Having flipped the political map red, Labor’s priority is to lead the economy into surplus.
Sir Keir Starmer’s The government’s plans may be modest, but the means to implement them are not.
With the new Prime Minister Rachel ReevesAs the first female prime minister, she inherited a tough economic legacy.
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Stagnant growth, high debt interest payments, and an ageing and sickly population have strained public services.
If we are to revive these countries without breaking election promises of not adding to the debt or raising taxes, it all depends on delivering growth.
Early signs from financial markets The test was positive..
Just two years later Liz Truss The mini-Budget saw the pound crash and borrowing costs soar, but Sir Keir’s arrival was without similar drama.
The pound and 10-year government bonds both stabilised and the FTSE 100 index rose, led by housebuilders and lenders, after Labour’s plans to boost housebuilding were endorsed.
The British-heavy FTSE 250 index also rose more than 1% in the first hour, a possible vote of confidence that Labour’s all-important promise of stability will be delivered.
Sir Keir and Mr Reeves have promised to stimulate growth, but to deliver it they will need the private sector and investors the UK has confidence in.
How effective these plans are, and how the new ministers deal with the difficult challenges and inevitable unknowns, will determine the direction of the administration.
Top of the list is planning reform, aimed at boosting housing and energy infrastructure, rewriting the rules and reclassifying green belt land to provide housing in the face of inevitable local opposition.
Barriers to onshore wind, which has been stalled for a decade under Conservative governments, and solar power, which is attractive to farmers but not their local neighbours, will be removed, and the national electricity grid will be expanded and improved.
This will be good news for companies like Octopus, the UK’s largest retail energy company, which aspires to become a major power generator if renewable energy projects become easier to achieve.
Founder and chief executive Greg Jackson welcomed Labor’s efforts in this area. Rishi Sunak Recent net zero skepticism.
“What we have now is hopefully the stability to be able to invest in providing cheaper green electricity systems,” he told Sky News.
read more:
Labour wins, but what happens next?
Labour’s path back to power
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Starmer: ‘Change starts now’
Mr. Jackson has specific demands.
He wants to see simplified planning (currently it can take 13 years for a project to be connected to the grid), market reforms to allow local people to benefit from local renewable energy, and increased electrification.
The Labour Party will bring forward the phase-out of new petrol and diesel cars to 2030. Sunak’s delay to 2035.
“The big message to me is that voters rejected a return to fossil fuels, oil and gas. Every poll shows they know wind and solar are cheaper, safer and more reliable sources of electricity we need,” he said.
“The UK can be a proud leader in this transition and it will be great for jobs.”
“The countries that lead the way will be the most prosperous, and I truly hope that is where we are right now.”
The oil and gas industry They will oppose increases to temporary taxes and a ban on new North Sea licenses.On the other hand, the Labour Party’s approach is Brexit.
Improving relations with the EU seems to be of greater interest to businesses than to the Labour Party.
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A return to the single market and free movement – a shortcut to growth – is deemed politically and practically impossible in the short term, but Sir Keir and his team have been negotiating a warmer relationship with Brussels and improving the terms of the current agreement.
Three years on, the negative impact on British businesses trading with Europe is indisputable and companies large and small are no longer shy about talking about it.
Socrates Camenon founded Golden Delight Foods, a food processing and distribution company, in the 1980s. Greece And other European countries until Brexit.
“It has had a devastating effect,” he said.
“All our exports have been lost, there are constant shortages of products, prices are rising and the administrative and paperwork challenges are daunting.
“The bureaucracy created a nightmare.
“When a businessman makes a mistake, he has to make a U-turn.
“We made a mistake. We have to go back there and renegotiate.”
“We knew the Europeans wouldn’t make it easy for us. They had to make us an example to set for the other 27 countries.”
“But we are the people who have been inflicted with pain.”
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While cutting international red tape will be welcomed, Labour’s plans to impose domestic red tape in the guise of employment reforms have caused great unease.
“A New Deal for Workers” Downgraded There has been a shift from hardline policies to consultation, but it remains at the core of the policy Labour puts forward to voters.
Measures include promising “day one employment rights” including parental leave and sick pay rights, an end to “exploitative” zero-hours contracts and closing the ethnicity and disability pay gap.
Living wages are also rising, and small businesses are feeling these potential costs most keenly.
Some voters are also in favor of Reeves’s prospect of equalizing capital gains taxes, a measure that would end an inequity in which people who hide income as capital gains pay less tax than workers, but could also discourage wealth creators from taking risks.
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While the economic situation may provide some positive signs, inflation Stabilized at around 2% Interest level A decline next month is likely, but it could leave some wiggle room to cheer households and markets.
But Mr Reeves and the proposed next Business Secretary, Jonathan Reynolds – who has held the role behind the scenes for more than two years – are unlikely to be able to afford to take advantage of that.
Your inbox is already full of pesky issues Thames Water debt crisis and the prospect of special administration, de facto nationalisation.
Thames Water’s annual accounts are due to be published next Tuesday, and 48 hours later the water regulator, the Water Board, will announce the rates it and all other water companies will be able to charge customers from now on – a big price increase is certain.
If Thames Water remains, in the words of its chief executive, “uninvestable”, the new government may have no choice but to install a costly and possibly open-ended administration.
How it is handled, and the consequences for Thames Water’s shareholders and lenders, will have implications for how the UK is viewed by global investors on whom Labour is relying to fund the energy transition and beyond.
One area Labour has promised to nationalise is the railways, but this will be done in stages as private contracts expire and will need to be approved by the Ministry for Business. Controversial foreign takeover of Royal Mail’s parent company.
In addition, urgent transactions Tata This decision over the future of the Port Talbot plant will be a much bigger burden for the Labour Party than for the outgoing government.