Labour Party conference highlights the need for further policy clarity

Last week, I was in Liverpool representing GIIA at the Labour Party Conference. Whilst the event was lively and well-attended, the atmosphere was more cautious than celebratory. This was despite Labour’s decisive election win in July, which marked their return to government after 14 years in opposition. The cautious mood seemed to stem from the enormous challenges the new government faces, coupled with a lack of immediate solutions to address them.

Throughout the speeches and fringe events, Labour ministers provided only limited clarity on key policies, leaving many attendees eager for more concrete details. Major initiatives like the industrial strategy, the National Wealth Fund, and Great British Energy remain central to Labour’s vision, but specifics have been deferred until the autumn budget at the end of October. This lack of detail left the conference clouded by uncertainty, with much of the discussion confined to speculation.

Further contributing to the sense of unease were recent controversies that have marred the government’s early days. Questions about Keir Starmer's acceptance of complimentary trips and clothing, along with criticism of his chief of staff’s influence, have slightly dented the Prime Minister’s credibility. These issues have led to a drop in both Starmer’s personal approval ratings and Labour’s polling numbers since July.

Nevertheless, the conference saw record attendance, with around 20,000 people gathering in Liverpool. There was a clear sense of determination to get the UK back on track. During his ‘Business Day’ fireside chat, the Prime Minister again highlighted the importance of partnership, emphasising No.10’s role in connecting investors with the appropriate government bodies to foster collaboration. Labour’s agenda hinges on leveraging private capital to help fund and deliver essential projects. Great British Energy (GBE) and the National Wealth Fund are set to play pivotal roles in public-private collaboration, with the aim of accelerating the UK’s transition to clean energy and driving economic growth. With billions in capitalisation, both entities are expected to unlock significant investment opportunities in renewable energy and infrastructure.

Jonathan Reynolds, the Secretary of State for Business & Trade, spoke confidently about the UK’s new industrial strategy, which is expected to guide government departments in building the supply chains and skills crucial for the country’s growth. Much has been promised for this strategy, and we anticipate further details in the coming months.

Chancellor of the Exchequer Rachel Reeves ruled out a return to austerity in her budget and began laying the groundwork for increased capital expenditure from HM Treasury to boost investment across the country. She is reportedly exploring adjustments to fiscal rules to create space for this spending and urging the Treasury to weigh the benefits of government investment alongside its costs. This comes as Labour seeks funding to meet their ambitious manifesto commitments and, attract private investment by de-risking critical projects.

Whilst the conference fell short in terms of providing clarity on Labour’s new policy instruments, senior ministers reinforced their commitment to collaboration with the private sector as central to their agenda for change. However, they must deliver concrete details in the coming months or risk being seen as "all talk and no action." Investors will be watching closely to see if the government can fulfil its promises and provide the stability needed for transformative infrastructure development.