One step forward…
Workplace Thought Leadership Team | July 27, 2021
Time to read: 4 minutes
One step forward…
There have been three significant by-elections over the last few months: Hartlepool, Batley and Spen, and Chesham and Amersham. The most significant result was Hartlepool, long considered a safe Labour stronghold, which was won by the Conservative candidate Jill Mortimer by nearly 7,000 votes, a 16% swing from the 2019 election. Labour’s loss of Hartlepool is the most dramatic illustration yet that the party has failed to connect with the Leave-supporting, working class voters they lost heavily in 2017 and 2019. In contrast, it indicates that the Conservative’s focus on the ‘red wall’ and towns that swayed heavily towards Leave voters in the Brexit referendum, continues to work and benefit them strongly.
This significant step forward, however, has been somewhat blunted by the results of Batley and Spen, held by Labour candidate Kim Leadbeater (sister to the murdered former MP Jo Cox) by the smallest of margins (323 votes). In addition, Chesham and Amersham was gained by the Lib Dem candidate Sarah Green who overturned a 16,000 Conservative majority. Some, including many Conservatives, attribute the win to a backlash against the planned HS2 development through the constituency, among other local issues.
The results indicate the fine margins the current Government is treading – appealing to heartland voters who have previously leant towards Leave, whilst potentially putting at risk safe seats in the Home Counties.
… & One Step Back
Whilst the by-elections can be viewed as a positive for Conservative hopes of maintaining its majority in the next election, the resignation of former health secretary, Matt Hancock, for having an affair with his adviser heaped much criticism on the Government. Some commentators suggested that the revelation had a direct influence on the tightly contested Batley and Spen result.
The scandal was one step too far for Hancock who, despite being endorsed by the Prime Minister, was forced to step down. His replacement, former chancellor, Sajid Javid, has a firm support base in No.10 – from Carrie Symonds – and is a further entrenchment of the ‘back to basics’ approach to governing we’ve seen over the last seven months since the departure of Dominic Cummings. His arrival also signals a shift from Hancock’s cautious approach to easing restrictions, to an economy-focused response as illustrated by the decision to proceed as planned with ‘Freedom Day’ in England on 19 July.
The high-profile June summit in Cornwall was the first chance for Boris Johnson to capitalise on a big year for his ‘global Britain’ ambitions. The overriding sentiment following the meeting was one of relief, but also of missed opportunities. Relief in the sense that President Biden is once again bringing the US back to the table as a global leader after 4 years of indifference. But this was tempered by disappointment with the global vaccination programme, which many commentators feel does not go far enough.
Climate change was, not surprisingly, a key focus for the summit and the continued efforts of the insurance and long-term savings industry to address the issue were in evidence again recently, with the ABI announcing its Climate Change Roadmap. Our CEO, Andy Briggs, chairs the ABI’s climate committee and was delighted to be a keynote speaker at its net-zero conference on 7 July where the Roadmap was launched. The industry has now committed to a 50% reduction in greenhouse gas emissions by 2030, and to fully decarbonise by 2050. ABI’s research shows that insurers could contribute up to one-third of the investment (equivalent to £900bn) needed for the UK to meet its climate targets, subject to an appropriate regulatory framework, including reform of the Solvency II capital regime for insurers.
The Future Financial Landscape
In his first Mansion House speech, the Chancellor, Rishi Sunak, set out how UK financial services can create prosperity at home, and project British values of openness abroad in the future. His speech followed the Governor of the Bank of England who told the audience that the Bank was not “whistling in the wind” on inflation and that the expected sharp growth in prices was only likely to be temporary.
Sunak’s speech focused on the future of the UK as an independent global financial centre. He outlined plans to incentivise companies to consider their climate impact; a new sustainable investment label (a quality stamp) so that consumers can clearly compare the impacts and sustainability of their investments for the first time; hinted towards what sort of projects will be eligible for funding through the new green gilts to be issued in September; and also launched new consultations looking at access to cash, reforms of the wholesale capital market, and a fundamental review of the prospectus regime following the Lord Hill Review into the UK Listings rules.
Following these consultations, the second half of the year may give us the clearest indication yet of the changes coming to the City and the wider financial services sector following the UK’s departure from the EU.
Online Safety Bill
The Government recently confirmed that it has rejected the Work and Pension Committee’s recommendation that the forthcoming Online Safety Bill (OSB) should tackle fraud facilitated through paid-for advertising, such as adverts for pension products on search engines. Instead, the Government announced it would consult later this year on online advertising regulated through its Online Advertising Programme.
In contrast to the Government’s position, the FCA has warned that online advertising is ‘the major source of problems leading to very significant consumer harms’, and backed calls for financial harms to be included in the legislation – figures suggest over £2 million has been lost to pension scams in the last five months alone. Phoenix’s own research has shown that scammers are increasingly turning to social media, and that almost three in ten victims were aged 18 to 34, compared to 17% of the overall population. Phoenix has written to the Department of Work and Pensions calling on them to take action in the OSB, and will work closely with the wider industry, the regulator, and Government to push forward these changes at the earliest opportunity.