Next month’s budget will be an opportunity to see the extent to which the Government is prepared to use its large majority to take contentious and potentially unpopular decisions, as well as the first hints of ideological tensions among Conservative MPs who have largely been united behind Johnson and his team to date. We have begun to see these tensions come to the surface this week. Top of the list – and relatively uncontroversial among Conservatives – is the abolition of entrepreneur’s relief. Some in government are known to be keen to drop pensions tax relief for higher earners, but this is likely to meet with resistance from some Conservative MPs. Similarly, mooted plans to increase fuel duty have already been criticised by some of Johnson’s parliamentary colleagues, but Ministers are keen to find tax increases that address some of the criticisms levelled at them by the likes of the Institute for Fiscal Studies this week and meet some of the Government’s wider policy goals, particularly on high-profile issues like climate change.
DfE confirms SME access to digital apprenticeship system
The Department for Education has confirmed that it intends small and medium-sized businesses to have access to the digital apprenticeship system from 1st November. The delay in gaining access – SMEs had previously expected this in April 2019 – has meant that while employers paying the apprenticeship levy have been using the new system, SMEs have still relied on provider funding allocations made by the Education and Skills Funding Agency (ESFA) through a procurement process. While the transition for SMEs to the new system started earlier this year, a dual system of access to the online system and existing ESFA contracts remains in place until the beginning of November, with those contracts being extended into the new financial year where necessary. Providers engaging with the SME market should be prepared for this change over the course of the year.
The state of Labour’s leadership race
Faced with an electorate that remains largely committed to the core tenets of the Corbyn project, none of the Labour leadership candidates has been able to move decisively away from the key policies in the 2019 manifesto as they debate the party’s future. While Rebecca Long-Bailey is often presented as the ‘continuity’ candidate, Keir Starmer and Lisa Nandy are also reluctant to deviate from the party’s existing policy platform. Should he win as expected, Starmer is likely eventually to adopt an agenda that more closely resembles that of Ed Miliband’s leadership, trying not to lose all Corbyn’s radicalism while softening some of its edges for sceptical voters. This is supported by Westminster rumours that Starmer wants to offer Miliband a prominent post in his team, possibly as Shadow Chancellor, in a move reminiscent of David Cameron appointing William Hague to the Conservative frontbench in opposition. Whichever candidate is victorious, many policies – from restricting private provision in the NHS to public ownership of rail – are likely to endure, at least in the short term.
Jamie Cater, the brains behind a lot of GK’s thinking, leads our policy work across the entire business, supporting our strategic communications work and providing strategic advice to investors during M&A activity.