Open Editor's Digest for free
Rula Khalaf, editor of the Financial Times, picks her favorite stories in this weekly newsletter.
The UK government's call to regulators to come up with ideas for growth is easily ridiculed. It's not entirely foolish to notify regulators that their remit may change – but only as long as you also consult those who know what it means to be regulated. Here, as is often the case with this government, the signals are confusing.
Judgment is difficult. There is some schadenfreude among veterans of previous administrations over the Labor Party's recognition of this fact six months after assuming power. When Sir Keir Starmer objected to what he called a “tepid bath of targeted decline,” he was expressing the frustration that every new prime minister feels. But in his case, things are made worse by the lack of a clear governing philosophy.
The new administration is full of energetic and hard-working ministers. But there is a bit of reading across. The Cabinet looks more like a group of individuals with widely differing views on the world than a team approaching a coherent analysis of what ails Britain, and what to do about it.
Hearing the Chancellor of the Duchy of Lancaster pledge to “make the country more like a start-up”, or the Minister of Science and Technology wax lyrical about artificial intelligence, or the Health Minister talk about patient choice, it is possible to feel optimistic. A very different impression arises from the Education Secretary, who is seeking to turn back the clock by tearing up two decades of politics between parties that have improved. Schools. And by the Deputy Prime Minister, whose massive workers' rights package is undermining business confidence, even as the Treasury tries to restore it.
All ruling parties are a coalition of interests. But the extent of the dissonance in this case makes it difficult to ascertain where that is government He will land on any given issue. This in turn makes it difficult to build trust.
Angela Rayner's argument employment The Human Rights Bill states that low productivity in the UK is partly attributable to insecure work. In light of this, some measures seem reasonable: eliminating “fire and rehire” practices that impose new terms and conditions on workers, helping the self-employed get paid on time, and relaxing some aspects of zero-hours contracts. But the bill contains a slew of other rules: on rights to sick pay from day one, parental leave and unfair dismissal, stronger union powers and other rules that directly conflict with the growth mission that Starmer claims is central.
Unsafe work can actually be harmful to productivity. But this is not work at all. The independent Regulatory Policy Committee criticized the government's impact assessment of the bill “Not fit for purpose” He warned that these measures would harm low-wage workers. Business surveys suggest the bill will accelerate moves toward… Invest in technology, not people. The complexity and scale of the new rights naturally means that an entirely new regulator will be created to oversee them.
No 10 and the Treasury are shocked by the business sector's reaction to the National Insurance rise, and are deeply concerned about the recent economic news. You would think they would radically back away from hiring proposals. Instead, a weak settlement of a nine-month probationary period was offered on the unfair dismissal case.
Given concerns about what the package might do to workers' prospects, only two groups stand to unequivocally benefit: lawyers and trade unions. Something similar applies to Schools bill From the Department for Education, where Secretary of State Bridget Phillipson appears to be working independently with no connection to anything the rest of the government is doing.
Phillipson wants to dismantle reforms initiated by Labour's Andrew Adonis, who grew up in a care home and was later encouraged by Conservative Michael Gove, the adopted son of a Scottish fish processor. These reforms have pushed English schools to rise in the international rankings to become among the best schools in the world. These proposals were based on the twin principles of creating academic schools with greater freedom, for example, increasing the pay of good teachers, and demanding greater accountability through league tables. Academies have become a tool for reforming failing schools.
Phillipson wants to get rid of much of this, in the absence of a compelling alternative philosophy on how to raise standards. Her answer to what to do about schools labeled “inadequate” appears to be to replace that word with something broader, which wouldn’t give parents the same clarity.
None of this makes any sense. There are improvements that could have been made, for example, in relation to the audit of multi-academy trusts. But why change a system that has helped large numbers of the poorest children?
When it comes to investment, Labour's majority brought some much-needed political stability. But investors also need to have confidence in the consistent direction of policy. They need an educated and flexible labor market as well. Ignoring this seems unwise, to say the least.
Unlike Boris Johnson, Starmer is neither lazy nor anarchist. But, like Johnson, he discovers that ideas, some of them very bad indeed, fill in any hint of a void at the center. In meetings, he is known for asking for solutions, not problems. But in Whitehall, the most stubborn questions move up the system until they reach the Prime Minister's Office. Without a clearer indication of what he wants, it will be difficult to drive the machine.
