The State of the Labour Party?

By Tom Frackowiak, Executive Director, Cicero Group

For the last six months there has been a strong appetite from businesses that I speak to on a regular to basis to understand more about Labour, its policies, and the impact of a Labour Government.

The political uncertainty caused by the ongoing paralysis created by Brexit and the 2017 General Election result make the calculation of a Labour Government a reasonable assumption.

But what would be the impact of a Labour Government?

In his 2018 party conference speech, Shadow Chancellor, John McDonnell stated, “The greater the mess we inherit, the more radical we have to be; the greater the need for change, the greater the opportunity we have to create that change and we will”.

On the surface of it, the Labour policy platform reflects this bold approach. Some of the most eye catching of Labour’s policies include:

  • Replacing the ‘dysfunctional’ water system with a network of regional, publicly-owned water companies;
  • Establishing a new National Investment Bank and a network of regional development banks;
  • Looking to bring the railways back into public ownership;
  • The introduction of an “Inclusive Ownership Fund for all UK companies in the UK, through the transfer of at least 1 per cent of their ownership into a fund for employees;
  • Increasing corporation tax and introducing a Financial Transaction Tax (FTT); and
  • Ending free movement of people.

Other wider reviews commissioned by McDonnell and his team, led by Graham Turner and Prem Sikka, include recommendations to insert a new productivity target in the Bank of England’s remit and more radically overhaul the structures of business regulation, with more input from “citizens and societal stakeholders.”

With many of these policies the devil will be in detail, before we can understand the full impact, but much of this programme causes nervousness within business. I often hear talk of a ‘worst-case’ scenario, a disorderly Brexit, followed by a Corbyn Government.

You can argue the rights and wrongs of this view, but coupled with Jeremy Corbyn’s personal views on foreign policy and issues such as nuclear disarmament, then a Corbyn led Labour Government will attempt to implement a radically different domestic and international policy programme than undertaken by any previous UK Government of the last 40 years, and arguably far longer.

Labour’s Struggles

So how close is Labour to power?

In the current political context, it would be foolish to rule out Labour’s chances of forming the next Government. Paradoxically there is also the very real threat that Labour is heading towards an existential crisis that not only undermines Corbyn’s chances of getting hold of the keys to No.10, but also threatens the existence of the Labour party in its current form.

The Brexit process has tested the parameters of both the Conservative and Labour parties, breaking down the ability of either party to coalesce around a unified position on the Withdrawal Agreement, even before we get into negotiations on a free trade deal with the EU27.

Since Labour’s and Jeremy Corbyn’s strong personal performance in the 2017 General Election, the Government and Conservatives’ own fractures on Brexit have been an open goal for Labour, bringing a truce to hostilities within the party. However, this relative harmony has unravelled since the Labour party conference of 2018, as splits between the leadership around Corbyn and the Shadow Brexit Secretary Keir Starmer MP on how hard to push for a second referendum have filtered out across the Parliamentary party, Labour movement and wider membership.

These divisions within Labour have been blown wide open by the inability of the party and in particular Jeremy Corbyn to deal with ongoing allegations of anti-Semitism, which has resulted in nine MPs  leaving the party in recent weeks, all of whom have cited antisemitic abuse and threats as at least part of the cause. It has also caused considerable damage to the Labour brand, with the ignominy of the Equalities and Human Rights Commission, ironically established by a Labour Government, announcing it is considering an investigation into the Labour Party on anti-Semitism.

The implications of both Brexit and anti-Semitism on the Labour party have been dramatic. The formation of The Independent Group (TIG) in a blitz of media headlines has resulted in eight Labour MPs resigning from the party to join the new group, with potentially of more resignations to come, and provides a political vehicle for disenchanted Labour members and voters who feel the party hasn’t done enough to halt Brexit. This is reflected in political polling – with all the caveats around poling – which indicates that presently TIG will have a bigger detrimental impact on the Labour vote, despite former Conservative MPs Heidi Allen, Ana Soubry and Sarah Wollaston having also joined the group.

Perhaps more significantly, and  not as widely reported, is the creation by Deputy leader Tom Watson MP of an internal group within Labour to represent the social democratic wing of the party. This has created a strong powerbase within the Labour party for Tom Watson and other disaffected Labour MPs, and we are already seeing them directly challenge the Labour leadership, particularly on anti-Semitism. It is unclear at this stage what the exact intentions of this group are, but it has the potential to create a party within a party, or worse still for Labour, be used as a vehicle for a larger schism.

In all this, the political danger for Labour is that the Conservative party is able to rally behind a new leader – and this is by no means certain – if a Withdrawal Agreement is achieved with the EU27, which will only highlight the divisions within Labour to an electorate which is tired and  angry with politicians of all persuasions, but especially those who appear more interested in squabbling among themselves than dealing with the huge issues facing the country, from Brexit to knife crime and climate change to welfare.

The Court of Corbyn

With all of this in mind, and a Labour Government being elected still a real possibility, we at Cicero will be looking in depth at the party, its policies and plans for government in the coming months and beyond.

One of the most common bits of feedback we receive is that organisations struggle to identify and understand who key people are around the Labour leadership and so we have produced an updated ‘Court of Corbyn’ organogram which depicts who are the key advisers and party officials around Jeremy Corbyn and his most influential Shadow Cabinet members.

You can view this here.

This will be just the first in a series of upcoming events and publications focussing specifically on the Labour Party so please get in touch if you would like to receive our Labour analysis or discuss what a Labour government could mean for your organisation.

Get in Touch

Tom Frackowiak

Executive Director, London

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