Expert: Graham Hook, Head of UK Government Relations and Public Policy, Invesco Facilitator: Pan Andreas, Independent Consultant
Headlines:
- Despite Labour's large polling lead, a hung parliament is still possible given the scale of swing needed for a majority
- If Labour wins, we can expect to see policy proposals on economic 'securonomics', green investment, industrial strategy, planning reforms and workers’ rights
- To fund infrastructure and industrial strategy, Labour would likely revive private finance models while incentivising pension funds to invest more in UK assets, though directives could threaten fiduciary duties.
Context:
This session discussed the implications of a potential Labour government coming into power in the UK after the next general election, by analysing Labour's current policy proposals, fiscal constraints, approach to industrial strategy, plans for closer EU relations and risks for the financial sector.
When it comes to Labour’s policy and fiscal context, there will be significant fiscal constraints from high debt, spending pressures and limited tax rises currently pledged.
Their approach to industrial strategy focuses on green energy but the details are lacking in other sectors. With limited public funding, they will likely want to leverage a National Wealth Fund and private co-investment.
With the resetting of relations with the EU, Labour will seek closer ties with the EU based around a security pact, though single market or customs union membership remains off the table. But EU enthusiasm for renegotiation post-Brexit is limited.
Key takeaways:
- Potential opportunities will be found in the form of infrastructure investment incentives
- The risks will be around more radical policy shifts, erosion of investment safeguards and re-emergence of hard left factions within Labour
