Maitland Political Insight Labour Party Conference 2014 Labour Conference 2014

Maitland Political Insight – Edition IV - Labour Conference - September 2014

Contents

Introduction ……...………………………………………………………………………………. 3

Labour’s plan for the economy…………………………..…………………………………….. 4

Cost of living, employment and pay…………………………………………………………… 5

Energy ……………………..……………………………………………………………………...6

Climate Change …...……………………………………………………………………………..6

Infrastructure…………..……………………………………………………………………….....7

Transport….……………………………………………………………………………………….7

Housing...………………………………………………………………...... 8

Health………………………………………………………………………………………………9

2 Labour Conference 2014

Labour Party Conference 2014

The streets of Manchester were full with delegates for the Labour Party Conference the last few days. The Labour Party used it to set its course for the 2015 election, around a theme of being better together – echoing the successful campaign in Scotland to keep the UK together. We have brought together the main announcements of the last week in this Maitland Political Insight.

The Scottish independence referendum presented challenges, along with the opportunities. The referendum success created excitement that the UK was still unified. However, Labour politicians were dogged with questions over ‘English votes for English Laws’ when discussing new policies announced at the Conference.

Despite the obvious attention on Scotland, there were plenty of major policy announcements. Shadow Cabinet Minister after Shadow Cabinet Minister took to the podium and addressed conference, detailing promises for reform and change that Labour would bring about if they are elected in 2015; ranging from raising the minimum wage to increasing housing.

Ed Miliband, despite professing he’d “deliver the speech differently” if he did it again, gave a solid performance in the Main Hall. Many commentators argued that his speech, and the rhetoric at the Labour Conference in general, was aimed at the “core vote” as part of the party’s election strategy of securing the 35% of the vote necessary to win a majority in the House of Commons. In his speech, Miliband delivered some major policy announcements on the NHS and the Health and Social Care act that got the hall to their feet. These formed part of a six point plan with Labour priorities:

1. Giving all young people a shot in life: Ensure as many school-leavers go on to apprenticeships as go to university 2. Tackling the cost of living crisis: Help working families share fairly in the wealth of our country so, when the economy grows, the wages of everyday working people grow at the same rate. 3. Restoring the dream of home ownership: Meet demand for new homes for the first time in half a century - doubling the number of first-time buyers getting on to the housing ladder a year. 4.Tackling low wages: Halve the number of people on low pay in our country, changing the lives of over two million people. 5. Securing the future: Create one million more high-tech jobs by securing the UK’s position as is a world leader in green industries. 6. Saving our NHS: Build a world-class, 21st century health and care service

Despite this, many commentators have described this year’s conference as ‘a bit flat’. It should be noted, however this criticism was also afforded to the 1996 party conference.

Over the next few weeks, Maitland Political will be present at and providing insight from UKIP; Conservative; and Liberal Democrat’s annual conferences. Please get in touch if you would like more information. Enjoy this insight into the Labour Party Conference.

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Labour’s plan for the economy

On Monday, Shadow Chancellor Ed Balls set out how Labour would manage the public finances. While there were no major announcements, it brought together Labour’s approach in one speech. He also set out the case for EU reform while strongly defending Britain’s membership as “walking away from Europe would be a disaster for British jobs and investment.”

Balls set out that Labour is willing and able to take tough fiscal decisions: “We will legislate for these tough fiscal rules [get the current budget into surplus and the national debt falling] in the first year after the election and they will be independently monitored by the Office for Budget Responsibility”. He added “in our manifesto there will be no proposals for any new spending paid for by additional borrowing.” He illustrated his approach by saying Labour would cap child benefit increases at 1% for the first two years of the next parliament and that ministers would take a symbolic 5% pay cut.

During his speech, he also listed some of the policies that Labour would introduce in Government: • Raising the National Minimum Wage to over £8 by 2020 • Reintroduce the 10p tax rate, by scrapping the Married Couples Allowance • Setting up an independent National Infrastructure Commission to support infrastructure planning • Building at least 200,000 new homes a year by 2020 • Expanding free childcare for working parents to 25 hours a week • Scrapping the winter fuel allowance for the wealthiest pensioners • Scrapping the shares-for-rights scheme • Reversing the abolition of the stamp duty reserve tax for hedge funds (the Schedule 19 tax) • Tackling tax avoidance and close loopholes • Introducing a Mansion Tax on homes worth more than £2m • Reintroducing the 50p tax rate • Supporting immigration reform to ensure “fair movement not free movement”

He also set out how Labour would support an overhaul of vocational education, to improve the UK’s skills base. Labour would work with employers to introduce a gold standard technical qualification and expand apprenticeships. At the same time, a Compulsory Jobs Guarantee, paid for with a bank bonus tax , would help young people and the long-term unemployed get into work.

Balls talked about how Labour would introduce new takeover rules to support long-term investment by business, “not short-term asset-stripping.” A British Investment Bank would be set up to help business get the finance they need and the Green Investment Bank would be given borrowing powers. They would introduce tax breaks for firms that pay the living wage and tackle the exploitation of zero-hours contracts.

Labour would also keep corporation tax rates as they are. Instead of a corporation tax cut, they would use the money to cut business rates for small firms. This would be combined with devolving power and resources to English city and county regions to support local businesses.

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Cost of living, employment and pay

The cost of living is one of the central themes of Labour’s campaign for the next general election and featured heavily in the speeches made by Shadow Work and Pension Secretary Rachel Reeves, Shadow Chancellor Ed Balls and Labour Leader Ed Miliband. The major announcement was a commitment to halve the number of people on low pay and set the Low Pay Commission a target of raising the minimum wage to £8 an hour by the end of the next parliament.

In her speech, Reeves outlined a plan to ensure the welfare system is “fair and affordable” by providing “opportunities for all who can work”, particularly the young. She promised to introduce a Basic Skills Test to tackle skills gaps that “can condemn people to a life on benefits” as well as a Youth Allowance to help young people get the training they need. Building on the theme, Balls highlighted the problem of taxes and prices continuing to outpace wages. He also mentioned the case of a constituent on a zero-hours contract as a further example of the difficulty facing many people. On pay, he said he will work with pay review bodies and employers to do “more for those on lower pay with tougher settlements at the top.”

Apprenticeships • Require every company winning a major government contract offers apprenticeships • Insist that large employers hiring skilled workers from outside the EU offer apprenticeships to young people in the UK • Focusing apprenticeships on new entrants to the labour market and give more control over how training funds are spent

Living standards • Ensuring the self-employed are not locked out of mortgages or pensions • Cutting business rates and giving SMEs access to the finance through a British Investment Bank • Devolving £30 billion of funding and control over business rate revenue to the regions • Introduce an industrial strategy which includes guarantees for science and innovation budgets

Low pay • Raise the national minimum wage to £8 an hour by the end of the next Parliament • Strengthen enforcement of the NMW by increasing the penalty for non-payment to £50,000 • Offer ‘Make Work Pay’ contracts to those accrediting as Living Wage employers, with tax rebates worth up to £1,000 per employee

Miliband reiterated these policies when he addressed conference on Tuesday, positioning Labour as the party that can make the economy work for “every day hard-working people” in contrast to the Coalition’s alleged focus on millionaires and oligarchs.

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Energy

A pledge to freeze energy bills was the headline of last year’s conference. One year on energy still played an important part of the party’s Manchester gathering, albeit with less focus than previously.

Shadow Energy and Climate Change Secretary Caroline Flint took to the stage on Tuesday morning to deliver her speech outlining Labour’s energy plans. She began by reiterating the previous year’s message on the cost of living, that energy bills were too high and hitting people’s pockets. She said “For many today, the radiators are there but they can’t afford to turn them on”.

She continued by echoing previously announced plans to set up a new energy watchdog, saying it will have “a bite as good as its bark”. Energy efficiency formed the next part of her address, referencing lower average household bills in Sweden despite higher energy prices as an example of how insulation can help people keep costs down. This led on to the headline energy announcement of the conference, with Flint promising five million more energy efficient homes over the next ten years, with local authorities and communities in charge of the insulation programme. This move would help save on bills whilst avoiding extra government spending by reallocating funding from other government programs.. She concluded her views on energy by saying “Labour will make saving energy a national infrastructure priority”.

Later on the same day, Labour Leader Ed Miliband spoke of rising energy bills during the cost of living sections of his address. He went on to accuse the Conservatives of intervening to support energy companies, with aim of boosting soaring profits. During the ‘six national goals’ section of his speech he echoed Caroline Flint’s energy efficiency pledge, whilst also committing to take the carbon out of electricity by 2030.

Climate Change

Climate change formed a significant chunk of both Caroline Flint and Ed Miliband’s speeches, in the week where world leaders gathered in New York to discuss climate change action.

Flint opened her speech by calling Nigel Farage and UKIP ‘climate change deniers’, a charge often levelled at the anti-EU party. She outlined her vision of Labour leading Britain into a low carbon, clean energy future emphasising support for green innovations such as renewable energy and Carbon Capture and Storage. She said “climate change is too costly to ignore, Next year, in Paris, a Labour government can lead the campaign for an agreement to protect our planet”.

Miliband expressed his commitment to making Britain ‘truly a world leader’ in green technology by 2025. He went on to accuse the government of allowing the UK to lag behind other developed economies in terms of low carbon, green technology.

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Infrastructure

Shadow Chancellor Ed Balls reiterated in his speech that Labour would create an independent National Infrastructure Commission that will take decision making on major infrastructure projects out of politicians hands. This follows accusations of delay and dithering on major projects, such as a third runway at Heathrow and high-speed rail. The devil will be in the detail as to its effectiveness, depending on who sits on this Commission and what powers it has.

Housing shortages have been a long-term issue for voters and last year Labour ambitiously pledged to build 200,000 houses a year by 2020, a promise they reiterated this week. (see below for further details). They also promised to double the number of first-time buyers getting on to the housing ladder every year; because the ‘dream of home ownership [is] slipping out of reach for millions of young families’.

On Wednesday Labour party members voted to renationalise Britain's train operations and reverse the coalition's decision to sell off a majority stake in Royal Mail. However, senior Labour sources made it clear the party was not in favour of renationalisation, signalling that the leadership was prepared to ignore the motions in its election manifesto.

Transport

Shadow Transport Secretary, Mary Creagh addressed the Conference on Tuesday in which she set out how a Labour Government would approach transport and infrastructure.

Overall, she echoed Ed Balls and highlighted that a Labour government would end the cycle of stop and start on national infrastructure projects, through an independent National Infrastructure Commission. They would “identify the UK's long-term infrastructure needs and hold governments to account.” She also said Labour would support cities that want London-style local transport services, with integrated smart ticketing.

A large proportion of her speech was dedicated to rail. She set out why Labour believes the Government have failed to run rail services satisfactorily. Labour’s solution to bring about better rail services would be to “deliver the biggest reform of the railways since privatisation”:

• Bringing Network Rail and a new passenger rail body together to coordinate track and train operations, and look after passengers • Tackling the monopoly market for rail rolling stock • Capping fares • Legislating to allow a public sector operator to be able to take on lines • Devolving decisions on rail services much closer to communities. • Labour supports HS2 but costs would have to be kept under control: “there is no blank cheque for this or any other infrastructure project.”

7 Labour Conference 2014

Creagh then went on to criticise the Government’s record on roads and said that Labour wants more cycling commuting and every child to have the chance to learn to cycle. To help achieve this, Labour will ensure that HGVs are fitted with safety devices. At a fringe event on Monday, she had said she wanted cycling to be designed into road projects as too often it was “seen as an afterthought.” On airport capacity, she said that in contrast to Cameron, “who kicked it in the long grass,” Labour would make a swift decision on airport expansion.

Housing

Both Ed Balls and Shadow Communities Secretary Hilary Benn spoke of the need to develop “the homes Britain needs for the future”. Linking welfare expenditure to a lack of housing provision, Balls said that Labour would “build more homes to get the Housing Benefit bill down.” He noted that with demand outstripping supply there was a risk of a premature rise in interest rates. Benn said that in anticipation of Sir Michael Lyon’s report on housing, due later this year, Labour would build “at least 200,000 new homes a year by 2020.”

Labour will look to kick-start house building and widening access by:

• Capping rent increases and introduce three year tenancies • Increasing the number of new homes being built to at least 200,000 homes a year by 2015 • Making building new homes, including in the public sector, a top priority in the capital investment programme • Giving ‘use it or lose it’ powers for local communities to tackle developers who hoard land unnecessarily • Delivering a new generation of Garden Cities and give landlocked councils a right to grow

This follows comments at the weekend by Labour Leader Ed Miliband on the problems facing Britain’s housing market. He identified three key areas to resolve: certainty that land will be developed; better strategic planning and infrastructure delivery; and more competition in house building.

To tackle these problems, Miliband proposed the creation of New Homes Corporations. NHCs, established by local councils and devolved bodies, would work with the private sector and housing associations to build on sites at pace. They would set the timetable for construction, take a joined- up approach by bringing sites together across local authority boundaries and drive competition by seeking out a wider-range of developers

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Health

Health dominated the Labour conference and it is clear the party will make it a key campaigning issue ahead of May 2015. A significant section of Labour Leader Ed Miliband’s speech was dedicated to the NHS with the sixth of his six point plan for the next ten years being ‘to build a world class 21st century health and care service’. He also unveiled a new NHS slogan ‘Time to Care’ and committed to a number of increases in frontline NHS staff.

The real dynamism on health however was in Shadow Health Secretary Andy Burnham’s speech on Wednesday, which was by far the best received speech by a Shadow Minister of the entire conference. It is clear Burnham remains the most popular frontbencher amongst Labour party members. He outlined his vision to unite health and social care saying ‘the time has come for this party to complete Nye Bevan’s vision and bring social care in to the NHS’. As the right-leaning Spectator said ‘it was the best speech at Labour conference and the only one that should worry the Tories’.

Together, Miliband and Burnham made a number of commitments that a Labour Government would implement after May 2015:

• 3,000 more midwives • 5,000 more care workers • 8,000 more GPs & doctors • 20,000 more nurses. • Repealing the Health & Social Care Act (likely in the first session of Parliament after May 2015) • Integrating health and care services, ensuring joined-up, preventative care to help keep people healthy and out of hospital • Private health providers to contribute ‘their fair share’ towards the cost of training

These proposals will funded by a mansion tax (a percentage tax on the value of houses worth more than £2m), which is expected to raise £1.2bn; a crackdown on tax loopholes used by hedge funds and other City firms, expected to raise £1.1bn; and a windfall tax on tobacco companies, expected to raise £150m a year. This is in the context of an expected NHS funding gap worth £2bn by 2015-2016, as calculated by the Nuffield Trust.

9 Maitland Political is part of the wider Maitland Consultancy Group, Europe’s leading financial and corporate communications consultancy.

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