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Election Blog – Week 6

There we have it, a historic Labour landslide without a landslide in vote share. First thing to say is that this is an extraordinary achievement, particularly from where Labour was after the last General Election in 2019. Labour has achieved a remarkable efficiency turning votes into seats.

While there is no doubt that the Labour majority is the headline story, when we look at the numbers and the trends, there is a clear and significant political challenge ahead for Labour.

First of all its majority is wide but shallow. This means that most of its seats are vulnerable to a shift in popularity. It will need to deliver and make people believe it is delivering, quite early on.

Second, in several seats it faces challenges from Reform UK, left wing independents and the Green party. There will be a faction of Labour MPs who will have Reform UK as the main challengers in their constituency, while another group of MPs will have pressure from the left within their constituency. Balancing these two groups of Labour MPs, with differing political pressures, on issues such as the two child benefit cap, the Israel/Hamas war and public spending cuts will require political dexterity.

These challenges sit on top of the economic and fiscal challenges facing the country. Labour’s number one goal will be economic growth, with the hope that the tax revenue generated from growth can be invested in public services in the second half of the parliament. The strategy for achieving this will primarily be through planning reform, and a positive environment for business investment. This growth will need to come early in the five year parliamentary term for its impact to be felt.

Which feeds into the fiscal challenge. Labour will now have full access to the public finances and will have to make a decision about tax and spend. It is signed up to the Conservative spending projections, and the current fiscal rules. On current projections for growth, this means £17bn in public sector cuts to non protected departments, such as FE and skills. Medium term Labour will be hoping that economic growth can fill this hole. In the short term it has a budget and a Comprehensive Spending Review in Autumn, and new Chancellor Rachel Reeves will have to make a decision on whether to cut spending, raise taxes or raise borrowing. This has major implications for how Labour implements its plans for a Growth and Skills Levy in that their scope and speed of introduction may depend on whether the Treasury agrees to releasing some of the current levy top-slice to DfE skills budgets.

Remarkably this is Sir Keir Starmer’s first ministerial job – straight in at the top. On top of the long term structural challenges mentioned above, an internal dossier revealed potential early crisis points he might have to negotiate, such as university funding, council funding, public sector pay negotiations and public sector pay negotiations. No one said the job was easy!

For the Conservatives there will be a period of soul searching. The former Prime Minister Rishi Sunak will resign, starting a Conservative leadership race that should conclude before its party conference in late September. If the MPs cannot agree on a single candidate the ultimate vote on leader will be given to its party membership who skew to the right of the country. The pressure on the Conservatives to move to the right will be significant, particularly with Reform UK having such a good night.

It feels like the UK is now securely a multi-party country now. Putting aside nationalist parties, the Green Party made significant gains and Reform UK polled higher than the Liberal Democrats. The combined vote share of the Conservatives and Labour is down quite significantly. This points to the continued unpredictability of UK politics and the continuing decline of affiliation with any one party.

AELP will work with the new government to make sure the skills system is fit for purpose and working for employers and learners. Skills is such a vital ingredient for all Labour’s priorities, making it essential for its re-election hopes. It is also the best policy if the party wants to have an immediate impact on the economy and on people’s lives.

Election Blog – Week 6

While there is no doubt that the Labour majority is the headline story, when we look at the numbers and the trends, there is a clear and significant political challenge ahead for Labour.

Last published: 05/07/2024