issue. Which in turn makes it hard to build trust.
The argument for Angela Rayner’s employment rights bill is that the UK’s low productivity is partly explained by insecure work. In that light, some of the measures seem reasonable: abolishing “fire and rehire” practices that impose new terms and conditions on workers, helping the self-employed get paid on time, and softening some aspects of zero-hours contracts. But the bill contains a whole slew of other rules: on rights to sick pay from day one, on parental leave and unfair dismissal, on stronger union powers and others that directly contradict the growth mission that Starmer claims is central.
Insecure work may indeed be bad for productivity. But so is no work at all. The independent Regulatory Policy Committee has slammed the government’s impact assessment of the bill as “not fit for purpose”, and warned that the measures will hurt low-wage workers. Business surveys suggest the bill will accelerate moves to invest in technology not people. The complexity and scale of the new rights mean — of course — that a whole new regulator will be created to oversee them.
Number 10 and the Treasury are scarred by the business reaction to the rise in national insurance, and deeply anxious about recent economic news. You would think they would be radically rowing back on the employment proposals. Instead, a weak compromise of a nine-month probationary period has been offered on the issue of unfair dismissal.
Given the concerns over what the package may to do workers’ prospects, only two groups stand unequivocally to benefit: lawyers and trade unions. Something similar applies to the schools bill from the education department, where secretary of state Bridget Phillipson seems to be freelancing with no link to anything the rest of government is doing.
Phillipson wants to dismantle the reforms that were started by Labour’s Andrew Adonis, who grew up in care, and later turbocharged by the Conservative Michael Gove, the adopted son of a Scottish fish processor. The reforms pushed England’s schools up the international rankings to be some of the best in the world. They were based on the twin principles of creating academy schools with more freedoms, for example to pay good teachers more, and requiring greater accountability through league tables. Academies became the tool for turning round failing schools.
Phillipson wants to sweep much of this away, with no convincing alternative philosophy of how to drive up standards. Her answer to what should be done about schools ranked as “inadequate” seems to be to replace that word with something broader, which won’t give parents the same clarity
None of this makes any sense. There are improvements that could have been made, for example to the scrutiny of multi-academy trusts. But why change a system that has helped large numbers of the poorest children?
When it comes to investment, Labour’s majority has brought some much-needed political stability. But investors also need confidence in the consistent direction of policy. They need an educated and flexible labour market, too. To ignore that seems unwise, to say the least.
Unlike Boris Johnson, Starmer is neither lazy nor chaotic. But like Johnson, he is finding out that ideas, some of them very bad indeed, fill any hint of a vacuum at the centre. In meetings, he is known for asking for solutions, not problems. But in Whitehall, the most intractable questions move upwards through the system until they land on the prime minister’s desk. Without a clearer indication of what he wants, it will be hard to drive the machine.
camilla.cavendish@ft.com
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