Sector: Government Relations and Public Affairs

When it comes to Cabinet reshuffles, most politicians are well versed in the day’s proceedings. An anxious wait, a scurry to Number 10, a forced smile to the press – regardless of a promotion, demotion, or full-blown defenestration. As some ministers wait to know their fate, few would have woken up this morning and accurately guessed how the day would unfold. Before most had the chance to make a cup of coffee, Rishi Sunak had already rolled the dice on one of the greatest political gambles we’ve seen in recent years.

Westminster has been awash with reshuffle rumours since party conference season. With the Conservatives trailing heavily in the polls – and key events such as the Autumn Statement fast approaching – there was little doubt that Sunak would reshuffle his top team to prepare for the impending general election and once again attempt to reset his fortunes. Plus, with Suella Braverman’s controversial article in The Times critiquing the police without Number 10 approval, the Prime Minister seized his opportunity to stamp his authority on the government machine.

Braverman’s sacking would have no doubt stolen today’s broadsheet headlines if it weren’t for Sunak’s “dead cat strategy” – a Cabinet appointment leaving SW1 in total shock. Enter the stage – David Cameron. The former Prime Minister was this morning created a life peer in order to take up the position of Foreign Secretary, in an attempt to reclaim the centre ground from Labour.

The reshuffle of the great offices of state also raises serious policy dilemmas. The new Home Secretary, James Cleverly has publicly lobbied against Braverman’s decision to place 1,700 asylum seekers on the former RAF Wethersfield, a decision which will now fall under his remit – leaving the Government’s immigration policy here in a somewhat grey area. Meanwhile, only five weeks ago, Cameron was scathing in his criticism of Sunak’s decision to scrap HS2. Coupled with his own premiership denoting a period of closer ties between the UK and China – in stark contrast to this Government’s current position – most will watch with wonder as to how the Government will dutifully line up behind Sunak’s vision and reconcile its differences.

Elsewhere, Liz Truss’ ally and former Deputy Prime Minister Thérèse Coffey has been dismissed as Environment Secretary, while Conservative rising star Laura Trott has been appointed Chief Secretary to the Treasury. Victoria Atkins will be tasked with attempting to cut NHS waiting lists in her new position as Health Secretary, with Steve Barclay taking on the top job at DEFRA. This reshuffle has so far been characterised by bringing Sunak’s friends and allies closer into the tent, while promoting fresh faces that will likely play well in the pre-election media rounds.

As the week continues, we will expect to see further changes at the junior ministerial level. That said, we’ve already had multiple resignations from those who aren’t contesting the next general election– veteran Schools Minister Nick Gibb has left the DfE while Colchester MP Will Quince has stepped down as Minister of State for Health, having announced in the summer his intention not to seek re-election. For others, it presents the chance to refocus their attention onto an electoral footing, doubling down efforts to shore up their slim constituency majorities.

But there will be little chance to dwell on the changes that are being made. Next week’s Autumn Statement will bring home to ministers the challenging fiscal framework they now must work in – and while Chancellor Jeremy Hunt is safe for now, he will be fully aware his day of judgement will come next Wednesday at the despatch box.

The show must go on. Nervous waits will continue, while a few glasses will be raised in quiet celebration amongst those who have climbed the greasy pole. Yet few things in politics are certain – David Cameron’s return emphasises that political destinies are never straight forward, and the stage is constantly set for a triumphant encore, or a crippling opening night.

Authored by Ed Lavelle, Senior Account Manager, Public Affairs

Now that the dust has settled on party conference season, it would be remiss to say that FMCG policy was high up the agenda for either of the main two UK political parties. While HS2 dominated proceedings in Manchester, Labour Conference provided a platform for Kier Starmer to woo the business community during his Leader’s speech – albeit covered in (hopefully biodegradable) glitter. But there was very little by way of concrete policy for the sector to get its teeth into.

Perhaps it is to be expected that party conference season focuses on the big-ticket items for Sunak and Starmer as they seek to define their approach to the issues that will likely define the forthcoming election campaign – housing, energy, and transport, to name a few. Getting into the weeds of policies including Extended Producer Responsibility (EPR), Deposit Return Schemes (DRS), and restrictions to high in fat, salt and sugar (HFSS) products might not be too palatable for businesses or voters still navigating a cost-of-living crisis.

In fact, Rishi Sunak’s surprise move to ban smoking for the next generation was the closest either party got to outlining an approach to FMCG policy, and even this announcement was directly linked to easing the cost burden on the NHS. A cynic might even suggest this could be a ‘legacy’ policy for a Prime Minister firmly against the ropes.

But just how much is the decision to kick the can down the road damaging progress? Continued government delays to waste reforms have left businesses millions of pounds out of pocket, whilst Labour’s lack of clarity on recycling and HFSS policy makes it difficult for the FMCG sector to develop marketing strategies and plan investments.

To focus in on food, it has been six months since Henry Dimbleby quit his position as the UK’s food tsar amidst anger at a lack of strategy from the government on health and diet. Dimbleby, though, remains a formidable force, and following Conservative Conference, criticised the government’s decision to prioritise smoking regulation over the growing obesity crisis.

It wouldn’t be controversial to say there has been a lack of ambition to develop a coherent, collaborative approach to food policy, with the current government using the guise that any intervention will amount to ‘nanny-state’ politicking. For now, it seems the Conservative Party is keen to brush any policies that could increase the cost of the average shopping basket under the rug, to avoid the potential voter backlash.

On the other hand, the Labour Party signalled a more interventionist approach to tackling the obesity crisis and, at its conference, major retailers lined up to voice their support for mandatory targets and legislation to tackle unhealthy food – arguing that a voluntary approach isn’t going far enough.

While Labour’s shadow public health minister Preet Gill told conference a new ‘health mission delivery board’ would be established as part of a crackdown on HFSS sales and advertising, there remains very little – to pardon the pun – meat on the bones of Labour’s policy proposals. Labour will be aware that backing Dimbleby’s sweeping reforms could risk accusations of putting further strain on the pockets of consumers, and as such, the party remains paralysed on this issue – on the one hand pushing manufacturers to go further to reformulate, and on the other, avoiding saying, well, anything at all really.

So, what about waste and recycling reforms? Both EPR and DRS remain firmly on the backburner while businesses seek to understand exactly how the reforms will work together. Consistent household collections – or ‘seven bins’ – has been villainised by the Prime Minister himself, despite a similar policy proving hugely successful in Wales.

Given how divisive these reforms have become – with DRS becoming the first skirmish of the Internal Market Act – it seems unlikely that the technicalities of food and packaging packing policy will come into the limelight before the election. For Labour, a lack of resource in Shadow Ministerial teams may mean policy cannot be fully formed until, and if, the party gets into government.

But still, as parties’ wargame their election strategies, it is crucial to engage with influencers across the political sphere to outline the technicalities and genuine business impacts of policies impacting the sector.

On HFSS it seems likely we’ll see a change in direction to a more interventionist approach once any new government is in post and has got past the election hurdle, whereas packaging policy remains an open door ahead of DRS and EPR ‘go live’ dates in October 2025. But we know there’s an ambition to do more to boost recyclability and reform the waste system, so what will come next? It’s critical to engage now, to help shape and scope the debate, before the future direction of policy travel becomes too far set in stone.

Polling should always be taken with a pinch of salt, but it seems increasingly likely the UK will welcome its first Labour Government in 15 years – so don’t be slow to forge those relationships. With Starmer’s new-look Labour Party there is a legitimate opportunity for businesses to engage in the policymaking process, and to highlight to positive initiatives underway in the FMCG sector – whether promoting healthier options, low-and-no alcohol alternatives, or innovative packing formats.

At Grayling, our specialist FMCG team is well-versed in navigating this complex and volatile policy landscape. We are proud to help organisations:

• Target political influencers and media to highlight the need for a supportive policy framework.
• Navigate a complicated regulatory environment, identifying risks and opportunities on the horizon.
• Hero the positive consumer story to tell on sustainable diets and packaging, building brand affinity.

To speak with our dedicated FMCG team, please contact Michael Broughton via michael.broughton@grayling.com

As the curtain closes on Labour Party Conference 2023 – possibly the last before the next general election – we look at the key themes that businesses should take away.

Last year’s gathering took place against a backdrop of that Liz Truss Budget and a government on the verge of collapse. Labour’s lead in the polls was in ‘crushing landslide’ territory and, perhaps for the first time, there was a real sense of expectation rather than hope. The atmosphere was verging on giddy.

Labour Party Conference 2023 was last year’s older, more mature sibling. The watchword was ‘focus’. Rumours abound that the Shadow Cabinet, backbenchers and PPCs were under strict instructions to limit their refreshments and avoid any potentially compromising situations. It seemed to work; everyone was on their best behaviour.

The message discipline was impressive, and the extensive courting of business by Labour over the last year appeared to have paid off. Businesses were there in their droves, causing some members to mutter that the atmosphere was overly corporate. Senior Labour staffers didn’t mind, though. This was by far the most lucrative conference for the party in recent years, providing an important boost to the coffers ahead of the next election.

In response to the Prime Minister’s backtracking on net zero targets and HS2, shadow ministers confidently and consistently argued for policy stability above all, even if that means making some difficult calls such as not revoking recently awarded oil and gas licenses. In emphasising the economic arguments for ambitious and stable decarbonisation targets to drive private investment, Labour impressed businesses and avoided the trap that Rishi Sunak set last week.

Conference appeared to be a crystalising moment in Labour’s offer to business: we’ll provide the structures, policy certainty and stable government; we expect you to partner with us to drive significant investment. In a “third way” moment that would have made Tony Blair proud, Keir Starmer presented this in his speech as “not state control, not pure free markets…but a genuine partnership”.

The speech, while perhaps not delivered with the same verve and punch as last year’s, presented a clearer vision than we had previously heard from Starmer. That vision is taking shape around the idea of “national renewal”. The central premise of his argument is that the UK is broken and entering an “age of insecurity”, where the forces of technology, economic weakness, movement of people, and climate change combine to demand a remodelling of the British state after 13 years of Conservative neglect.

This is not “sunlit uplands” by any means, more a sober diagnosis of the significant challenges that can be overcome with hard work – and a warning to the party faithful and the country that change will not happen overnight. There was a strong feeling amongst delegates that Labour needs to not just win the next election but win big and govern for at least 10 years.

The big ticket policy in the hour that Starmer spoke had been announced by Shadow Chancellor Rachel Reeves the day before in her surprisingly tubthumping speech. Labour’s plans to radically overhaul the planning system for critical national infrastructure and building 1.5m new homes, including using development corporations to overcome barriers, sound bold and risky given how local objections can cause political headaches.

Alongside this, there was plenty for Labour’s core voters to get their teeth into, from VAT on private schools to the appointment of a Covid corruption commissioner. Naturally this wasn’t enough for some on the left of the party, who would have preferred less talk of fiscal discipline and more radical investment in public services.

But if the aim of the conference was to present the party as united, serious and ready to govern, then Starmer and his team will feel it is mission accomplished. However, while there was strictly no complacency from the party leadership, expectations of party members are running high. The pressure is now on to deliver the majority that they expect, for which winning in Scotland will be key. Anything less will surely be seen as an enormous missed opportunity.

To chat to the team about your organisation’s Public Affairs strategy, contact Alex Dismore at alex.dismore@grayling.com

The year is 2025. Out steps Chancellor Rachel Reeves through the famous door of Number 11 Downing Street – Budget box held proudly aloft – and her trusty team of Labour advisors celebrating the dawn of a new fiscal era. If the current polls are to be believed, it very much could happen.

The former Bank of England economist has enjoyed an impressive road to stardom having been appointed Shadow Chancellor in 2021 following a variety of shadow ministerial posts under Ed Miliband. PPE at Oxford was followd by a successful banking career, and Reeves now stands on the cusp of becoming the UK’s first ever female Chancellor of the Exchequer.

There’s no doubt that under the leadership of Keir Starmer, Labour’s approach to tax and spend has very much deviated from the radical approaches championed by his immediate predecessor. Both Reeves and Starmer have stressed the fiscal limitations which will constrain any future Labour government spending, while in opposition, Reeves’ iron grip in ensuring all policy announcements are fully costed has helped rebuild Labour’s position as a credible government in waiting, whilst also taking the wind out of the sails of the Conservative’s “party of business” moniker.

Under Reeves, Labour have embarked on two core economic missions. The first – and by far most challenging – securing the trust of the British public over control of the public purse. It’s no coincidence that Lisa Nandy, Wes Streeting and other big hitters within the Shadow Cabinet have been unable to unleash bold, expensive policy announcements in their media interviews – the hand of Reeves hovering over their shoulder and the message discipline of fiscal competence running through every vein of Labour policy making. Reeves has learnt the lesson which has scuppered many a Shadow Chancellor – that economic power can only be gained through public trust. And public trust can only be gained through disciplined spending promises.

The second core economic mission which Reeves has sought to drive in partnership with the party Leader is to position Labour’s fiscal priorities around those of the country. Borrowing to fund sustainable infrastructure projects, greater investment in the NHS and reforming the education system are all policy priorities which chime with the party’s core audience – the centre ground. The party hasn’t sought to tie itself in fiscal knots over issues about which it knows the electorate is not concerned – but has married spending priorities with the public consciousness – an approach which Reeves believes will result in electoral success.

Packaging Labour’s economic message into a simple, digestible, and – critically – electable summary however has been Reeves’ Achilles heel. While some may describe her economic position as closely aligned to the New Labour project, Starmer and Reeves have struggled to define their fiscal strategy in quite the same way. Reeves has unveiled that Labour’s economic policy will be branded under the umbrella term “securonomics”, focusing on economic security and the resilience of industry in an uncertain global economy. “It shows how an active, strategic, state will work in harmony with vibrant and open markets” said Reeves in Washington last month, yet for Labour it will be concerning that a rebrand of its economic strategy received limited coverage in the broadsheets, with many journalist being more interested in the Shadow Chancellor’s decision to fly in business class rather than economy.

For securonomics to work, Reeves understands that winning the war on the domestic battlefield is only part of the solution. The trip to Washington to meet with counterparts in the US has underpinned the Shadow Chancellor’s belief that garnering the support of international advocates is essential to persuading the UK electorate that she and Keir Starmer have the credibility for leadership – and that one time worries of capital flight and a crumbling pound under Labour are no longer rooted in political reality.

Yet what of Reeves’ personal appeal? Disappointingly for the Shadow Chancellor, her public popularity has struggled to take off in the way she may have hoped. Current YouGov projections place both her and Jeremy Hunt at 18% on “who would make the best Chancellor” with an enormous 65% of the sample unsure about their preferred choice. It may be unrealistic to expect Reeves to be as embedded in the public psyche as Gordon Brown was in 1997, but to be level pegging with a Chancellor who became infamous for fighting junior doctors, losing a Conservative leadership contest and needed his political life salvaged by Liz Truss, will be a bitter pill to swallow.

Ultimately, Rachel Reeves will be desperate to ensure Labour is not just the party of workers, but the party of enterprise. Partnering with private investors and building bridges with the City have been central to the Shadow Chancellor’s approach – recent roundtables with senior business leaders have not happened by accident. Business must feel a new sense of confidence engaging with Labour under the fiscal stewardship of Reeves – commercial objectives and Labour policy now working in harmony to deliver outcomes, no longer the polarising forces they once were.

If you want to hear more about Labour’s economic policies and what they will mean for your business, please get in touch with our Corporate Affairs Team.

Report on legislative changes across the CEE region in 2022

• Eight CEE countries adopted 1,437 laws in 2022 – a 14% increase compared to pre-pandemic levels
• On average, almost 50% of laws had a direct impact on businesses

Almost 1,500 laws were adopted by the eight countries in Central and Eastern Europe, as shown by the AcTrend Report conducted by Grayling, the communications and government relations consultancy.

The report analysed legislative changes taking place in Romania, Bulgaria, Serbia, Hungary, Poland, Czechia, Slovakia and Croatia between January 1, 2022 – December 31, 2022.  Romania led in quantitative terms with more than one third (573) of the total number of laws, followed by Poland with 189 acts of primary legislation, Slovakia – 176 and Croatia – 158. At the opposite end are Serbia (60) and Hungary (83).

Compared to the figures from 2013-2017 there has been a 14% increase in the number of laws adopted by CEE countries in 2022. This can be reasoned by the fact that both post-covid recovery and the start of the Ukraine war motivated local legislators to adopt a larger number of acts governing both business and general environment.

The comparison between the number of laws adopted by extraordinary procedures, compared to regular ones, highlight 24.9% of the total number of laws adopted were passed by an extraordinary procedure – this number being higher for acts with direct impact on business (38.95%).

On average, 46.5% of laws had a direct impact on businesses, a result similar to pre-pandemic levels. Almost half of the adopted laws that had direct impact on the businesses covered general business topics (43.85%), while most affected sectors were services (13.59%) and finance (10.3%).

Centralisation of the legislative power into the hands of the Governments was especially noted in the case of legislation impacting businesses, as all analysed countries had less than 20% of acts, with an impact on business submitted by MPs in 2022. In Croatia, Hungary and Serbia none of the acts impacting businesses in previous year were submitted by MPs. Compared to pre-pandemic levels the number of legislative acts with an impact on business submitted by MPs halved in 2022.

The complete Grayling AcTrend 2022 report, with detailed information about number of laws adopted in specific countries, sectoral distribution and other relevant local specifics may be found here.