A year ago today, the Prime Minister gave a speech on the ‘fundamental reform of the British state’. ‘We don’t want a bigger state, or an intrusive state, an ever-expanding state,’ he declared. ‘We were elected to take on blockers and deliver change, and that is what we’ll do.’ On this momentous anniversary, let us take stock of the progress of Sir Keir’s quest to take on the checkers and blockers.
Back when Starmer delivered the speech last March, the portents already looked inauspicious. Despite indicating that he would like to reduce the power of quangos, it was revealed that the new Labour government had overseen the creation of at least twenty new public bodies in their first eight months in power. While the Prime Minister announced the abolition of NHS England, Britain’s largest quango, the legislation required to implement this isn’t expected until 2027.
Meanwhile, the administrative and regulatory state continues to grow. It is harder to think of a better designed barrier to growth than the Employment Rights Act (ERA). Championed by Angela Rayner, the ERA places several additional obligations on beleaguered employers ranging from increased probation periods to mandatory diversity disclosures. The government’s own impact assessment estimates the provisions will cost business £1 billion per year, revised down from a cautious £5 billion. The Chartered Institute of Personnel and Development has found that more than a third of British employers are already planning to hire fewer staff because of the Act, as increased bureaucracy and hiring costs bite.
Perhaps then, the public and press simply misunderstood Sir Keir’s speech
Often overlooked, the ERA will also give trade unions the legal right to access private workplaces to facilitate collective bargaining, regardless of whether employees are interested or not. This includes digital communications, meaning that a state-backed union rep will have some degree of access to the internal communications of private companies. Perhaps Sir Keir taking on the blockers meant the things preventing the complete management of the economy by the state.
The ERA also creates several new quangos, including the Fair Work Agency – designed to enforce all the new obligations created in the Act, as well as new pay-negotiating bodies for social care workers and school support staff. The Adult Social Care Negotiating Body seems particularly troubling, as it will require social care providers to implement fair pay agreements with staff.
Given that providers are unlikely to be able to recoup these costs through their business, they will likely pass them on in the form of higher fees, to the great detriment of social care self-funders and local councils who outsource to them. With many English councils spending on average 78 per cent of their core funding on social care, council tax rises are all but inevitable. It is entirely plausible that the government’s plans will lead to some issuing section 114 notices as they struggle with increased costs – effectively declaring bankruptcy.
Not content with employment, the government has decided that property rights are another impediment to their vision of state reform. The Renters’ Rights Act will ban no-fault evictions and rental bidding in England, while allowing tenants to take landlords to court if they deem rent increases to be above market rates. Having decided that the ‘market’ in market rates is superfluous, Starmer may be surprised when rental housing supply contracts as landlords rush to exit the market.
All of this may seem remarkable from a prime minister who pledged in his inaugural speech on the steps of Downing Street to ‘tread more lightly’ on our lives. But when we remember that Starmer kicked off his premiership with the promise of ‘mission-led government’, it is hardly surprising that the legislative agenda of this arch-managerialist has revolved around increasing the power and reach of the state.
Upcoming legislation continues to follow this theme. The public can still look forward to ominous provisions in the Pensions Schemes Bill giving the government the power to decide how your pension is invested, effectively creating a captive capital pool to fund future state white elephants. The scrapping of jury trials puts greater power in the hands of magistrates at the expense of people having a voice in their own justice system.
Even when the Prime Minister is actively surrendering British territory, he still manages to create additional obligations for the British state. After all, under the terms of the Chagos treaty, the British government will be responsible for setting up a marine protected area jointly with Mauritius. Three quangos are currently responsible for managing British marine protected areas. Will this new arrangement provide justification for a fourth?
Of course, the Prime Minister could not do this alone. Despite Labour whispers that ‘Cummings was right’ about the woeful state of the public sector and growing dissatisfaction with Whitehall among Labour backbenchers, the parliamentary party has dutifully continued to march through the voting lobby, continually approving expansive legislation. The major rebellions have only occurred in instances where the government considered reducing public expenditure, such as on welfare or the winter fuel allowance.
Perhaps then, the public and press simply misunderstood Sir Keir’s speech from a year ago, mistakenly equating cutting bureaucracy and restoring political accountability with a vision for a leaner, less intrusive state. The PM is certainly pushing forwards with his fundamental reform of the British state, just not in the right direction.
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