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Roula Khalaf, editor of the FT, picks her favorite stories in this weekly newsletter.
The UK government’s plea to regulators to come up with ideas for growth falls flat. It’s not entirely foolish to warn regulators that their mandates may change – but only while also consulting with those who know what it’s like to be regulated. Here, as so often with this government, the signals are confusing.
It’s hard to rule. There is some schadenfreude, among veterans of previous administrations, when Labor admitted this for the first time after six months in power. When Sir Keir Starmer decried what he called a “lukewarm bath of managed decline”, he was expressing the frustration felt by every new prime minister. But in his case, things were made worse by the lack of a clear management philosophy.
The new administration is full of energetic ministers who work hard. But there is a bit of read-across. The Cabinet feels more like a group of individuals with wildly different world views 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 promise to “make the country more like a start-up”, the science and technology minister gushing about artificial intelligence or the health minister talking about patient choice, it’s possible to feel optimistic. A completely different impression is left by the education secretary, who is seeking to turn back the clock by overturning two decades of cross-party politics that improved schools. And the Deputy Prime Minister, whose huge package of workers’ rights is further undermining business confidence, even though the Ministry of Finance is trying to restore it.
All ruling parties are an interest coalition. But the extent of the dissonance in this case makes it hard to be sure where that is government will land on any question. Which in turn makes it harder to build trust.
The argument for Angela Rayner employment of the Bill of Rights is that low productivity in the UK is partly explained by insecure work. In this light, some of the measures seem reasonable: ending “fire and rehire” practices that impose new terms and conditions on workers, helping the self-employed get paid on time, and easing some aspects of no-hours contracts. But the bill contains a whole host of other rules: on sick pay rights from day one, on parental leave and unfair dismissal, on stronger union powers and others that are directly at odds with the growth mission that Starmer claims is central.
Insecure work can really be bad for productivity. But there is no work. The Independent Regulatory Policy Committee has strongly condemned the government’s assessment of the impact of the law as “not fit for purpose”, and warned that the measures would hurt low-wage workers. Business surveys suggest that the bill will accelerate the transition to invest in technology, not people. The complexity and scope of the new rights mean – of course – that an entirely new regulator will be created to oversee them.
Number 10 and the Treasury have been hurt by the business reaction to the rise in National Insurance and are deeply concerned by the recent economic news. You’d think they’d radically back away from employment proposals. Instead, a weak compromise of a nine-month probationary period was offered on the issue of unfair dismissal.
Given concerns that the package may affect workers’ prospects, only two groups stand to benefit unequivocally: lawyers and unions. Something similar applies to school account from the Department for Education, where Secretary of State Bridget Phillipson appears to be a freelancer with no connection to anything the rest of the government is doing.
Phillipson wants to dismantle the reforms started by Labour’s Andrew Adonis, who grew up in care, and later turbocharged Conservative Michael Gove, the adopted son of a Scottish fish processor. The reforms have pushed English schools up the international rankings and become some of the best in the world. They were based on the twin principles of creating academic schools with more freedom, for example paying good teachers better, and demanding greater accountability through league tables. Academies have become a tool for turning around failed schools.
Phillipson wants to sweep much of that away, without a compelling alternative philosophy on how to raise standards. Her answer to the question of what should be done about schools ranked as “inadequate” appears to be to replace the word with something broader, which will not give parents the same clarity
None of this makes any sense. There are improvements that could be made, for example in relation to the oversight of multi-academic trusts. But why change a system that has helped a large number of the poorest children?
When it comes to investment, a Labor majority has brought much-needed political stability. But investors also need confidence in a consistent policy direction. They also need an educated and flexible labor market. Ignoring it seems imprudent to say the least.
Unlike Boris Johnson, Starmer is neither lazy nor chaotic. But like Johnson, he finds that ideas, some of them very bad indeed, fill every hint of a vacuum at the center. In meetings, he is known for looking for solutions, not problems. But in Whitehall, the thorniest issues move up through the system until they land on the Prime Minister’s desk. Without a clearer indication of what it wants, it will be difficult to operate the machine.
