Labour’s Challenging Start
Believe it or not, until this week, we could still have had a Tory Government with Rishi Sunak as Prime Minister.
The final date by which the 2024 general election had to be held was the 23rd of January 2025.
Assuming Labour would have won, Keir Starmer would not yet have had his first weekend in Downing Street. He’d still be out on the campaign trail. No-one would be disappointed yet.
This is an important point: it’s incredibly early in the life of this Government. When I say they’ve had a challenging start, that’s not - for a split second - saying that I think it’s game over for this Government. There is plenty of time before 15th August 2029 (the date by which the next general election must be held).
But I’m hoping some key things will change.
An unprecedentedly awful legacy
First of all, let’s just be clear. Labour inherited the worst legacy of the democratic era. I’ll list a few specifics but the list could be longer:
The worst structural inheritance of modern times: anaemic economic growth, climate change, Brexit, Russia, post-Covid, an ageing population
Spending baselines set by the Tories that were obvious nonsense, baking in cuts in the forthcoming Parliament bigger than austerity. They knew they’d lose the election so would never have to explain how they’d square the circle but it forces Labour to increase taxes just to keep things as they are
And things are atrocious: an immigration system in meltdown and core public services (prisons, courts, the NHS, special needs education) in crisis
Moreover, they had to enter Government without a functional Cabinet Secretary. There’ve only been two changes of Government in my lifetime: 1997 and 2010. In both cases, the transition was expertly managed by the respective Cabinet Secretaries Robin Butler and Gus O’Donnell (known internally as GOD), meaning that the incoming Government was able to hit the ground running. The Tories bequeathed Sir Simon Case: a man who was an underqualified crony of Boris Johnson’s when he was at work, and was on long term sick anyway.
Let’s be clear, when Rishi Sunak had his “Things Can Only Get Wetter” moment in Downing Street and triggered an early election, he didn’t do this because he expected everything was going to be brilliant for the rest of the year. He had the option of serving 821 days as PM and he voluntarily handed back 203 of them: exactly 25% of his potential term. If he’d thought the autumn was going to go well, he’d have wanted to stay and take the credit. There’s no clearer admission that he knew he was handing over a poisoned chalice.
So let’s be clear: Labour have had an exceptionally awful inheritance and it would hardly be surprising if they’d made a pretty bad start.
Rishi Sunak: things can only get wetter
Moreover, the fact that the Tories went early made it impossible for the incoming Government to plan. Only in the ludicrous British system can a Government come into office without any meaningful warning. Labour had no more idea than you or I when the election would be. Pundits had speculated on April, May, July, September, October, November and January. Big range! Everything from the Parliamentary calendar to the likely crises are different depending on when you start. They were hit immediately by riots and small boat crossings: neither of these things are typical in winter.
It is, in fact, worth pausing and reflecting just how mad our system is. Sir Keir Starmer first heard there was to be a July election on the day it was called. He was then thrown into a 24/7 campaign. On July 5th, he was appointed PM having had no sleep. He’s been in charge ever since. Donald Trump has known that today would be the day he’d come back (if he won) since he left office last time, and has had the last two months to do detailed preparation. (I’m sure he used it well)
There’s lots of grumbling, grousing and griping about Labour’s performance to date. Idiotically, Sir Keir Starmer is now the second least popular prime minister in history after Liz Truss. I mean, come on!
I’m not going to agree with a lot of it. They had an appalling inheritance, no time to prepare and a Cabinet Secretary on the blink. It would have been a miracle if it had been better, frankly!
If life Gives you Lemons…
So why am I disappointed?
Well, there’s a quote from Sir Vincent Van Gogh that’s relevant (though I doubt he was talking about intelligent use of regulation when he said it):
Great things are not done by impulse, but by a series of small things brought together
What he may or may not have meant is that it’s not just about the big, grand changes: it’s also about the aggregate effect of small things. And one of the joys of being in Government is that a political party doesn’t only have the chance to bring in huge, epoch-changing reforms: it also makes all of the thousands of decisions that being in Government involves.
Let’s be honest: Sir Keir Starmer (bless him!) isn’t great at the big visions and doesn’t seem the kinda fella to do epoch-changing reforms.
So let’s have a look at how the smaller things are going.
National Planning Policy Framework
Planning is key. Firstly, it’s by far the most high-profile change the Government has pledged to make. Secondly, it’s the biggest single driver of sustainable transport. As I wrote here, housing policy in recent decades has ‘designed out’ the possibility of good quality public transport: often without providing any obvious benefits to residents in return. Nothing is more important to enabling places to be sustainable than how they are built.
Moreover, this is one of the few interventions which is politically uncontentious. These houses don’t yet exist, so there is no noisy minority of residents complaining about change.
So let’s see how the National Planning Policy Framework does:
Maximum parking standards for residential and non-residential development should only be set where there is a clear and compelling justification that they are necessary for managing the local road network, or for optimising the density of development in city and town centres and other locations that are well served by public transport.
Oh dear. This isn’t good. Maximum parking standards are a key lever. If houses are surrounded by hard-standing for cars, they will be too low-density to support public transport. Moreover, if developments are designed on the basis that some of the household’s trips are going to have to be by public transport, then the developer will design public transport into the site. But the framework says that maximum parking standards should only (that’s very prescriptive!) be used in locations that “are well served by public transport”. This is chicken and egg stuff! The maximum parking standards are the tool to stimulate the public transport.
OK, well even if the framework doesn’t allow that particular intervention, presumably it will be pretty clear that developments must be designed around sustainable travel. Turns out not:
Significant development should be focused on locations which are or can be made sustainable, through limiting the need to travel and offering a genuine choice of transport modes. This can help to reduce congestion and emissions, and improve air quality and public health. However, opportunities to maximise sustainable transport solutions will vary between urban and rural areas, and this should be taken into account in both plan-making and decision-making.
Sounds like the kind of thing I used to write as a conclusion to a Uni history essay (I always liked to hedge my bets when it came to firm opinions). Yes, we’d like some sustainable transport please but not too much. Let’s remember that we’ve officially been saying this stuff since the days of the late, great John Prescott as Deputy Prime Minister. Yet my in-laws’ house (that I referred to in the post I linked to) was built since then. Because you see, (and this is really crucial) we’re not actually doing it. So the NPPF needs to be vastly stronger than what came before, or nothing will change. It isn’t, so it won’t.
Which, given the word Change was all over the Labour manifesto, is a bit of a shame.
Nanna and Grandad’s house. Lovely to visit with the kids but try getting there by public transport
The Budget
When doing Economics A-Level, I remember Mr Wakefield holding up the bar charts of Government revenue and expenditure and saying that, basically, this was all politics was about.
It’s a simplification but there’s a lot of truth in it. Who gets what and where the money comes from is a huge driver of the outcomes of Government.
And, I’m afraid, the last budget wasn’t hugely encouraging. Those of you who listened to my immediate reactions podcast with Sir Michael Holden will have heard me trying to find the grounds for optimism. Sir Michael was more realistic. Unfortunately, he was right: it was, as he put it, ‘pretty thin gruel’ for transport and mobility.
Rail fares: up
Bus fares: up
Fuel duty: frozen
That means the cost of driving, when compared to sustainable modes, will fall. It is very hard to see how this prioritisation aligns with the requirements of the Climate Change Act 2008 (passed by Ed Miliband, during his previous stint as Energy Secretary), given that transport is the only sector of the economy not to have reduced emissions since the 1990 benchmark date.
The Government also got into a terrible tangle over National Insurance. The Tories announced a ludicrous, unaffordable 2p cut in employees’ national insurance contributions in the 2024 Spring budget. It was evident to everyone that it was completely unsustainable and would have to be reversed. The Tories only did it because they knew they were on track to lose and wanted to put Labour into an awkward spot. Labour’s escape from the short-term trap that the Tories had set was to support the NI cuts.
But, of course, while this got them out of the pre-election trap, it set an enormous post-election trap.
Because the tax cuts did need to be reversed.
The Government has attempted to square the circle by putting the tax back onto employer National Insurance, not employee. From the point of view of the Exchequer, it hardly makes any difference: the NI cut has, in effect, been reversed. But because it’s now being paid by employers not employees, this is a significant increase in the cost of the transport sector.
The public transport sector, including the supply chain, employs around 500,000 people. The NI increase costs each employer around £1k per worker. That means the industry’s cost base has gone up by £500,000,000 per year, at a time it can’t afford it.
If it were a necessary cost increase; well, there you go. But it simply results from the political cowardice not to tell the truth back in the Spring: that the Tories were attempting to bribe voters with their own money and public services were too broken to afford further cuts.
Devolution White Paper
If you’ve read any of my posts on innovation (or are one of my clients on this topic), you’ll know I’m passionate that innovation requires empowerment. I’ve written about that here and here. People need to be given the chance to experiment and try things. Innovation cannot be delivered top-down.
Well, the same is true for a country.
Indeed, one of the main reasons Britain is in such a mess is our extraordinary over-centralisation. Here’s what Sam Freedman of the Institute of Government has to say about it in his book Failed State, which gets into detail on this precise issue:
Concentrating power at the centre of government, and destroying state capacity outside of it, while at the same time massively increasing the scope of what government covers, is a core reason for our policy paralysis.
The answer is for the Government to give local communities proper, meaningful power. In a country in which 96% of taxes are raised centrally, it’s a radical idea. Anywhere else, it’s just obvious. Britain is (by far!) the outlier amongst big countries at having so much raised centrally.
The only other countries in the OECD with more than 70% of taxes raised by central Government are Estonia, Norway, New Zealand and Ireland: the largest of which have populations around half that of London alone. No other country, big or small, has more than 90% of taxes raised centrally. Yet in the UK even those taxes that are in theory raised locally aren’t in practice. Council tax caps are set centrally and the decisions on what they may be used for are made centrally.
The reality is that Britain has been on a 40-year journey of gradually undermining local and regional Government that has reached a point where in all practical senses, Britain has just one Government: in Westminster.
This is terrible for innovation and experimentation.
In other countries, good ideas can emerge bottom-up. A local or regional Government can have an idea, fund it, try it and - if it works - it can be adopted elsewhere. That’s virtually impossible in the UK.
The Devolution White Paper, like the NPPF, was another example of something that the Government could do which was politically uncontentious but would make a big difference. Sadly, what we’ve got lacks ambition.
To be clear, there’re lots of good stuff in the devolution White Paper. You’ll almost certainly have read about all the various powers being handed out, so I won’t reprise them here. It’s good stuff. It will help. I’m pleased.
My big complaint is what the white paper tells us about how the Government sees local authorities.
Fiscal devolution
First clue: there’s no fiscal devolution at all. Local authorities will remain dependent on taxes and settlements set by Westminster. Given we don’t have a devolution white paper along that frequently, this feels like a generational missed opportunity.
Now maybe the Government thinks that Britain’s got things right and everyone else has got it wrong. The Foreign Office have a consulting arm: maybe they’ll be selling workshops to other big countries about how to centralise all taxes so that local communities cannot buy their own projects and services. But, somehow, I doubt it. And if they don’t think it’s a good thing, why aren’t they fixing it?
The reason is that they don’t see local authorities as the political representatives of communities (in the way that they do see themselves as the political representative of the country). Instead, they see councils as administrative organisations delivering services defined by national Government. That’s why they don’t need to be able to raise money. Doing new things isn’t what they’re there for.
District councils
It’s also why the Government is happy to abolish the district councils.
This is hardly new: both the Tories and Labour have been abolishing district councils for thirty years. This simply finishes the job. But is it a good job? From a transport perspective, there’s a huge advantage. It’s terrible for transport policy to have highways and planning run by different tiers of local council, often under a different party from each other. This fixes that.
But should that mean that - as per the Government’s plan - all local authorities need to cover a population area of at least 500,000? I’m not sure it should.
The previous Transport Secretary, Louise Haigh, used to talk endlessly about Dijon, a city of a similar size to Canterbury. She’d highlight what an amazing job Dijon has done in creating an integrated, modern transport network for the people of Dijon. What she didn’t say is that, if Dijon were in Britain, the Government would be abolishing its council.
It was the Municipality of Dijon that created the plan for the integrated tram, bus and cycle system that the former Secretary of State so admired. The Municipality pulled the funding together. The Municipality let the operating contract. The Municipality provides the annual subsidy. That can happen in France.
Dijon City Hall. Canterbury, by contrast, will lose its city council.
Would Dijon have created its own integrated transport network in the future model envisaged by British government? Well, no. Because politically it wouldn’t have existed.
Had it been British, there would have been an Ouche Valley unitary authority. Maybe Ouche Valley would have created a Dijon integrated transport network but it would have been much more distant and remote, with Dijon representing around a quarter of the total population.
I don’t believe that the reason why cities like Canterbury don’t have French-style transport is because their city councils only serve one city. It’s because they don’t have French-style funding.
If the new unitary authorities are properly funded, then outcomes will be better. But you don’t need yet another organisational structure for that: you just need the funding. I suspect that Canterbury would do a better job of planning its own transport if the people doing it actually lived and worked in Canterbury. Doing it from Maidstone or Ashford, as is likely to be the case in future, will result in policy by model not experience.
The reality is that the Government doesn’t think it matters if places like Canterbury, Ashford, Thanet and the Folkestone are merged, even though they have very different characters and needs, as the Government sees them as passive implementers of policy. I know that’s not what the devolution white paper says they think, but it’s what their actions suggest they actually think.
The fact that the Government is happy to sweep away local authorities that bear some relationship with the communities in which people live and, instead, apply a rule that all councils must represent populations of at least 500,000 in the name of ‘efficiency’ is a clear indicator that the Government sees councils as administrative entities not political ones. Now, they are of course, right. That’s exactly what they’ve become after 40 years of centralisation. But I would have hoped that a devolution white paper would be the place to try to change this. Especially, as I wrote last week, reorganisations designed to increase efficiency often have the reverse effect.
More Mayors
While there are concerns about the devolution white paper, there are plans to build on the legacy of the last Government in expanding the concepts of Mayoralities from the city regional combined authorities into the new Strategic Authorities (aka shires) created by the mergers described above.
That’s good.
Last week, I was lucky enough to be asked to help facilitate the transport session of the Mayors’ Innovation Awayday. As well as running my session, I also got to hear the Mayors talking about health, inequality and the nature of their role. They were really impressive. Hearing Andy Burnham, Oliver Coppard, Tracy Brabin et al talking to each other about what they could do, you really got the sense of commitment, energy and purpose. The fact that I got to hear them in private made it all the more encouraging. I left the room with a sense that “if these are the people in charge, it’s gonna be OK”. I don’t know about you, but that’s not been such a familiar feeling recently.
More Mayors for more places will hopefully mean more empowered leaders committed to the success of their patches.
The Mayors at the Innovation Awayday I helped facilitate last week. I left feeling uplifted and encouraged.
Test and Learn
I’m also enormously encouraged by the Government’s Test and Learn programme. Announced by Pat McFadden last month, this is a quote from the press release:
Instead of writing more complicated policy papers and long strategy documents, the government will set teams a challenge and empower them to experiment, innovate and try new things.
Anyone who’s worked with me will know this is music to my ears. In fact, helping organisations achieve this is a big part of what I do in my day job (👋 if I can help you).
At the moment it’s a dedicated £100 million programme. It needs to become business-as-usual across Government, but this is a superb start.
Moreover, I get the sense that there is real ministerial commitment behind it. At a recent event, I asked the Secretary of State for Science, Innovation and Technology Peter Kyle how he thinks about the issue of failure in a political environment. Test and Learn only works if you accept the principle that some things will fail. That’s something political environments really struggle with. Now, it’s much easier to say than to do, but he said all the right things about owning the failure and not blaming officials. It’s very early days (and I have worries about whether the Treasury is as supportive) but the Peter Kyle <> Pat McFadden axis is really encouraging.
Transport policy - jury’s out
One curious thing about this review of the first six months is how much frenetic transport activity there has been, yet it’s very hard to say with confidence if any of it will lead to better outcomes.
We’ve had an unprecedented surge in transport bills going through Parliament, including bills to nationalise the railways and reregulate the buses.
I have a big worry, however, that the Government’s manifesto started and stopped with these measures. And as I’ve written about here (for railways) and here (for buses), these measures won’t actually improve anything for anyone. They give politicians more control but that has to be used.
London buses (in franchising mode) had an extraordinary period of growth from 2000 to 2006 when patronage went up by 40%. That was because the fleet went up 40%, the mileage of bus lane went up to 175 miles, the congestion charge was introduced and Oyster card rolled out. London buses have also had periods of decline. (They’re in one now). What is the Government’s plan to replicate London’s success of the first decade of the 21st century but on a national scale? There are some enormous questions left hanging: Rishi Sunak’s bequeathed an HS2 that doesn’t work for anyone. We know we need new rail capacity between the Midlands and Manchester; are we going to build it? We currently have pay-per-mile road user charging in the analogue form of fuel duty. Is road user charging going to replicate every other aspect of our lives and go digital? Are we going to see the massive investment in local and regional transport necessary to achieve the productivity growth in regions outside London that is the only genuine solution to Britain’s growth malaise (see this article for more on this critical topic)? Given the climate emergency, is the relative cost of rail, bus and car going to change? If not, how will we hit net zero, given that transport’s the only area of the economy to have seen no improvement since the 1990 benchmark?
So far we have a huge amount of activity in transport but very little positive change in the fundamentals.
There’s still Plenty of Time
Now, let me be absolutely clear what I’m saying in this post, and what I’m not saying.
I’m saying that, right now, I’m disappointed with what Labour have done compared to what I hoped for.
That’s not the same as saying that I think there’s anyone better out there. The Tories gave up meaningful Government long before they left office (as shown by their fictional, irresponsible spending plans) and certainly don’t show any sign of having changed. The Green Party is pro-railways but anti-building them and pro-green energy but anti-pylons. It’s not a responsible party of Government. And I’m not even going to mention Reform UK. Given the way the electoral maths work, the Lib Dems are, in effect, the Home Counties branch of the current Labour Government.
Moreover, we’ve 90% of this Parliament still to go.
I also notice that, despite this being a post about transport policy, my big complaints are all about an outcome of department other than the DfT. I already personally knew Heidi Alexander, Lilian Greenwood and Lord Hendy before any of them became ministers. They are all superb choices for their roles. That gives me faith.
But I really hope Labour finds a way of ensuring that actions across all departments are aligned to delivering the Government’s key outcomes, such as decarbonisation. It’s no good having a passionate Energy Secretary and a great Transport Secretary if the Chancellor can undermine all of their work with one stroke of her budget. They need consistency and focus.
They could call it Mission Government!
What do you think? Are you encouraged, disappointed or both?
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