Looking through the Labour Party Manifesto I found clear evidence that the contribution we have been making to the policy process has had an effect.
I was struck by this paragraph on international trade:
“Labour will use the full range of export credit, finance, insurance and trade promotion tools to boost British exports and support priority industrial sectors.”
My submission to the Economy Commission before the election included this:
“We need to see trade policy as wider than just trade deals. Governments invest in export promotion as part of their business support services – providing finance and guarantees, trade delegations, advice to SMEs and trade officials in embassies and consulates. … The mission for export promotion should include the development of overseas markets for higher productivity economic activities in support of the industrial strategy.
(That submission was made in my name; however, it was originally drafted for discussion in LI to form an LI submission. When the election was called and the timetable for producing the Manifesto became short we were not able to consult and so I couldn’t claim it was the position of the CLP.)
The previous paragraphs in the submission explain the logic of this position. So, although my version is more long winded, I think we can count that as a success.
I also called for “a review all the trade promotion activities to ensure their coherence and effectiveness.” While that is not there the Manifesto does propose a White Paper on Trade.
Regional Development Banks
I have looked at the Manifesto in the light of the submission we made as LI last year and again we can see our ideas being taken up. A national investment bank was not a new idea then but we asked for clarification on whether it would finance infrastructure or private sector investment. “Given that arrangements already exist to create infrastructure, then in order to make the case for change it is necessary to identify the benefits of creating new institutions. Funding private sector investment is a more obvious need.” The Manifesto shifts infrastructure investment to a new National Transformation Fund and make private sector investment the role of the NIB.
One new idea was this:
“We would argue that the national investment bank should be the hub for a network of “regional development banks” with a mission to support investment in the regions and nations of the UK.”
The Manifesto says, about the NIB:
“This new public institution will support a network of regional development banks that, unlike giant City of London firms, will be dedicated to supporting inclusive growth in their communities. The banks will deliver the finance that our small businesses, co-operatives and innovative projects need across the whole country. The National Investment Bank will fill existing gaps in lending by private banks, particularly to small businesses, and by providing patient, long-term finance to R&D-intensive investments.”
Our vision for regional development banks also included cooperatives and innovative firms:
“RDBs should develop expertise in supporting cooperatives, social businesses and other forms of mutual enterprise, in partnership with existing agencies.
“RDBs should join or facilitate “innovation partnerships” together universities and other research centres, and their clients.”
The Manifesto says:
“When shareholders are looking for quick short-term returns, they encourage companies to cut corners. That means they look to cut wages, instead of investing for the long term, or they spend longer inventing new tax avoidance schemes than they do inventing new products.
“By reforming the rules our companies operate under, we can make sure they stay focused on delivering shared wealth. Labour will amend company law so that directors owe a duty directly not only shareholders, but to employees, customers, the environment and the wider public, and we will consult on bringing forward appropriate legislation within this Parliament.”
Which meets much of what we were asking for:
“Policies to encourage business investment should begin from reform of corporate governance and company law. … In reforming company law measures which incentivise “patient capital” should be part of the mix. For example, company boards should include stakeholders, such as their own workers, who have an interest in the long term performance of the business. Stakeholders could include employees, representatives of communities and perhaps of “regional development banks” and innovation partners.”
Finance sector reform
As LI representative on the NPF, I have pushed on other issues. I have been very keen to ensure that the reform of the finance sector is not forgotten, at a time when Brexit seems to overshadow everything else. In the last session of the NPF economy commission before the manifesto was drawn up I argued,
“Labour should commit to continuing reform to eliminate the risk to stability which an overactive finance sector can pose and give us the kind of financial services which support the productive economy. Alongside raising capital requirements, separating “utility” and “speculative” activities, we need levies on financial transactions, similar to stamp duty on share-dealing, to reduce the purely speculative activities which make money for some participants but add little to economic welfare.”
The Manifesto has not forgotten the need for reform:
“Labour will overhaul the regulation of our financial system, putting in place a firm ring-fence between investment and retail banking that will protect consumers. … And we will extend existing Stamp Duty Reserve Tax to cover a wider range of assets, ensuring that the public gets a fairer share of financial system profits.”
I know this is only a few paragraphs from a long Manifesto and in each case we were not the only ones thinking on these lines. However, I think we can take this as confirmation that members can influence policy and that we should continue to develop the ability of LI to contribute to policymaking, through the NPF, its annual consultation exercise and the Party’s Annual Conference.