Partnership and Policy Manager Jovana Lalic shares her observations from Labour's Party Conference in Liverpool.
With less than two years to go until the next general election, the mood of this year’s Labour Party Conference was one of buoyant optimism. The aftermath of the Government’s “Mini-Budget” has contributed to Labour’s 33-point poll lead over the Conservatives (the biggest poll lead by any party in 20 years), but commentators also noted how for the first time in years, the party was presenting a robust and fiscally responsible policy agenda fronted by a credible shadow front bench.
There were plenty of speeches, policy announcements and fringe events to analyse, but as the Conservatives appear to be rowing back, what did party conference tell us about Labour’s stance on levelling up and other urban policy issues?
Senior Labour politicians were candid about taking on the mantle of Boris Johnson’s agenda to reduce regional inequalities. Both Lisa Nandy (shadow secretary of state) and Alex Norris (minister for levelling up) spoke about how Labour was now the party of levelling up, with the latter noting it was about “money and power” for local areas to work “in partnership with businesses and educators” to provide training to local people, deliver high-skilled jobs and drive productivity. The news that Labour have hired Andy Haldane, former head of the Government’s Levelling Up Taskforce, show the party is serious about owning the agenda, with Nandy stressing the urgent need for a “great rebalancing of power and wealth”.
In conversation with IPPR, the Shadow Chancellor discussed the need for “strong financial institutions and public services” to deliver her priorities of “fiscal responsibility and social justice”. Reeves used the example of the Mini-Budget’s corporation tax cut and scrapping of the 45p income tax rate as being misaligned to what businesses want, as they instead regularly cite the need for investment allowances and an overhaul of business rates (although the extent to which the latter drives economic growth is debatable). Reeves pointed out how fiscal responsibility is now a dividing line in politics and promised a fully costed policy programme that reflects the needs of businesses and individuals.
Susan Hinchcliffe (leader of Bradford Council) made clear the importance of cities as the engines of growth for the national economy. This was echoed by Alison McGovern (shadow employment minister) who noted how the cities versus towns debate is unhelpful and ignores the economic link between the two; we have written extensively about how the underperformance of the UK’s biggest cities has consequences for their neighbouring towns. As Hinchliffe noted: “Bradford can’t be [economically] successful if Leeds isn’t successful.”
Leaders agreed that sustainable and predictable funding models were needed for local places to thrive and grow. Speakers across conference also talked about how the current system of places needing to bid for central government funding is ineffective. Marvin Rees, Mayor of Bristol, described how detrimental it was for his city to be pitted against the likes of Bradford in competing for funding, and how much internal capacity was taken up with writing bids which were not guaranteed to be successful. Andy Burnham, Mayor of Greater Manchester, added that the most effective funding model would be through a block grant to city regions, for which local leaders would have powers to decide what and where the money should go.
Burnham stressed the need for a “rewiring” of Britain’s political system, where a rethink of how power flows around the country is needed, given it is “unequally held and used”. He noted the role of local councils as the “building blocks” of devolution, and the strengths of the combined authority model as a result. Both Burnham and Steve Rotheram (Mayor of the Liverpool City Region) emphasised that Labour must be unequivocal in its commitment to devolution, and in particular the role of big cities such as Manchester and Liverpool in the debate; this was summed up by Rotheram, who said Labour needs to “demonstrate that they will invest in our cities and regions” which are underperforming.
Burnham also discussed how fiscal devolution was needed but it was more of a process of “baby steps”, given the relative infancy of regional administration in the UK compared to its European counterparts. He added how places having powers to introduce tourist taxes and workplace parking levies were a good first step to fiscal devolution. Separately, Nandy spoke about how Labour is considering devolving powers to councils to retain 1 per cent of basic income tax revenue to fund local services.
The common thread throughout the conference was of the need for political long-termism and stability. Quoting Lord Kerslake, Marvin Rees summed up the current situation as one where “places are disempowered and the centre is overcrowded”. McGovern highlighted how Britain’s political institutions need to provide healthy divisions of power between the centre and local government, allowing local leaders to make their places better to live and work in.
Toby Perkins (shadow skills minister) talked about Labour’s commitment to reforming government skills policy to create a more flexible regime. This is urgently needed. Joanne Anderson, Mayor of Liverpool, summarised the ongoing gap between the availability of skills and those needed by employers to fill record vacancy levels in a tight labour market as a “national emergency”. Speakers repeatedly highlighted the need for reform of the apprenticeship levy system and giving mayoralties the powers to determine how to spend their adult education budgets, to allow local decision-makers to align education and training provision with the needs of their labour markets.
Labour market inactivity was also repeatedly mentioned as a roadblock to economic growth, with speakers citing one in five of the UK workers as inactive for various reasons, including health and early retirement. Sir Stephen Houghton, leader of Barnsley Council, highlighted the “vicious cycle” of issues induced by being out of work, including mental health, and the need for place-based strategies to tackle inactivity. The shadow chancellor spoke about the relationship between inactivity and a lack of childcare, which disproportionately impacts women, and how policy action is needed urgently to tackle the cost of childcare.
The theme of this year’s conference was “a fairer, greener future”. Labour politicians discussed how inaction by successive Conservative governments on climate policy and Britain’s ongoing reliance on green tech imports was detrimental to the country’s economy and security.
Sir Keir Starmer vowed to turn the country into a “clean energy superpower” through commitments to phase out fossil fuels by 2030 and a pledge to introduce a Great British Energy company within Labour’s first year of power. GBE would be state-backed with a mandate to invest in clean energy; this nationalisation model is in operation across Europe through EDF in France or EnBW in Germany. Reeves announced an £8billion National Wealth Fund, with planned investments including new gigafactories and clean steel plants across the country.
At the local level, speakers discussed how the drive to net zero should be used as a catalyst to level up public transport across the country, given the role of transport in local economies as an enabler of job creation, sustainable population growth and fairness for communities. There was however little detail on the role of cities, which are key to delivering this green agenda. The party also needs to consider how policy can create conditions to achieve net zero by 2030, for example through increasing the density of the UK’s largest cities.
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