The five missions of a Labour government. Leader of the Opposition Sir Keir Starmer explained Labour’s “statement of intent to how we intend to govern” through five missions, which will likely form the backbone of their election manifesto. Their priorities are: securing the highest sustained growth in the G7, a zero-carbon electricity system in Britain by 2030, an NHS “fit for the future”, making Britain’s streets safe and breaking down barriers to opportunity (through childcare and education reform).
Clarifying Labour’s new role for the state. The mission-led approach has received some criticism for being ambiguous about the role of state intervention in markets, which some argue risks an overreliance on private sector delivery. Starmer said he is “not concerned about whether investment or expertise comes from the public or private sector - I just want to get the job done…Mission-driven government is a different way altogether. Not state control or pure free markets, but a genuine partnership”. Interestingly, the refrain of “get the job done” seems to echo the New Labour slogan“what matters is what works”, but with an important difference: in the late 1990s this apparent ambivalence between public and private sectors was used to justify more market involvement in public services, whereas Starmer is using the phrase to justify more state involvement in markets.
The transformative potential of a mission-oriented government. Missing from much of the commentary around the speech has been a sense of what it means for Labour to be thinking and talking in the language of ‘missions’- with little distinction being drawn between Labour’s ‘missions’ and the government’s five targets. But missions are much more than just targets. A mission-oriented approach to solve ‘grand challenges’ such as climate change is a seminal part of new economic thinking. The idea of using government to explicitly steer the direction of economic activity to achieve ‘missions’ was popularised by Mariana Mazzucato, founder and Director of the UCL Institute for Innovation and Public Purpose. By making strategic investments in particular sectors, such as green industries, an active industrial strategy from an ‘entrepreneurial state’ can kick-start the development and take-up of new technologies, develop new markets for UK companies, trigger greater private sector investment, and tackle major environmental challenges.
“Stealth cuts”. According to new analysis by the New Economics Foundation (NEF), the government is hiding £28 billion of “stealth cuts” to public services, despite promising in the autumn statement to increase spending by 1% a year. However, as NEF’s Alfie Stirling explains, these calculations were reliant on OBR forecasts which predicted that inflation could be as low as -1% in 2025/2026. However, in the likely event that the Bank of England were to intervene to meet its 2% inflation target, this predicted growth in spending actually becomes “real-terms cuts”.
Public sector pay and the wage-price spiral myth. Ahead of the Spring Budget, the Institute for Fiscal Studies (IFS) explores “the most acute short-term policy challenge for the Chancellor” - public sector pay - and the options facing the Treasury. It explains how inflationary pressures are not a reason to hold back public sector pay. “Given the absence of market prices in public services such as the NHS, it is difficult to see how a higher public sector pay award could directly trigger a ‘wage–price spiral’”, the IFS argues.
Essentials Guarantee. The Joseph Rowntree Foundation (JRF) and the Trussell Trust have called on the Government to reform Universal Credit and provide an 'Essentials Guarantee', with research showing that 90% of low-income households on Universal Credit are going without essentials. The Essentials Guarantee as proposed by JRF and the Trussell Trust would be determined by an independent process, based on the cost of essentials such as food, utilities and vital household goods. It would ensure that a standard allowance of Universal Credit would at least meet this level and that deductions could "never pull support below this level".
Windfall tax on banks. “Just like oil and gas companies, banks are cashing in on the cost of living crisis, and should be subject to the same taxes on their unearned windfalls” argues Positive Money’s Fran Boait. Positive Money have launched a petition with nearly 12,000 signatures calling for a review of the “current macroeconomic and monetary policy frameworks” as “the responses by the government and Bank of England to the cost of living crisis aren’t working and shows there's urgent need for a rethink”.
Impact of a housing market downturn. “It is time to wean the UK off its addiction to house price growth” and to create a “more sustainable, affordable and equitable housing market”, argues a new report by the Joseph Rowntree Foundation (JRF). The report examines five different housing market scenarios, finding that the most likely scenario “is one of stagnation in transactions and new supply, with modest declines in nominal house prices, though inflation means that real price falls will be deeper than many people realise”. It proposes a number of policy responses such as taxation of speculative and short-term uses of property, restricting who can buy homes in pressure points, and strengthening the safety net for low-income homeowners.
Private rented sector energy efficiency. 31% of private renters “feel unable to heat their home to a comfortable temperature”, often due to “poor energy efficiency of privately rented homes”, finds new research by Citizens Advice. The research found that renters in homes with an EPC D-G were 73% more likely to experience damp than those with an EPC of A-C and were 89% more likely to experience excessive cold than homes with an EPC of A-C. Citizens Advice proposes strengthening Minimum Energy Efficiency Standards to upgrade all homes in the private rented sector to EPC, ending Section 21 ‘no fault’ evictions, and raising the costs cap for landlords to improve their properties.
4 Day Week: National Rollout Programme. Following the world’s biggest four-day working week pilot, with 92% of participating companies deciding to continue with the programme, Autonomy and the 4 Day Week Campaign have launched a National Rollout Programme for UK companies and organisations interested in moving to a four-day week this year.
Women’s Pay Day. 23rd February marked Women’s Pay Day - the day when the average woman stops working for free compared to the average man, according to analysis by the TUC. It finds that women aged between 50 and 59 have the highest pay gap (20.8%) and work the equivalent of 76 days for free, until Thursday 16th March 2023.
The UK’s post-Brexit trade performance. Analysis by the Resolution Foundation finds that UK trade performance has been better than expected following the UK’s exit from the EU. However, it also finds that growth in goods exports is “likely to be temporary” and is inflated by gold and precious metals”.