Priorities for Britain's new government - with George Parker

Priorities for Britain's new government - with George Parker

 

On Thursday 11 July, Canning House held its latest Business Breakfast at its Westminster offices. On this occasion, George Parker, Political Editor at the Financial Times, discussed Britain’s new government’s domestic priorities and global outlook, a week on from the United Kingdom’s General Election.

Following the landslide victory of the Labour Party, led by new prime minister Sir Keir Starmer, this exclusive roundtable breakfast offered attendees – a mix of Ambassadors and senior diplomats, businesspeople and analysts – an opportunity to hear from one of the UK’s leading political journalists on the ins-and-outs of this historic election.

George called the election result a “sea change moment” for British politics. Following a period for the Labour Party he described – quoting Lord Mandelson, formerly a Cabinet minister in Tony Blair’s Labour government – as “lose, lose, lose, Blair, Blair, Blair, lose, lose, lose,” George briefly explained how the UK’s ‘first past the post’ electoral system had delivered a large majority in Parliament for Starmer.

The British public had “had enough” of the Conservative Party, which had been in government since 2010, with the election’s result representing what George said was an “interesting moment for western democracy:” the arrival of a government styling itself as centre-left, moderate and mainstream, at a time of growth for populist and right-leaning movements in many countries.

Moreover, he put forward that the UK – pointing to cases including Brexit and Boris Johnson’s government (2019-2022) – had been through a “populist moment” already, out of sync with much of the rest of the world, and had now landed back in the “global mainstream.”

All that, he said, meant people are likely to look at Britain with “fresh eyes,” and that the UK would be watched with keen interest by international observers and investors.

Looking ahead, though, with Starmer and his party stating in their campaign that Labour is pursuing a “decade of national renewal” in government, George advised that a big majority in Parliament does not guarantee a win at the next general election, which barring any surprises would take place in 2029.

Indeed, just looking back at the 2019 election, in which the Conservative Party won a substantial majority under Boris Johnson’s leadership, with Labour receiving its fewest seats since 1935 under Jeremy Corbyn, George said many then saw a Labour victory at the next election as an “inconceivable” prospect. It is therefore possible – if, he stressed, unlikely – that some sensible choices could result in a Conservative Party bounce-back.

Now that it is in power, everything Labour does, said George, is predicated on the return of economic growth to Britain. With the economy having “limped along” since the 2008 financial crisis, the new government is betting on its reforms to the UK’s planning system, a possible investment ‘bounce’ in the wake of the election, and a new industrial policy dubbed “secure-onomics” to generate that growth.

In the meantime, it is highly likely that the Labour government will lay the blame for “difficult choices” – such as raising taxes or making reforms to the National Health Service – upon the previous Conservative government, with Starmer’s administration arriving with “a lot on its plate” – limited fiscal headroom or flexibility, dire need for infrastructural upgrade, and still-strained relations with the European Union, the UK’s top trading partner.

On the foreign policy front, George noted that the new government’s programme was getting underway at pace – with Starmer, his Foreign Secretary David Lammy, Defence Secretary John Healey and other ministers already in Washington DC for a Nato summit after less than a week in office. There, President Joe Biden has told Starmer that the US sees the UK as a “knot” in the transatlantic partnership.

Still, George expects little major difference in the broad-brush strokes of foreign policy between this government and the last on top-line issues – Ukraine, Gaza, China.

What he suggested will define the Labour government’s foreign policy is its focus on growth – foreign policy decisions, he said, would be guided by growth not as a slogan, but as a principle. George put forward that Lammy’s foreign policy doctrine of “progressive realism” would, in practice, likely involve a lot of realism.

Lammy has called for an immediate ceasefire in the Gaza Strip, and took a whistlestop tour of Europe in his first days in-post. George suggested that, remaining careful on national security issues, Lammy and his department would likely take pragmatic approaches to, for example, China and the Gulf states, always with an eye on growth.

Furthermore, George proposed that, for example, the Foreign Secretary's Indian ancestry - his great, great grandmother was from Calcutta - may help to build bridges in a reset of UK-India relationships. He suggested that the same could apply to relationships with South America, given Lammy's Guyanese parentage.

Briefly, George also discussed the opposition parties’ outlooks – the Conservatives perhaps looking to rebuild from their traditional electoral heartlands of England’s prosperous south, or perhaps not; Nigel Farage’s Reform UK’s building upon many second-places in constituencies across the country, and the possibility of a ‘reverse takeover’ of the right in British politics; and the Liberal Democrats’ curious opposition role in their return to being the third-largest party after their success at this election.

Overall, George saw a general mood of good will towards the new government, with wide acknowledgment that the country is in dire need of its success. He pondered, though, how long that good will might last.

Questions from the roundtable covered a wide range of topics: Labour’s path to its desired decade or more in power, limits to the UK’s relationship with the EU, the green economy and international collaboration, the Foreign Secretary’s policy doctrine, Labour’s proposed planning reforms, the two-child benefit cap, and the challenges posed by a parliamentary supermajority.

Canning House warmly thanks George for participating in another excellent Business Breakfast, and our attendees for their engagement and interest.