Rishi Sunak called the election in the pouring rain and it looks like Keir Starmer will walk up Downing Street in similar sodden conditions later this afternoon. But make no mistake, the political weather has been transformed.
Labour’s victory is nothing short of staggering, securing a majority of more than 170 while redrawing the political map across the UK. Addressing jubilant supporters this morning, the man who will become Britain’s fourth Prime Minister in two years spoke of “the sunlight of hope… shining once again.” He shall meet the King later today before heading to No 10 from where he will address the nation and, crucially, start putting together his government.
After 14 years in power, the Conservatives have crumbled to just 119 MPs, suffering around 250 losses including such senior figures as Liz Truss, Grant Shapps and Jacob Rees-Mogg. Rishi Sunak managed to hold his Yorkshire seat, but he says he takes responsibility for his party’s calamitous defeat. He will almost certainly announce his resignation as leader of the Tory party later today, but he may in fact stay in the role for weeks or even months as senior Conservatives plot the process and timings by which they will search for a new leader. They may not have suffered the wipeout some polls predicted (there was talk yesterday of the party falling to fewer than 70 MPs) but it’s not much of a silver lining. The battle for the future of the Conservative party – and of the political right in Britain – is just beginning.
A dramatic night at the polls also saw a surge in Liberal Democrat MPs, with Sir Ed Davey picking up at least 63 new colleagues. They will become a substantial political presence in Westminster once again, comfortably the third largest party. The SNP has lost nearly 40 MPs and Nigel Farage will take up a seat in Parliament, flanked by three other Reform UK MPs. There will also be a larger than usual number of independent MPs, including Jeremy Corbyn who managed to hold off the Labour tide in Islington North.
But the story of the night – and the story of the months ahead – is all about Labour. Starmer has taken his party from the depths of defeat in 2019 to the giddy heights of total victory in just five years. It’s true that he benefited hugely from the collapse in support for the Conservatives, and from the fracturing of the Tory vote, but his achievement should be recognised for what it is; a political tsunami.
Cabinet positions may become clear towards the end of the day while a host of ministerial appointments will take place over the weekend. The new Parliament – full of new faces – will meet for the first time on Tuesday, with the formal State Opening set for July 17, when the new government’s legislative agenda for the year ahead will be outlined.
The Labour campaign has been criticised by many for being light on detail, but as of today, there’s nowhere to hide. This is now Starmer’s Britain; let’s see what he makes of it.
The intensity of the snap election campaign risked masking the significance of what was about to happen. With the polls close to accurate, the night belonged to Labour.
The UK has had a Conservative Prime Minister since 2010 and a majority Conservative government since 2015. The Labour Party hasn’t won a general election since 2005, under Tony Blair. In that context, the change that last night’s results could yield are set to be truly seismic.
It’s now certain that everything will change. The government, Parliament, the House of Lords and our wider constitutional settlement will now change. One way or another, our economy will also change – as will our relationships abroad and the political priorities at home.
A consequence of Labour’s impressively disciplined campaign was the surprising lack of detail about how they intend to govern and what exactly they intend to do beyond the “first steps” they announced. For businesses of all sizes and across all sectors, there will be an urgent necessity to understand the scale and impact of the change that will result from last night’s results.
At Hawthorn Advisors, our experts are ready to help you navigate the consequences, risks, and opportunities of this change.
What we offer:
UK will have a new Government and a new Parliament, and Hawthorn’s political advisory team is ready to help you engage with this new world:
Engagement strategy with new MPs
Hawthorn political check-in
Hawthorn’s new Parliament guide
Parliamentary and government messaging
Party conference concierge package
Political risk, audit and opportunity report – the Hawthorn ‘sense check’
With just over a week until the country votes, it’s worth reflecting on what – if anything – we’ve learned from the past few weeks of campaigning. The polls have hardly altered since the Prime Minister called the election, despite confident predictions that they would narrow as the campaign wore on. This forecast, a staple among commentators and not unvoiced even at Hawthorn, was based on the normally safe assumption that the electorate starts to pay attention and the parties run effective, smart campaigns. With regards to the former, it’s now clear the electorate made up its mind long ago and as for the latter, the campaigns have been notable only for the absurdities dogging the Conservatives and the timidity (or rigid discipline) of Labour’s efforts.
Future generations of politicians can look back on this period and conclude that you shouldn’t launch a campaign in the pouring rain; that Prime Ministers shouldn’t skip out early from international commemorations; that candidates shouldn’t bet on elections; that struggling campaigns shouldn’t hold photo calls in front of the Titanic; and that it’s tough to pose as tax-cutters-in-waiting having spent years hiking the levies to record highs. They might also conclude from close observations of the Labour campaign that, while saying as little as possible is a smart way for an opposition to get over the line against an unpopular incumbent, it surely stores up trouble for life in government.
Labour’s central (and winning) argument is that it’s time for change. From what to what? From chaos to… less chaos? To be fair, from Corbyn to not Corbyn is also a large part of Labour’s pitch. Nowhere has this transformation in attitude and approach been more apparent than in Labour’s new relationship with business. The party is now, we’re told, the natural home of wealth creators; the party of business. Shadow Chancellor Rachel Reeves and others have been singing this tune for months, just slightly louder in recent weeks. The business community has largely welcomed the reassurance from a party almost certain to form the next government, but the lack of detail hangs over this courtship.
Addressing business leaders at a Bloomberg event earlier this week, Shadow Business Secretary Jonathan Reynolds opened his pitch to the room by saying “I can think of no reason why the Conservatives deserve another five years in office.” Many in the room would have agreed with the sentiment, but he was remarkably light on detail when it came to questions about how exactly a Labour government would run the economy and manage relationships with employers. The spectre of tax rises does not disappear just because Labour says they have “no plans” to raise them.
His opponent in that debate was Business Secretary Kemi Badenoch, one of several Tory MPs already being talked about as a potential Leader of the Opposition. In last week’s Headliner we looked at what life might be like for the Conservatives post-defeat, and this week we can report that the latest internal Tory party polling shows fewer than 100 of their MPs being returned. While Labour can hit the ground running with their “missions” and “first steps” well trailed, the Conservatives will spend months trying to figure out who they are, who they’re for, who should lead them and, crucially, what should be done about Nigel Farage?
It seems certain that next week’s vote will bring down the curtain on 14 years of Conservative government, but there the certainty ends. What exactly will a Labour government look like? We’re about to find out.
As Defence Secretary, Grant Shapps could be expected to know a thing or two about military realities. Perhaps this is why he appeared to concede defeat in the General Election, describing a Tory victory as “unlikely.” As rallying cries go, it wasn’t exactly “we shall fight them on the beaches” from General Shapps.
The Conservative campaign is now saying publicly what they’ve long known privately; that Labour is on course to win – and win big. Defeat is one thing, but to have a once mighty army reduced to just a handful of troops while a victorious enemy parades through conquered territory would be the ultimate humiliation. Indeed, the Conservatives may have so few MPs left that His Majesty’s Loyal Opposition might resemble more a scrapy band of resistance fighters.
But who would lead such an outfit? Mr Doom and Gloom himself, Grant Shapps, is apparently positioning himself as an “energetic unifier” but the polls suggest he’ll be a casualty of Labour’s ground war. Robert Jenrick, one of the less subtle MPs on maneuvers, is facing a similar battle in his seat – as is the toast of the Navy’s officer class, Penny Mordaunt. That leaves James Cleverly, Tom Tugendhat, Kemi Badenoch, and Priti Patel free to plan their next moves, relatively safe in the knowledge that their voter base should hold off Labour’s advance. But a huge amount remains uncertain, and unknowable.
Tory MPs jostling for the leadership don’t even know which of their current colleagues will still be standing after July 4th, and the party membership – that body of activists that backed Boris Johnson and Liz Truss – is an unpredictable lot. Will they seek a right-wing figure, someone who could do business with Nigel Farage? Or might they succumb to one of their occasional bursts of pragmatism, as was on display when they picked the fresh-faced ‘change’ candidate of David Cameron? In other words, might we see a hitherto unacknowledged or underappreciated candidate rise from the ashes? And will they lead a band of 150 MPs, or 80?
The nature of the opposition matters, as does its calibre and effectiveness. If Keir Starmer stands up as Prime Minister with a majority north of 200, he will have achieved a kind of parliamentary imperium. Against such odds, the vital work of challenge and scrutiny will be difficult and thankless. At the same time, any new Tory leader will have to start out on a long road to recovery, devoid of hundreds of councilors, wary of Farge, battered by defeat and exhausted after 14 years of government – with the latter years characterised by civil war and strife.
The travails of the Tory party would be merely an entertaining sideshow as far as Labour is concerned. There’s no reason to disbelieve Starmer when he says he wants to change the country, and if the polls are correct, he’ll have not just the mandate but the muscle to do so.
One of the most senior political journalists in the country tells us that “the Tories really are facing an absolute catastrophe,” adding, for good measure “they’re f**ked.” If that turns out to be true, one of the few Conservatives left standing will have to pick up the fallen banners, gather the surviving troops and march them into one of the most frustrating, thankless, and dispiriting voids of British politics: the Opposition trenches.
The Conservatives have unveiled a “Jeremy Corbyn style” manifesto, according to the Labour leader Sir Keir Starmer. That’s a sentence that sums up the unusual state of British politics, just three weeks out from polling day.
Starmer didn’t make the comparison as a compliment, despite having campaigned for his predecessor’s agenda just a few short years ago. Instead, he knows all too well that the public considered Corbyn’s pledges unbelievable, in the literal sense, and he’s keen to paint the latest Tory promises with the same brush.
Rishi Sunak maintains that yesterday’s commitments on future tax cuts are fully costed and eminently achievable, but it isn’t just a question of credibility. When a party that’s been in power for 14 years unveils a catalogue of great new ideas, the public is entitled to question why they haven’t done any of them already. Immigration controls? The figures are at a record high. Tax cuts? The burden is at a record high. House building? NHS reform? Higher defence spending? The same natural reaction greets all such pledges; you’ve had your chance.
For the Conservatives, there’s another problem in the mix. The measures contained in the manifesto are individually popular but there’s no evidence of them resuscitating the party’s dire poll rating. Why? Because the party is unpopular, as is its leader. This is where Starmer’s Corbyn comparison makes sense. His predecessor’s policies were popular. Remember the promise of free broadband for everyone? But when taken together and considered alongside the man making the promises and the party poised to deliver them, the voters recoiled.
Manifestos can be funny things. Michael Foot’s 1983 Labour manifesto was dubbed “the longest suicide note in history” – while in 2010 the Conservatives launched “an invitation to join the government of Great Britain” – but the RSVPs were sufficiently lukewarm to result in a hung parliament and a coalition government. Theresa May’s 2017 manifesto for the Conservatives was too clever by half, or too honest, and derailed her campaign once voters got spooked by the reality of her social care plan. As for the Boris Johnson manifesto of 2019, it was blown up by Covid then dumped by his successors in No 10.
So why bother with them at all? Do they change minds? Do parties regret being held to account? Why do they campaign in poetry if they know they’ll have to govern in prose?
The truth is that these set-piece campaign moments do at least allow parties to command attention for a day (one senior Tory campaign source tells us that they need the manifesto to help “move on” from Rishi Sunak’s disastrous D-Day debacle) and we should concede that it’s probably sensible for politicians to set out in detail what they’d do in office.
Labour will reveal their manifesto tomorrow, building on the various “missions” and “steps” they’ve already announced. The document is unlikely to contain many fireworks and will probably be more about offering detail on the pledges they’ve already made. Labour’s approach to the election has been described as a Ming vase strategy; tread carefully, don’t break it. One party insider tells us that “people are taking ‘change’ as the instruction and inspiration” adding that “the ‘don’t knows’ are breaking for Labour.” In this context, they don’t want a manifesto that spooks the very voters they’re trying to lure with promises of competence and stability.
In truth, what’s left out of the Labour manifesto will be just as interesting as what makes it in. There is a growing expectation that a Starmer government would set about raising a variety of taxes – including Capital Gains Tax – once in office, and that isn’t a policy you’d expect to see written down.
It would be too cynical to describe party manifestos as merely decorative, but it would be a stretch to consider them a binding contract.
In February 2024 Meta announced that it would be rolling out a suite of AI detection tools. As Meta explained in its newsroom, as AI-powered content generation tools get more sophisticated, it’s becoming harder for consumers of content to tell the difference between what’s been generated by AI and what has not. By clearly and correctly labelling content which is created using AI, Meta hopes to build user trust.
Since AI tools became cheap, user friendly and easily accessible, there has been a well-documented rise in public scepticism and mistrust. Fake news and deepfakes making their way into public consciousness. Research published in August 2023 suggested that 30% of the global population was aware of the concept of deepfakes. The same research conducted a year earlier found only 13% knew what the word meant. As this interesting thought-piece from the European Parliament suggests “Simply knowing that deepfakes exist can be enough to undermine our confidence in all media representations, and make us doubt the authenticity of everything we see and hear online.”
Undermined Confidence
It’s this ‘undermined confidence’ in platforms which Meta is trying to address with its AI detection labels. But getting the labelling right is harder than Meta imagined. It’s easy for Meta to detect AI generated content created using its own software, but now there are thousands of different AI tools out there used either to create images and videos from scratch or manipulate existing visuals. In the last few weeks content creators on Instagram and Facebook have noticed many of their photographs and videos had been mislabelled by Meta as ‘Made with AI’, when they weren’t. Expectedly, there’s been an uproar, with some influencers going so far as to boycott Instagram.
Here’s why Meta’s probably struggling to get the label right. To properly detect if an image has been created by AI, detection programmes can’t rely on the “look” of an image. Detection relies on programs to be able to read metadata or invisible markers which are embedded within the file. What we hope, is that software like Dall-E, Midjourney and others all embed some metadata into AI generated content to mark it as such. However, there is no government legislation or industry standard – thus far – which makes the embedding of this metadata or AI markers mandatory.
Dangerous Assumptions
Regulation is being spoken about. The EU AI Act, for example, prescribes some stringent record keeping and logging of materials produced by high-risk AI applications. But how these regulations are adopted and enforced is still to be seen. For now, tech companies seem to be moving quicker than regulation is and doing their own thing.
Meta claims to be developing its AI detection standards alongside other industry players like Google, OpenAI, Microsoft, Adobe, Midjourney, and Shutterstock. What Meta assumes, and needs, for its detection programme to be successful is that other industry players will comply. It also assumes tech companies will act in good faith, and all agree on the ethics of disclosure. Which is a big, and dangerous assumption to make.
Meta’s mislabelling of content seems to have exposed the problem. As a Meta spokesperson explained “We rely on industry-standard indicators that other companies include in content from their tools, so we’re actively working with these companies to improve the process so our labeling approach matches our intent.”
Blurring lines
Meta’s mislabelling also exposed another problem with AI – one of blurring lines between what is and isn’t AI. Many photographers noticed that Meta was ascribing the ‘Made by AI’ label to images edited using some of Adobe’s tools like Photoshop. Photoshop is used to remove a bit of garbage on the lawn in an otherwise flawless frame of a bride and groom, or to make a sunset look more dramatic than it was. But it can also be used to make waistlines look slimmer, lips fuller and skin smoother – which brings a range of other ethical issues and mental health concerns.
But increasingly, tools like Photoshop have AI integrations. Here’s an example: instead of manually scrubbing out the garbage, you can use a text prompt to “tell” Photoshop how you want the image edited, and it will interpret your verbal prompt to remove garbage for you. So, you might end up with the same output as if you had scrubbed out the garbage yourself, but your image now has a tiny bit of code which says to Meta’s AI detector that it has been ‘Made with AI’.
Tiny Artificial Intelligence integrations are making their way into tools we use day to day. This is not new. Microsoft Word, on which I am currently penning my thoughts, launched its ‘Editor’ function way back in 2016. This is an AI-powered service which performs spell checks and recommends grammar corrections. Even though this article is a product of my very human brain, I’ve relied on Word to correct a few typos for me. So, is it ‘Made with AI?’ All in the eyes of the beholder or in the eyes of the AI detector.
Some notes:
Meta has acknowledged it is trying to resolve the mislabelling of images.
The ‘Made with AI’ label is currently only visible on the mobile app; not desktop.
When it comes to crisis communications, every situation is different. There are, however, certain skills and approaches that expert advisors can pick up and hone over the years, in order to guide a business and its leadership to the safest possible territory. Christian May talks to Hawthorn partner Jon Wynne-Jones about the art of crisis communications.
By definition, a crisis is unexpected if not entirely unforeseen. Is it possible to be totally prepared? The companies who fare best in a crisis, or are able to skillfully prevent an issue developing into a crisis, are those who have taken time to review and understand all their potential reputational threats. Nothing beats preparation, and when you’re faced with a serious problem it’s often too late to start from scratch. The protocols and procedures for an initial response should already have been agreed and understood, so leaders can act with forethought rather than trying to make snap decisions when facing a myriad of competing demands. As one example, we prepared an Issues Book for adidas ahead of the 2018 World Cup with a section on the unlikely scenario of the match ball bursting. Rather unbelievably, it happened in the first match, and we were able to respond within minutes, preventing the issue from unravelling on social media.
What’s the threshold for a crisis? How does it differ from a challenge, issue, problem, mistake or a bad day at the office? A crisis is often the result of an issue or mistake being mismanaged. The significant difference between them is the level of negative attention a crisis creates for the organisation, and ultimately the impact it has on the reputation and the bottom line. Veteran Labour spin doctor Alastair Campbell used to measure crises by the length of time the story would last on the front pages, but whereas political crises can end with a resignation, a company can find that they take months to recover from. Recent examples that highlight the contrast between an issue and a crisis would be the debacle over the Co-Op Live arena cancellations and the Post Office scandal, which were – – respectively a short-lived embarrassment and an all engulfing, era-defining nadir.
What are some of the main mistakes that a business could make in the initial response to a crisis? There is a fine balancing act to be managed in responding to a crisis. On the one hand, there is immediate pressure to comment, to provide clarity on the situation, but any engagement risks fueling the fire unless it is part of a comprehensive crisis comms plan. This tension can too often lead to businesses providing a statement before all the facts have been established or providing reassurances that prove to be unrealistic. In a worst-case scenario, this can see a business making a denial that later proves to be untrue. These types of errors can result in trust being shattered, sometimes permanently.
In the other extreme, some organisations refrain from commenting when it is clear that they are at fault, and the longer they remain silent, the more the outrage grows as they lose control of the narrative. For businesses with a large customer base or consumer-facing brand, effective communication is particularly vital in order to reassure, explain, and retain trust.
Can you give us an example of a business that has responded to a crisis well? It depends on the nature of the crisis and the measure of success. Each crisis is different, for different reasons. Some may last a matter of days or weeks while others threaten much longer term ramifications. Anyone who really studies crisis communications is familiar with the Tylenol crisis at pharmaceutical giant Johnson and Johnson. Tylenol was American’s market-leading painkiller, but in 1982 someone tampered with a batch during production and the poisoning caused seven deaths in the Chicago area. It was horrific, but the response of Johnson and Johnson’s Chairman James Burke would become a model in effective crisis communications. An immediate policy of total openness combined with a national product recall and long-running media campaign was seen by some as a risky overreaction, but the company ultimately won plaudits for its constant and unvarnished communication. Burke basically said: “Do not take this product until I tell you it is safe to do.” And the public trusted him. The company’s market share and performance recovered within around 12 months, when it could so easily have collapsed if the crisis wasn’t handled and managed with such authority and clarity.
And less well? RedBird’s recent attempt to acquire the Telegraph with the UAE-based IMI emphasised the importance of communications, and how mismanaged corporate affairs can snowball into geopolitical complications. As the groundswell of opposition to the proposed takeover gained an increasingly broad coalition, the ferocity of the criticism directed towards the Gulf state led to strained diplomatic relations. In believing that they could do a deal directly with the Barclays, they ignored the need to build an alliance of advocates to support the benefits of the move and completely underestimated the level of hostility that a UAE-backed acquisition would provoke amongst Telegraph and Spectator staff. Their complacency meant that they were never in control of a story that spiraled out of their control and has run prominently for much of this year.
Depending on the nature of the crisis, presumably there could be a different emphasis on internal and external communications? While there tends to be a greater focus on external communications during a crisis, internal communications is hugely important, not only for keeping staff informed and motivated, but also for preventing the issue being exacerbated by the negative reaction of employees. For example, during the investigation into allegations of misconduct by DJ Tim Westwood, staff at broadcasting giant Global revealed that they had been told not to report the claims and some of the presenters went public on social media in voicing their disquiet, compounding the crisis. Internal communications should be aligned with what is expressed externally as anything that is inconsistent risks making the organisation look disingenuous. All audiences need to be considered; whether that’s suppliers and customers or stakeholders, staff and the media.
How has the impact of a crisis changed over recent years? Has it become harder to contain or respond to? The inexorable growth of social media and 24-hour news have changed the immediacy of a crisis, and increased the pressure to respond quicker. With the level of scrutiny now more forensic than ever, one misstep has the potential to cause significant damage: an unguarded comment to a reporter or an ill-judged tweet can deepen a crisis. The power of lobby groups and influencers online can inflame and distort an issue, leaving an organisation at risk of losing control. If a crisis used to be measured by the level of coverage in the papers, the amount of engagement the issue receives online is now a determining factor. However, engaging with critics online is rarely advisable or beneficial because the conversations tend to be so febrile and partisan.
Although social media and 24-hour news may have changed the impact and spread of a crisis, the rules behind managing them remain largely the same. The best way to control widespread attacks is to demonstrate contrition where appropriate, control of the situation with clear communications and an honest commitment to addressing it.
Quite often a company’s systems and protocols are revealed by a crisis; either found to be up to scratch or found wanting. How should businesses put their crisis playbook into the best possible shape? The best way to test their crisis playbook is through practice. Crisis simulation sessions, which involve realistic scenarios played out online and mock interviews of the leadership team, gauge how clearly the organisation has defined their processes and whether the messaging sounds authentic and persuasive. Playbooks need to be constantly reviewed and updated to ensure they remain relevant. There might be occasions when a crisis has emerged that hasn’t been foreseen, but the central principles of how to handle the response remain the same.
In a lot of cases, there ends up being a tension between the advice of lawyers and the advice of communications professionals. How should this dynamic be managed? An organisation’s lawyers are understandably, and rightly, circumspect in the wake of a crisis, as they are wary about any comments, internally or externally, that could undermine their position. This can cause a tension with the comms advisors who have similar concerns that by saying nothing, a business can worsen the crisis by creating the wrong impression. Silence can seem arrogant and aloof, not in control of a situation or in denial as well as ceding the narrative to the media and critics. Best practice sees the legal and PR teams working collaboratively, sacrificing any self-interests to put the client first. The legal ramifications need to take precedence, but when the teams work efficiently together, the organisation is allowed to provide comment when relevant, with the content having been agreed with the lawyers. On occasions when it is mystifying that an organisation has not commented on a crisis, it will often be due to restraints from the legal team, in which case other forms of communication need to be considered. When Thomas Cook was accused of negligence following the deaths of two children at one of their package hotels, their months of silence became unbearable and ultimately contributed to a catastrophic reputational hit.
It probably isn’t desirable but is it possible to have a good crisis? While nobody welcomes a crisis, handled well they present an opportunity for a company to demonstrate its values. Those companies who express genuine remorse where they’ve made a mistake, clearly take care of their customers and articulate how they have addressed the issue, can find their brand enhanced with people clearer about their identity. One of the best managed crises of recent years remains when KFC ran out of chicken, which could have been a deeply embarrassing episode. Instead, by responding quickly and intelligently on social media, they gained widespread acclaim for how they engaged with their customers. demonstrating the values of a company that understands its customers. The way they used humour, rearranging the letters to spell FCK on a chicken bucket, and kept their customers informed through each stage of correcting the issue, was a perfect example of how a failure can be transformed into a win.
Described as “unmatched in shaping the news agenda” by the British Press Awards, Jon Wynne-Jones oversees our work supporting clients facing issues and crises, with extensive experience of helping global companies and federations to navigate reputational challenges.
The thing to remember about last night’s TV debate is that the two leaders were pitching squarely at an audience who were probably paying attention to the campaign for the first time. That’s their hope, anyway.
Political obsessives (which includes almost all journalists and most people on Twitter) may have followed the twists and turns of every Multilevel Regression and Poststratification opinion poll since the election was called, but most people haven’t. TV debates, still a novelty in this country, represent a fresh chance for the parties to hammer their key messages, deluge social media with clips, make an impression and dominate the headlines and airwaves. So, if it seemed to you as if Starmer and Sunak were robotic in their repetition of simplistic messages (change with Labour or a bold plan with the Conservatives), it’s because they fully intended to. A political slogan isn’t doing its job until the public becomes fed up with hearing it, and the 4.8 million people who watched the debate were probably close to this point by the end of it.
In that context, it’s no surprise we didn’t get a gladiatorial clash of intellects and philosophies. The format didn’t help, either, with ITV’s Julie Etchingham determined to cover as much ground as possible. Thus, mere moments were spent eliciting soundbites on such weighty topics as the future of the economy, global security, climate change, and immigration.
As for the leaders’ performances, there was a marked difference between the two.
Starmer had turned up expecting a rules-based regency duel, only to find Sunak putting on some knuckle dusters. The PM might have delivered his opening statement as if he were reading it off the back of a cereal box, but as soon as the questions started, he showed some fighting spirit. Another way to put it would be “rude and abrasive” – constantly interrupting Starmer and disregarding the agreed rules regarding who speaks when and for how long. The Labour leader routinely muttered “desperate” in the face of Sunak’s barrage of jibes, perhaps forgetting that the Tory leader was indeed in a desperate situation. Polls this week have shown he’s on course to lead his party into oblivion.
Tories needing a boost could cling to the notion that their guy did better than expected. One Tory advisor who watched the debate at party HQ told Hawthorn it was “the best evening of the campaign so far” and said there was plenty of cheering and table banging among staffers. Of course, if the PM couldn’t raise a cheer from his staff, he would be in trouble.
Snap polling of the viewing public by YouGov found that Sunak ‘won’ – by a single percentage point, but as a Labour source told us: “the debate polling has aged better overnight with Starmer leading on substance and all aspects including NHS, economy, immigration, the economy and cost of living as well as overall with a much wider poll.”
As for the different styles the two leaders took, Labour insiders are confident that Starmer’s calmer, more measured tone will ultimately prevail over Sunak’s “what have I got to lose?” aggression.
The Tories can chalk up ‘not crashing and burning’ as a modest victory, but turning their campaign around will take more than that. Indeed, there are signs that the PM’s performance is unravelling. He made much of “Treasury analysis” claiming that Labour’s spending plans will amount to a £2,000 tax bill for every family in the UK, but this morning the Treasury’s top civil servant has said the claims shouldn’t have been used and certainly shouldn’t have been attributed to independent officials.
Labour will be pleased that the debate seems to have allowed Starmer to reassert his more statesman-like qualities, while the Tories have yet to even digest the impact of Nigel Farage’s return to frontline politics, the consequences of which are likely to silence any further cheers from inside Conservative Campaign Headquarters.
Recently, Hawthorn Advisors joined a UK trade mission to Riyadh to mark a flourishing relationship. Among the fin tech, ed tech, med tech, media tech, everything tech, entrepreneurs, were leaders of the great cultural institutions; our museums, opera houses, concert halls.
Political leaders are begging our cultural sector to be “a bit more French” in promoting ourselves. Our architects and designers already know the opportunities in a kingdom unfurling the wonders of its history and cultural identity, too long hidden from the rest of the world. Tourism will follow.
Standing in the sandstone evening sunlight of Diriyah, our delegation mused on how we might be a bit showier about our own cultural excellence. One suggested a national day. We really liked the logo of Great next to the Union flag. One of the guests had masterminded the opening ceremony of the London Olympics, and suggested playfulness was a national quality which was under rated.
Which other country would simulate the Queen sky diving in a James Bond sketch?
We might also celebrate a tradition of craft, which King Charles champions tirelessly. It was this that Walpole, the official sector body for UK luxury, was cheerleading in Riyadh.
Interviewed on stage was the chair of Walpole, Michael Ward, who is the Managing Director of Harrods. He has described luxury retailing as a state of mind, an aura of uncompromising quality, innovative, lasting. Since Michael has been in the job for 20 years, he seems to have become a luxury item himself.
One of his first acts was to move Harrods away from being defined by its seasonal sales. Flogging a mass of stuff brought in for the purpose, is not luxury.
Helen Brocklebank, CEO of Walpole, welcomes membership on the following criteria: “You should be outstanding in your own particular field and exemplify the highest standards in terms of quality, style, design, craftsmanship, creativity, service, innovation and sustainability.”
Where once luxury might be equated simply with wealth, it is now imbued with values of excellence and sustainability. It is rarer. And the expense is not arbitrary. If a bag is made from natural materials and designed with skill and if the environment and community which produces this bag is valued, it takes time, and you are paying for that. Luxury is patient.
The backlash against fast fashion, which debased creativity and trashed the environment has led to a greater respect for luxury brands. The big challenge for luxury is how far its customers will embrace recycling materials. A friend of mine who designs high end fabrics says she has been initially disheartened by her attempts to entice the American market to accept more sustainable or recycled materials. For some customers, new linen or cashmere is non-negotiable.
Luxury brands have, unsurprisingly, being less hit by the cost of living than other brands, and have a chance to plough profits into innovative, sustainable materials, supply chains and skills.
A resurgence of skills and craftsmanship would be a wonderful thing for the UK and its place in the world.
I have been reading The Radical Potter, by Tristram Hunt, the director of the V and A museum, which was created in order inspire a nation of craft and design.
The full title of the book is The Radical Potter: Josiah Wedgwood and the Transformation of Britain.
It is not an empty claim. When Wedgwood created the famous Frog Service, for Catherine the Great, crowds came to view it. The happy client, in turn, praised Britain as “that island of wisdom, courage and virtue.”
For Labour, this election campaign marks the culmination of a process that’s been underway since Keir Starmer became leader; to reassure the business community by burying his predecessor Jeremy Corbyn’s far-left agenda. Earning the trust of the business community has been a central part of this plan, and it has worked. We can tell it’s worked because nobody laughed when Shadow Chancellor Rachel Reeves declared yesterday that the Labour party “is now the natural party of business” and that she plans to run the “most pro growth, pro business Treasury in the history of our country.”
What does this mean in practice?
According to Reeves, it means going for growth with all the enthusiasm of Liz Truss but without the unfunded market-spooking radicalism. In her speech at Rolls Royce in Derby, Reeves reiterated her pledge to abide by robust fiscal rules as well as her commitment to getting debt falling by the end of the parliament. She also recommitted to a new “Business Tax Roadmap”, first announced at the Labour Business conference in February, to be published within six months of an election win, providing certainty over taxation for the life of the parliament – including a pledge to cap Corporation Tax at its current rate. Labour has also rowed back on some of the more controversial elements of a new “workers’ rights” package, promising that nothing will be imposed without a thorough consultation and input from employers. Labour’s plan to replace the unpopular Apprenticeship Levy with a new approach to skills training will have also caught the attention of bosses.
But woven through these specific pledges runs a more nebulous idea: partnership. Reeves dismissed the “free market dogma of the past” in favour of “a new spirit of partnership” with British business. “Our plans for growth,” she said, “are built on partnership with business.”
The party has made much of its newly minted links with business leaders, not least in financial services and in the formation of an industrial strategy, but one of the most eye-catching expressions of what a partnership could look like comes in the form of Labour’s planned National Wealth Fund.
The policy is being worked on as we speak by The Green Finance Institute and members of this early-stage commission include Legal and General, Aviva, NatWest, USS and other pension funds plus some green campaign groups. The plan is to kickstart the fund with around £7bn of public money before, as Reeves puts it, “crowding in tens of billions from the private sector.” The subsequent investments will be targeted at national infrastructure projects, with an emphasis on the green transition and low carbon energy generation. While we await details of how exactly this will work, it’s worth noting that the terminology is misleading. A “Wealth Fund” puts one in mind of countries like Norway, whose Sovereign Wealth Fund is valued at north of £1 trillion and includes stakes in over 9,000 companies globally. Labour’s plan appears to be more of a Development Fund, financing shared public-private infrastructure schemes.
The legal, regulatory, governance, risk and compliance elements of such a scheme are myriad and complex, and while they don’t amount to a reason not to try it, they should certainly serve to dampen the spirits of anyone who envisages a rapidly established, well capitalised and agile investment vehicle.
The likelihood is that a Fund such as this, however muscular, will not on its own be able to deliver anything like the kind of economic growth on which Starmer and Reeves are so clearly basing their future plans. With further surprise tax rises ruled out and a pledge not to borrow to fund day-to-day expenditure, only rapid and sustained GDP growth will allow Labour to deliver on its ambitions.
And here we come full circle. Back in 2010 a young David Cameron and his then Shadow Chancellor, George Osborne, talked of “sharing the proceeds of growth.” Future reductions in the tax burden and uplifts in public spending would only come, they said, from growing the economy. This is almost word for word Labour’s policy today.
Until the full manifesto is published, the central offering from Starmer and Reeves – to the country as much as to the business community in particular – is that “stability and certainty” will be restored to British policy making. As Reeves said yesterday in one of the less catchy soundbites of the campaign, “stability is change.” It may well be the case that a sense of competence and a less volatile political environment yields an uptick in business sentiment and investor activity, but on its own it’s unlikely to improve the intransigent rates of sluggish GDP growth that have characterised so many developed economies in recent years.
Labour is banking on a stability dividend, and there’s no shortage of businesses or individuals ready to cash one in after years of political and economic shocks, but a large part of Labour’s promised stability actually takes the form of continuity; on spending plans, headline tax rates and fiscal rules. These are political calculations designed in large part to reassure an electorate and head off political attacks, but they leave Labour with a set of policies that risk falling short of their own rhetoric.
For Labour, this election campaign marks the culmination of a process that’s been underway since Keir Starmer became leader; to reassure the business community by burying his predecessor Jeremy Corbyn’s far-left agenda. Earning the trust of the business community has been a central part of this plan, and it has worked. We can tell it’s worked because nobody laughed when Shadow Chancellor Rachel Reeves declared yesterday that the Labour party “is now the natural party of business” and that she plans to run the “most pro growth, pro business Treasury in the history of our country.”
What does this mean in practice?
According to Reeves, it means going for growth with all the enthusiasm of Liz Truss but without the unfunded market-spooking radicalism. In her speech at Rolls Royce in Derby, Reeves reiterated her pledge to abide by robust fiscal rules as well as her commitment to getting debt falling by the end of the parliament. She also recommitted to a new “Business Tax Roadmap”, first announced at the Labour Business conference in February, to be published within six months of an election win, providing certainty over taxation for the life of the parliament – including a pledge to cap Corporation Tax at its current rate. Labour has also rowed back on some of the more controversial elements of a new “workers’ rights” package, promising that nothing will be imposed without a thorough consultation and input from employers. Labour’s plan to replace the unpopular Apprenticeship Levy with a new approach to skills training will have also caught the attention of bosses.
But woven through these specific pledges runs a more nebulous idea: partnership. Reeves dismissed the “free market dogma of the past” in favour of “a new spirit of partnership” with British business. “Our plans for growth,” she said, “are built on partnership with business.”
The party has made much of its newly minted links with business leaders, not least in financial services and in the formation of an industrial strategy, but one of the most eye-catching expressions of what a partnership could look like comes in the form of Labour’s planned National Wealth Fund.
The policy is being worked on as we speak by The Green Finance Institute and members of this early-stage commission include Legal and General, Aviva, NatWest, USS and other pension funds plus some green campaign groups. The plan is to kickstart the fund with around £7bn of public money before, as Reeves puts it, “crowding in tens of billions from the private sector.” The subsequent investments will be targeted at national infrastructure projects, with an emphasis on the green transition and low carbon energy generation. While we await details of how exactly this will work, it’s worth noting that the terminology is misleading. A “Wealth Fund” puts one in mind of countries like Norway, whose Sovereign Wealth Fund is valued at north of £1 trillion and includes stakes in over 9,000 companies globally. Labour’s plan appears to be more of a Development Fund, financing shared public-private infrastructure schemes.
The legal, regulatory, governance, risk and compliance elements of such a scheme are myriad and complex, and while they don’t amount to a reason not to try it, they should certainly serve to dampen the spirits of anyone who envisages a rapidly established, well capitalised and agile investment vehicle.
The likelihood is that a Fund such as this, however muscular, will not on its own be able to deliver anything like the kind of economic growth on which Starmer and Reeves are so clearly basing their future plans. With further surprise tax rises ruled out and a pledge not to borrow to fund day-to-day expenditure, only rapid and sustained GDP growth will allow Labour to deliver on its ambitions.
And here we come full circle. Back in 2010 a young David Cameron and his then Shadow Chancellor, George Osborne, talked of “sharing the proceeds of growth.” Future reductions in the tax burden and uplifts in public spending would only come, they said, from growing the economy. This is almost word for word Labour’s policy today.
Until the full manifesto is published, the central offering from Starmer and Reeves – to the country as much as to the business community in particular – is that “stability and certainty” will be restored to British policy making. As Reeves said yesterday in one of the less catchy soundbites of the campaign, “stability is change.” It may well be the case that a sense of competence and a less volatile political environment yields an uptick in business sentiment and investor activity, but on its own it’s unlikely to improve the intransigent rates of sluggish GDP growth that have characterised so many developed economies in recent years.
Labour is banking on a stability dividend, and there’s no shortage of businesses or individuals ready to cash one in after years of political and economic shocks, but a large part of Labour’s promised stability actually takes the form of continuity; on spending plans, headline tax rates and fiscal rules. These are political calculations designed in large part to reassure an electorate and head off political attacks, but they leave Labour with a set of policies that risk falling short of their own rhetoric.
The financial and professional services industry has been using various forms of AI and automation for decades, but just like the rest of us they’ve also been swept up in the huge advances in machine learning and generative AI that have exploded in recent years, even recent months. Goldman Sachs forecast that $200bn will be commercially invested in AI by 2025, up from around $130bn last year. Gartner, meanwhile, claims it will be $300bn by 2027. Bloomberg Intelligence forecast this week that the figure will be $1.3trillion by 2032 and Skyquest analytics say the figure will reach $170bn of AI investment in financial and professional services alone by 2031. Whether these forecasts will prove accurate or not the level of expectation today tells us how seriously the sector is being taken. But to what end? Why? And what does this investment actually look like?
On Wednesday morning Hawthorn Advisors gathered an expert panel to discuss this and to explore how AI is changing the financial services industry – and how it might continue to change as the various forms of AI get smarter, more accessible and more bespoke.
City Minister Bim Afolami joined Lisa Quest of consultancy Oliver Wyman, Megan Bulford of the CBI’s financial services policy team and Dr Lewis Liu, CEO and co-founder of Eigen Technologies which uses advanced AI to turn mountains of documents into dynamic, meaningful data for banks, insurance companies and the healthcare industry. Between them the discussion took in a huge range of topics from AI’s limitations to the global regulatory landscape, legal risks, transformative potential and impact on jobs and the wider economy.
One of the main themes sparking discussion between the panellists and among the invited audience was whether businesses (and the UK more broadly) have access to the sufficient level of skills to exploit the advantages AI can bring to a business. “AI knowhow cannot be confined to the tech team,” was how one panellist put it, while others noted that upskilling and training has to be part of all our lives in the years ahead. The emerging regulatory environment also proved to be a hot topic, with a consensus emerging that the UK stands to benefit from its light-touch approach, perhaps in contrast to the stringent regime imposed across the EU.
When it comes to the application of AI in the financial services industry, panellists explored the many business functions already being replaced or enhanced by AI technology, not least in risk management and in mobilising a company’s institutional memory through the AI-powered analysis of existing data, documents and precedent. This speaks to the immense productivity gains that AI enables, and panellists felt that the economic benefits of this transformation will be felt nationally – not least given the prevalence (or dominance) of the financial and professional services sector within the UK economy. There was a general sense of optimism and excitement as the use cases and practical benefits of AI continue to reveal themselves, but several cautious notes were sounded by our expert speakers. These tended to relate to questions of risk and barriers to adoption – be they cultural, technological or financial. Some panellists expressed serious concern that regulators, be they global or local, will continue to be outmanoeuvred by large AI firms – not least in areas such as copyright protection, which remains a live issue before the courts in many jurisdictions.
In a sector where the technology is moving so fast, but with no genuinely settled regulatory framework in place, many firms will find themselves trapped between a fear of missing out and a cautious wait-and-see approach. What’s abundantly clear is that any discussion on AI, particularly one involving such informed experts, inevitably touches on grand philosophical questions as much as it does on the mechanics of large language models. Lewis Liu, who holds a rare joint honours from Harvard in fine art and physics, was particularly strong on the social, cultural and political debates sparked by AI’s rapid development.
Hawthorn’s guests in the audience, drawn from across the banking, fintech, legal and investor community, benefited from an extremely wide-ranging, stimulating and lively debate, as evidenced by the range of questions posed from the floor. There is a huge appetite for informed, open discussion on this topic, whether from those who are far advanced in their AI deployment or those still searching for the right path to take.
At 5pm on 22nd May 2024, Prime Minister Rishi Sunak announced his intention to call a General Election for 4th July. His decision confounded the expectations of the many pundits and politicians who had predicted an autumn election.
There will be a rush of activity over the coming weeks, with the race starting immediately. Read below for Hawthorn Advisors’ analysis on what to expect and what this means for businesses.
Analysis
In the end, Rishi Sunak took almost everyone by surprise. Just days ago, he laughed when he told the presenters of ITV’s Loose Women that their “summer was safe” – when pushed on a date for the General Election. Looking back on that exchange, he clearly meant “from July 5th onwards…”
The surprise announcement set Westminster abuzz, not least because political journalists live for elections. But what of the reaction elsewhere? Tory MPs, many of whom were banking on an October or November poll, now face the prospect of having their careers and livelihoods cut short by several months, to put it bluntly. The mood among some is said to be mutinous. “This is madness,” says one. Others may be more resigned, while some seem more up for the fight. “Bring it on,” said Rupert Harrison, one of a new breed of Conservative candidates facing an uphill fight in a new parliamentary constituency in Oxfordshire.
As election announcements go, it was inauspicious. Sunak stood at the lectern outside Number 10 and the rain fell. He was almost drowned out by that great New Labour anthem – Things Can Only Get Better, blasted at the gates of Downing Street by one of the resident protestors. And the bible of Conservative politics, The Spectator, had just sent its latest edition to print with a stark leading article concluding: “calling a summer election would be madness for the Tories.” MPs can read it in the coming days as they gear up for the fight of their lives.
As for the speech, Sunak started with what sounded like a long list of excuses, just to remind us: we’ve been through a pandemic, war in Europe, and energy shocks. The subtext was clear—”this mess isn’t my fault.” While his case for the defence was trotted out without any energy or enthusiasm into the microphone: our economy is turning a corner, the world is dangerous, Labour doesn’t have a plan, don’t risk your vote on them.
The Labour leader won’t need to feign his enthusiasm for an election, starting as he is a whopping 20 points ahead in the polls. Those polls may narrow, and the coming six weeks will serve up all the usual daily twists and dramas of election campaigns, but even something in Sunak’s tone of voice – never the most natural – suggested the PM knows the mountain is high and the odds of success are painfully small. It’s a sense you can get in person from cabinet ministers. They will tell you how hard they intend to fight. They are less keen to say that they think they can win. The image of a drenched Prime Minister sloping back into Number 10 may well resonate with voters watching the evening news.
Doubtless, the weather will improve, and doubtless, the long evenings ahead informed the decision to go to the country early, in contrast to the prospects of campaigning for votes in the cold and dark days of Autumn. But the Conservatives will need more than a break in the weather to put a spring in their step. The last time an election was held in July was 1945. The country was emerging from hardship and war, and the country returned a Labour government by a landslide.
What happens now?
There is a 25-day gap between Parliament being dissolved and the date of the election. This is formally the election period, when MPs standing in the election become candidates once again, and government business concludes. For an election to be held on 4th July, Parliament must dissolve on 30 May. For this to happen, the short May recess will be cancelled so that Parliament can wrap up its remaining business.
Before Parliament is dissolved, there will be a legislative ‘wash-up’ period, during which the fate of the remaining Bills that have not yet achieved Royal Assent will be decided. In a departure from the usual process, Bills are expedited through all their remaining stages in a matter of hours. It’s a rare moment when the Opposition has extreme power to agree on what legislation gets nodded through and what gets struck down.
There are 16 Government Bills, 2 Hybrid Bills (a mix of public and private bills), and 10 Commons Private Members’ Bills that have not yet received Royal Assent. The most contentious of which may not be passed, or Labour may negotiate changes to Bills over areas they disagree with. Those with popular crossbench support, such as the Tobacco and Vapes Bill, may yet survive, which Sunak nodded to in his speech.
What can businesses expect?
With just six weeks until polling day, the parties will enter a dash to finalise their manifestos and prepare for the campaign. Regardless of whether a Labour majority is the forgone conclusion that most pollsters predict, Parliament’s makeup will look vastly different in two months’ time. For businesses, now is the time to focus on what a new government of either colour might mean for your industry, and to consider the figures who will be influential in the future of your sector.
We will be posting regular updates during the campaign on policy and politics and how that might affect your business. If you’d like to speak to us about Hawthorn’s Political Advisory offering, please email Mark Burr at m.burr@hawthornadvisors.com.
Inflation down (3.2 per cent), wage growth up (6 per cent) and economic growth restored (0.6 per cent GDP growth over Q1) – so are champagne corks popping in Downing Street? Put the bubbly back on ice. Firstly, “we’re no longer in recession” isn’t the rallying cry some people think it is, and the rapid pace of wage growth – while undoubtedly good news for workers – is actually ringing alarm bells in some quarters given the impact it might have on inflation and, therefore, interest rates. The UK unemployment rate is also ticking steadily up, with the hundreds of thousands of long-term sick now almost certain to become Labour’s problem. The government’s message is understandable; stick with us, the plan is working, don’t risk it by letting Labour back in. The problem is, this approach is akin to standing in the middle of a biblical flood and telling everyone that you think the sun is beginning to burn through the cloud. They might be pleased to see it, but they have more immediate concerns.
In 1997 the opinion polls were clear that John Major was facing electoral defeat, with Tony Blair’s New Labour poised for power. The fact that Major could point to an economic rising tide made no difference to his fortunes and he ultimately bequeathed one of the best economic legacies to his successor. The data might have painted a decent picture but the public were in no mood to reward the Tories. They’d been in power for too long, they were riddled with internal divisions, their Prime Minister (despite electoral success in 1992) was gravely weakened, the party’s reputation for economic competence had been undermined by events and the mood of the country had shifted. Is history about to repeat itself?
It’s even possible that a narrative of economic revival benefits the opposition more than the government, adding to a sense of renewal and a change of direction rather than shoring up the incumbents. But other than some modest GDP growth and a more temperate inflationary environment, what kind of economy would a Labour government inherit?
That the Conservatives have made some economic missteps is not in doubt, but none have been as consequential as the cost of the pandemic. We don’t like to talk about it these days, but the government’s pandemic response came with a price tag approaching £400bn. In 2020/21 the state spent £200bn more than it had budget for. This is to say nothing of the cost to the Treasury from the wider economic collapse, the loss of growth and the deep economic scarring, and it doesn’t take into account the many tens of billions then spent in response to the global energy price shock. This is real money and the consequences of such unprecedented expenditure will be felt for decades, most immediately in the form of higher taxes – regardless of who wins the election.
So, while the Tories can forget about voters rewarding them for a modest uptick in public finances, so too can Labour dismiss the idea that they’ll be able to turn on the spending taps the moment they take office. After the 2010 general election the outgoing Chief Secretary to the Treasury left a note for his Conservative successor; “sorry there’s no money left.” The current occupant of that office might very well end up reaching for the same sentiment.
Given that Labour has ruled out any hikes to income tax, the smart money says they’ll be looking at raising revenue through relatively less politically sensitive reforms in areas such as wealth, property, inheritance, dividends and capital gains. All governments sneak in stealth taxes. Gordon Brown was famous for it and the current government has allowed fiscal drag to do the heavy lifting. If Labour do target wealth, capital and dividends for tax increases will they do it without fanfare or instead seek to benefit from the political dividing line that such moves would open up?
As the election approaches the Conservatives will continue to treat the economic recovery like a Ming vase – “don’t let anyone else touch it” – but we also know they’d like to make a big retail offer on tax cuts, whether ahead of the election or as a future aspiration. Chancellor Jeremy Hunt dipped his toe in these waters with hints about a potential abolition of National Insurance at some point in the future, but the idea has allowed Labour to warn about the “black hole” such a move would produce in the public finances. In short, we’re starting to see the coming economic debate take shape, but we should all keep a close eye on the details and take any pre-election promise with a pinch of salt. The parties may feel liberated by the rush of political battle but they will be constrained by economic reality.
You might not plan on staying up through the small hours of Friday morning to watch the local election results trickle in, but Thursday’s set of polls are nevertheless set to be revealing and consequential. Over a hundred local authorities in England are electing councillors while ten Mayoralties are up for grabs, including in the capital where residents will also be voting for members of the London Assembly.
Once the votes are counted there will be plenty to pore over, right down to individual council wards as party strategists seek to identify their strongholds, their opponents’ weak spots and the gaping holes in their own defences. Taken together, Thursday’s elections will offer a substantial if incomplete glimpse into the state of the nation. While it may feel as if the political narrative is well established (Rishi on the ropes, Starmer on the up) the results of this week’s ballots will refine and sharpen that narrative and may even change it – not least when it comes to the mood within the Tory party.
And while for many people the votes will be about local planning issues and bin collections, the results will also matter for businesses with an eye on the future political and economic direction of the country. So, what should we be looking out for, and what might be we discussing as the dust settles over the weekend?
What would be a good night for Labour?
The first thing to look for will be the size of the anticipated Labour gains. Political parties that are about to move from opposition to government invariably make large council gains in the local elections closest to the general election. This was true in 1979, 1997 and 2010 – three elections that saw a transfer of power at Westminster. If Labour’s share of the vote hits north of 45 per cent, it will point to a sizeable majority at the general election. As for the Tories, they’re already rolling the pitch with talk of “a tough night ahead” but even while they anticipate a drubbing in council elections, they’re holding out for two key mayoral wins; retaining the leadership of the West Midlands and Tees Valley. In the former, Andy Street has become more of a CEO of the West Midlands, while in the Northeast Ben Houchen has become a poster boy for so-called Red Wall conservatism and tangible levelling-up gains. To lose one of them would be unfortunate; to lose both would be careless. One Tory source tells us they’re “hopeful we can hang on to Houchen and Street” – suggesting that good news is likely to be thin on the ground come Friday morning, while a Labour source says both contests are on a knife edge and “MPs and candidates have been mandated to hit the phones and call voters in these areas to press for the win.”
A tale of two cities
The other big vote is of course for the Mayor of London. The polls suggest Sadiq Khan is on course to win a third term, but the Conservative Candidate Susan Hall insists she’s in with a chance, and while the conventional wisdom is that she won’t make it over the line, she does have her supporters. Nevertheless, there are plenty of Conservatives who think their chances would have been increased with a different candidate. One plugged-in former Tory advisor admits there are plenty of people in the party – and in Number Ten – who “can’t quite believe they allowed themselves to end up with Hall as their choice”, confident that Khan could have been defeated by a stronger Conservative candidate, perhaps in the style of Andy Street. That said, Hall is extremely popular among London-based members of the Conservative party and she has a large activist base. She also has a clear message for the large block of outer-London voters when it comes to the Mayor’s controversial ULEZ expansion (she’d reverse it) so don’t be surprised if she puts in a good showing. The change to the voting system (it’s now a clear first-past-the-post system) also gives her a boost.
It’s not just Red vs. Blue
And what of the other parties? If the Liberal Democrats are to take advantage of Conservative woes in the southern heartlands at the general election, then they will need to show progress in Rochford, Eastleigh and outer London boroughs such as Sutton and Merton if they are to convince voters to switch. Tory strategists are likely to be more concerned about bleeding votes to the right, with Reform polling at around 12% and already costing them thousands of votes at recent by-elections – a trend Sunak can’t afford to see repeated at the election. Labour strategists will also be keeping one eye on Bristol City Council, where the Greens are already the largest party (by one) and are hoping to pose a serious challenge in the new Bristol Central seat at the general election.
When the dust settles
In the wake of widespread Tory losses – especially if those losses include their crown jewel mayors in the West Midlands and Tees Valley – then the weekend papers will be even more full than usual of plots and briefings against Rishi Sunak. One Conservative adviser we spoke to concedes that “if it’s really bad on Thursday there will be lots of questions and it’ll be difficult for Number 10,” but adds that “the cabinet is full square behind Rishi and there’s just no appetite for a leadership election.” That final point might not be shared with Tory backbenchers, many of whom face losing their seat in a general election and may feel they have nothing to lose by rolling the dice on a new leader.
While the Tories will doubtless indulge in another round of infighting, however far it gets them, Labour’s messaging over the weekend will almost certainly be based on momentum, breakthroughs, the regaining of trust among voters and their readiness to fight a general election. The contrast with the Tories will be stark, something that won’t be lost on the public. Thursday’s votes constitute the last ‘live’ test of public opinion before the general election. The results and the picture they paint will feed into strategy and messaging for the months ahead, and the national campaign will be underway.
With tetchy exchanges and party tribalism on full display, the spring budget was an insight into the year to come. Set against a gloomy economic backdrop, the Chancellor tried to draw a clear line between the Conservatives and Labour ahead of the looming election.
Beset by pressures from within his own party, Hunt was obliged to find tax cuts. With forecasts from the Office for Budget Responsibility (OBR) giving less fiscal headroom than hoped, rumoured plans for a 1-2p cut to income tax were shelved in favour of a 2p national insurance.
He argued that tax cuts have only been affordable because of the government’s approach to tackling inflation. Inflation is now predicted to fall back to the 2% target by Q2 2024, a full year earlier than predicted. Now that wage growth is outstripping inflation, the Conservatives will want to wait until autumn to call an election. This will buy time for voters to start feeling better off.
High Growth Sectors
Hunt focused on reforms in areas he has described as high-growth industries of the future – financial services, life sciences, technology and the creative industries. These areas will be a significant focus of the government over the coming months, with consultations and proposals to be outlined in more detail. He announced several pro-investment reforms, including changes to pension investment and the next stages of the LIFTS initiative. He also launched a consultation on a new platform to allow private companies to trade their securities, known as PISCES. Continuing the successful policies of providing tax cuts for the filming industry first introduced by George Osborne, Hunt announced a further £1 billion of new tax reliefs for the UK’s world-leading creative industries.
The Economic Outlook
The bigger picture challenge for the Chancellor is whether these tax cuts are realistic. The OBR has warned that current spending plans carried a level of “uncertainty”, as much of the new spending is funded by assumed departmental savings to the tune of £19 billion for unprotected public services, a figure the Resolution Foundation has described as a “fiscal fiction”. This will cause challenges for the next government, whatever its colour, as departments find their already tight budgets stretched even more thinly. More big tax cuts or spending increases in the coming years are now off the table. In stark contrast to Labour’s inheritance in 1997, where they could increase National Insurance specifically to fund NHS pledges, a prospective Labour government in 2024 would not have ample fiscal headroom to spend on public services without significant tax hikes – an argument Labour doesn’t appear to want to have.
Hunt’s changes to the non-dom tax relief and extension of the windfall tax are an attempt to make up this shortfall whilst laying dangerous traps for Labour. By stealing two of the Shadow Chancellor’s tax-raising ideas, Labour’s room to call for increased spending has been snatched away. Labour is extremely cautious about making spending commitments, with the most notable example being the recent U-turn on a commitment to spend £28bn a year on a green prosperity plan. This was swiftly followed by an announcement to increase the windfall tax, much to the dismay of the oil and gas industry.
In this context, the Chancellor’s plan hasn’t been without risk, he was immediately criticised by Energy Minister Andrew Bowie after extending the windfall tax on oil and gas. This blue-on-blue is a flavour of what may be to come as Conservative party discipline continues to break down under the pressure of poor polling results.
What does this mean for Labour?
Labour’s ‘Ming Vase’ strategy – placing caution over passionate campaigning – is now ingrained in the Opposition’s strategy, and Starmer’s pitch at the election will reflect this. Whilst some consider it dispassionate, it may help to carefully maintain Labour’s significant polling lead as the election grows closer. The Conservative’s best chance of holding on to power would be to win back public confidence in the economy, so the Labour front bench is cautious to avoid commitments that the Tories could use to paint them as the party of unfunded spending.
Keir Starmer has responded to the budget by calling for a general election on May 2nd. He used his relatively short response to attack the government for 14 years of low growth, falling living standards and, despite the Chancellor’s claims to the contrary, the highest tax burden in 70 years.
An Autumn Election?
Labour will feel relieved that there was no income tax rabbit, but they know they have a difficult task ahead to communicate any new policy announcements and how they will raise the money without raising taxes. In the next few weeks, they will pile on the pressure for a May election; but the mood music from the budget signals the Tories are playing for time. The challenge for the Government is whether this budget will reverse their precarious footing.
To find out more about how to prepare for the general election and what this pivotal year could mean for your business, please contact our political advisory team, led by Mark Burr, Partner at Hawthorn.
Hawthorn Advisors is pleased to announce the senior appointments of Victoria Wallin and Richard Suchet to support the growth of the consultancy.
Both Wallin and Suchet join Hawthorn as Partners, after co-leading the Corporate Communications practice at Portland.
In addition to Wallin and Suchet, existing Hawthorn consultants, Jon Wynne-Jones, formerly Head of External Communications at dmg media, and Mark Burr, previously Deputy Director of European Policy at News Corp, have both been promoted to Partner.
They join the existing board of Partners; co-founders, John Evans and Sir Ben Elliot; former editor of the Today programme, Sarah Sands; former BBC political correspondent, Ross Hawkins; Steve Atkinson, ex Group Corporate Affairs Director at Standard Chartered Bank; and previous COO of King’s College, Anna Maria Clarke.
Wallin joins with over 20 years’ experience advising clients – from international corporates to disruptive start-ups, membership bodies and campaign groups – such as Wimbledon, Pfizer, Heathrow and the NSPCC.
Suchet joins Hawthorn after almost seven years at Portland where he advised a range of international and regional brands and businesses including Netflix, Universal Music, KPMG and Snapchat. A former journalist and broadcaster, Suchet was previously correspondent for Sky News and LBC.
Both Wallin and Suchet will report to Hawthorn co-founder & CEO, John Evans who commented: “Victoria and Richard bring invaluable experience. They both have huge energy and ambition and will be a terrific cultural fit at Hawthorn. We have ended our 10th year with double digit growth and an expanding team of over 70 consultants. This ongoing success is contingent on hiring the best talent and Victoria and Richard, together with a number of other hires we’ve made recently, will allow us to continue to scale.”
Wallin said: “As one of London’s fastest growing, independent strategic communications consultancies and with a presence across the UK and US, I’m thrilled to be joining Hawthorn and look forward to working with the team in delivering impactful communication strategies for our clients.”
Suchet added: “With its international client base – from private and public companies, multi-nationals and governments to fast-growth businesses – and impressive team of consultants, this is an incredibly exciting time to be joining Hawthorn and I’m very much looking forward to supporting and delivering the next stage of growth.”
Evans continued: “It’s also great to be promoting Jon Wynne-Jones and Mark Burr to Partner. Both Jon and Mark have been instrumental in driving growth over recent years and their promotions reflect their ongoing contribution to the business.”
Last summer, The Economist posed a straightforward question with a nuanced answer: is the luxury sector recession-proof? Unsurprisingly, the answer was a resounding “no.” However, Europe’s luxury sector has continually defied expectations, demonstrating impressive resilience even during economic slowdowns.
Yet as we look ahead to 2024, caution prevails among some of the European luxury market’s key players. Why is this?
Flashpoint 1: Re-imagining luxury for a new generation
After a dazzling few years of growth, Europe’s luxury sector appeared to be losing its sparkle at the end of 2023. This carried through into the new year, with 18 of the 20 largest luxury stocks reporting year-to-date declines in January.
This dip in demand can be attributed, in part, to the volatile economic landscape, particularly in the US and China (more on that below). But, it also stems from the changing habits of wealthy millennials and Gen Z. These seemingly unlikely growth drivers now wield significant influence.
Bain & Company estimates that younger generations—Generations Y, Z, and Alpha—will emerge as the dominant luxury buyers, accounting for a whopping 80% of global luxury purchases by 2030. These younger luxury customers have a very different view of the world – and are far less recession-proof than the more established luxury shopper (more on that below too).
A recent Deloitte report reveals that 62% of European luxury consumers are willing to invest in pre-owned luxury goods in the future, compared to just 40% in 2019. This shift reflects a growing interest in the circular economy and sustainability within the luxury shopping sphere – a high-cost, lower-margin, part of the market.
Younger luxury customers have a very different view of the world – and are far less recession proof than the more established luxury shopper.
Flashpoint 2: Uncertainty (and opportunity) on the global stage
While Europeans played their part in the post-pandemic luxury boom, it’s the economic engines of China and the US that have fuelled much of the industry’s growth.
Any sustained slowdown in these markets, therefore, spells trouble for the prospects of Europe’s luxury sector. Analysts predict that we may see this unfold in 2024, as both economic superpowers grapple with socio-economic and foreign policy challenges.
However, beyond the dimming growth engines, glimmers of hope emerge from unexpected corners of the globe. McKinsey, in collaboration with the Business of Fashion, identifies a constellation of promising new luxury hubs:
The Middle East, where opulence meets innovation.
India, a vibrant tapestry of tradition and modernity.
Thailand, Indonesia, Malaysia, and the Philippines, where cultural richness intertwines with economic dynamism.
South Korea, a powerhouse of technology and style.
Meanwhile, Bain & Co. sheds light on the emergence of luxury markets in Africa, where a rising upper middle class fuels aspirations and reshapes the industry’s map.
Flashpoint 3: A renewed focus on the elite customers
As the wallets of aspirational luxury shoppers tightened in 2023, brands shifted their gaze to the apex of their clientele—the top earners. These inflation-resistant patrons wield robust budgets (and in some cases grew them!).
Take, for instance, Gucci’s exclusive by-appointment store, aptly named the “Gucci Salon,” nestled in Los Angeles. Here, the brand caters exclusively to its most esteemed clients.
But it’s not just about money; it’s about access. Brands orchestrate experiences that transcend mere transactions:
Intimate dinners at designers’ private residences.
Starry, insider-only shows and parties that blur the lines between exclusivity and artistry.
According to Bain, the top 2 percent of luxury customers drive a staggering 40 percent of luxury sales. Engaging and retaining these ‘very important customers’ has always been critical to brands, but now, in an era of heightened competition, the challenge intensifies.
Engaging and retaining these ‘very important customers’ has always been critical to brands, but now, in an era of heightened competition, the challenge intensifies.
Flashpoint 4: the next frontier for technology
The pandemic catalysed the sector’s digital transformation. Consumers, out of necessity, shifted to online channels, and companies offering digital luxury thrived and expanded. Now, four years later, we are witnessing signs of a digital deceleration, with customers yearning for tactile, in-person luxury experiences.
Yet, technology remains a vital piece of the puzzle. While the vision of blinged up avatars never materialised, luxury brands continue to experiment with technology designed to change the way we shop.
Apple’s mixed-reality headsets are a great example of this, offering a familiar interface for luxury shoppers to explore and visualize products from the cozy confines of their homes.
As communications professionals, our role is to guide leaders through this intricate landscape and an ever-changing industry. Looks like we’re heading for a very interesting year ahead!
In 2024, two billion people across 50 countries will be heading to the polls. Among these 50 are three of the world’s biggest democracies, India, the United States, and the United Kingdom. This makes it the biggest election year in history. It is also the first big election year since AI tools have made their way from the safety of labs, and into the hands of the public. Digital political campaigning is about to get even more interesting.
Image of people and robots queuing up to vote in the UK General Elections 2024, created on DALL-E #AIGenerated
A decade of data wars.
It’s hard to remember a time when social media didn’t have on-platform advertising. In 2007 Facebook introduced its ad platform, but it wasn’t until after the 2016 US election that the platform took steps towards transparency. This cornerstone US election played out on social media and sparked some important ethical debates about digital campaigning, data privacy and transparency. For a whole 10 years, from 2007 to 2017, there were very few ways to tell if something was an ad, and who was running the ad.
Then, in 2018, the Cambridge Analytica scandal came to light, and the world became very aware of three things. Firstly, that Facebook was holding more data on users than the public realised; data which these users unknowingly gave away. Secondly, that algorithms fed on using data to polarise communities, urging the left to lean more left, and the right to lean more right. And thirdly, that there were ways in which this Facebook data could be extracted off platform, to be used by third parties.
A new era of responsible advertising
Post Cambridge Analytica, the rules began to tighten further. With public pressure and suspicion mounting, Facebook, Twitter, and other platforms began to restrict ad targeting and started becoming more transparent. You now need a government authorised ID to run any ads associated with political parties or government affiliated organisations. These are flagged on most platforms, with ads marked as ‘sponsored’. In addition, as per Facebook’s rules, political ads cannot target people based on their gender, ethnicity, race, household income or spending habits; with ad targeting restricted to basic geographic and language criteria.
There’s even a handy library of every single ad being run on Facebook; launched by the platform in 2018 in a bid to increase transparency. Anyone with a Facebook account can access this library and see just what ads are being run by whom. So if you are curious about the latest ads run by the Tory party, all you have to do is head over to Facebook’s extensive Ad Library to have a browse. If you look closely, you can even see how much was spent on each ad. Digital marketers everywhere, including at Hawthorn, absolutely love this tool. It levels the playing field for all competitors involved in a race.
It’s important to note that many of these restrictions and transparency protocols were not in place the last time the UK held general elections. We might now have more rules around who ads can target, but what about the content of the ads themselves?
A new agent of chaos
Generative AI tools like ChatGPT and Midjourney have ushered in an era of content creation that blurs the lines between human and machine-generated material. These tools can generate text, images, and even videos, and voice clones that are increasingly difficult to distinguish from authentic content. While bringing with them great creative potential, these tools come with an extraordinary power to manipulate and misinform. Just last week, the World Economic Forum put out its annual Global Risk Report which listed AI-generated misinformation and disinformation as the biggest threat of the year.
These technologies aren’t just being used to subvert democracy. In a case that hit the headlines last year, Pakistani political party Pakistan Tehreek-e-Insaf (PTI) used AI to clone the voice of former party leader Imran Khan. While Khan was locked up in prison unable to campaign for PTI, his AI-generated voice rallied the troops anyway, encouraging them to head out and vote for PTI, reaching 4.5 million people on social media. Many knew it wasn’t him speaking, the tech isn’t that good just yet, but his voice managed to deliver a message and found a clever loophole around a government issued gag order.
Governments and international bodies have begun to address the threat that AI-driven disinformation and misinformation can pose; but things are moving slowly. The European Union has reached a deal on AI regulation, albeit with implementation scheduled for 2025. The UK Government has been cautious about stifling AI innovation but has acknowledged the need for regulation of AI, and, as of now, there are no rules in place about flagging or restricting machine generated content. President Biden unveiled proposals in October 2023, including mandatory watermarking of AI-generated content.
Clearly regulation hasn’t quite caught with the new agent of chaos. But tech companies have been quicker to act this time around. Both Google and Facebook unveiled new platform rules that will require political ads to carry a label when they have been generated using an AI tool.
Who really wins?
In 2019, it was estimated that just under £9 million was spent by political parties in the UK on Google and Facebook, with just over £6 million on Facebook alone. Despite ad targeting being more regulated this time around, we can expect spending to be even higher. Last time, national party spending was capped at £30,000 per constituency during the short campaign i.e., if a party was contesting a seat in all 230 constituencies, they had £6.9 million to spend. This has now been increased to £54,010. For context, total campaign spending could go from £19 million to £34 million – a 78% increase.
If the same percentage was spent on digital advertising, Facebook and Google could come away with a cool £15 million from the UK alone – making them the real election winners, along with the many AI tools that might be used to produce this year’s ads.
Conference season is almost upon us and there is huge anticipation this year as these are likely to be the final annual conferences before the next general election.
For Labour, that means it is the last formal opportunity for party members to contribute to the manifesto, which is why there is some excitement about the publication of the National Policy Forum (NPF) final documents.
Here are the five things you need to know.
1. The NPF is elected to shape Labour policy
For those of you who aren’t Labour nerds, you might be wondering what this is and why it matters. Briefly, the NPF is an elected group of Labour members, trade union members and the Shadow Cabinet who debate and shape policy submissions. They last met for a long weekend in July and agreed a wide-ranging policy programme which is being circulated today. It matters because, as a democratic socialist party, Labour members expect to be able to shape policy.
2. Don’t believe the hype – this is not the manifesto
Despite all the noise, we are a long way from the Labour manifesto. First, this document needs to be endorsed by delegates at Labour party conference in October – where it can still be amended. Then Starmer and his team will spend the next year listening to businesses, unions, trade bodies, and of course the public, before the manifesto is finalised at the Clause V meeting just before the General Election.
3. It’s the economy, stupid
This may not be the manifesto, but it’s still important. And the 50 most important words in this document are found on Page 7 and are worth repeating:
Labour’s fiscal rules, as set out by Shadow Chancellor Rachel Reeves, are non-negotiable. They will apply to every decision taken by a Labour government, with no exceptions. That means that Labour will not borrow to fund day-to-day spending, and we will reduce national debt as a share of the economy.”
Confirmation, if it were needed, that Labour believes the path to No.10 lies in demonstrating that it is they, not the Conservatives, who can be trusted with the economy. This will mean battles with their own supporters about how much change Labour can promise, but Starmer and Reeves have made the calculation that it is the public who determine election results, not Labour members.
4. Labour is walking a tightrope with the Unions
Thirteen years of Conservative government have left most Unions focused on getting Labour over the line at the next election. But relations could be seriously tested if Labour wins. The NPF document contains many policies that Unions will like in the ‘A New Deal for Working People’ section (page 35), such as commitments to repeal anti-union legislation. Unions will expect action on those in the first 100 days of a Labour government – and Starmer will be criticised, as Blair was, if he doesn’t repeal Conservative Trade Union legislation. Greater pressure still may come from elsewhere – re-read the Reeves 50 words on the economy, then consider that some public sector unions have been asking for 18% pay rises. Tough negotiations lie ahead for Labour and the Unions.
5. Labour still has plenty of decisions to make
The NPF document and the Five Missions tell us Labour’s priorities, the direction they want to take the country in, and some of the policies they want to enact in government. But they can’t do much of it without the private sector. Starmer has been in listening mode with businesses since day one of becoming leader. He wants to present Labour as the party of business at the next election so that voters will believe his targets on growth and the economy. If you have something to contribute to that conversation, Labour will want to hear from you.
If there was ever a time to engage with the Labour Party, the time is now.
Sir Keir Starmer’s long awaited reshuffle took place yesterday. It had been widely briefed as an opportunity for Starmer to get his top team in place for the general election – promoting Shadow Ministers who have impressed and ensuring Labour’s most experienced and recognised faces are in place. Scroll down for the full Shadow Cabinet list.
Rise of the centrists
Labour’s centrists are unquestionably the winners. Rising stars Wes Streeting and Bridget Phillipson never looked in danger of losing their posts, and Peter Kyle, Liz Kendall and Darren Jones have all been elevated to the Shadow Cabinet. Starmer loyalists Shabana Mahmood and Steve Reed remain in the Shadow Cabinet. Meanwhile soft left MPs including Lucy Powell and Lisa Nandy were demoted to more junior roles and Angela Rayner, the powerful Deputy Leader, has been given the Levelling Up role in a move described by many as ‘the John Prescott role’.
Also significant is the promotion of senior Blairite Pat McFadden to the Shadow Chancellor of the Duchy of Lancaster and the National Campaign Coordinator – in plain English, he is tasked with running the general election campaign and if Labour wins the election, the machinery of government. McFadden is as Blairite as they get – he was in Tony Blair’s inner circle from when Blair became Labour leader in 1994 and was his Political Secretary in No.10.
The party HQ team McFadden will be working with are similarly minded – Morgan McSweeney, Marianna McFadden and Matt Pound all come from the new Labour school of politics. And his deputies – Jonathan Ashworth and Ellie Reeves – are thoroughly steeped in the moderate wing of the party. These appointments tell us that Labour’s approach will continue to be ruthlessly focused on winning the election and resisting voices that wish to pull the party leftwards.
Government experience clearly counts for Starmer, who knows that the Parliamentary Labour Party is light on MPs elected before 2010. Rachel Reeves, Ed Miliband, John Healey, Yvette Cooper, and David Lammy all kept their roles, and there is a return to the frontbench for the roundly respected Hilary Benn, who has been appointed Shadow Northern Ireland Secretary.
Keir Starmer’s reshuffle has taken many by surprise by the extent of its appointments. With his newly appointed Chief of Staff, Sue Gray, by his side, Starmer’s grip over the Labour Party is the strongest it has ever been. It demonstrates an unflinching commitment to building the best possible serious team to win the next election and his own determination to become Prime Minister. It is in sharp contrast to the government’s latest problems, which sees them under attack for the schools crisis.
Starmer’s Labour Party has a refreshed team of top talent including the much-lauded Darren Jones MP who has impressed many as Chair of the Business and Trade Select Committee. Keir Starmer is a serious leader with a ruthless streak to do what it takes to win. This latest shuffle puts Labour poised with ideas and a skilled team eagerly awaiting the opportunity to serve in a future Labour government.
James Frith Labour Candidate in Bury North
Full Shadow Cabinet
Sir Keir Starmer: Leader of the Opposition
Angela Rayner: Shadow deputy prime minister and shadow levelling up secretary
Rachel Reeves: Shadow chancellor
Bridget Phillipson: Shadow education secretary
Yvette Cooper: Shadow home secretary
Wes Streeting: Shadow health secretary
Ed Miliband: Shadow energy security and net zero secretary
David Lammy: Shadow foreign secretary
Pat McFadden: Shadow Chancellor of the Duchy of Lancaster and National Campaign Coordinator
Nick Thomas-Symonds: Shadow minister without portfolio
Jonathan Ashworth: Shadow paymaster general
Shabana Mahmood: Shadow justice secretary
Jonathan Reynolds: Shadow business and trade secretary
Liz Kendall: Shadow work and pensions secretary
John Healey: Shadow defence secretary
Louise Haigh: Shadow transport secretary
Thangam Debbonaire: Shadow culture secretary
Anneliese Dodds: Shadow women and equalities minister and Labour chair
Steve Reed: Shadow environment secretary
Peter Kyle: Shadow science secretary
Hilary Benn: Shadow Northern Ireland secretary
Ian Murray: Shadow Scottish secretary
Jo Stevens: Shadow Welsh secretary
Emily Thornberry: Shadow attorney general
Lisa Nandy: Shadow cabinet minister for international development
Darren Jones: Shadow chief secretary to the Treasury
Ellie Reeves: Deputy national campaign coordinator
“We are on the side of economic growth”, Labour leader Sir Keir Starmer responded to climate activists as they attempted to disrupt the announcement of policies linked to Labour’s fifth mission: breaking down barriers to opportunities. With a difficult economic backdrop and more tightening to come, it was telling that Sir Keir used the campaigners’ interruption not to address their agenda, but to highlight Labour’s support for business and investment.
In a room packed with students, teachers, union heads, and climate activists, Starmer revealed the fifth and final of the party’s “missions” which, he says, are the building blocks upon which an incoming Labour government would legislate. I was invited to the official launch held at Mid Kent College in Gillingham yesterday morning and stood behind the podium as he delivered his speech.
Over the last few weeks, Starmer and the Shadow Cabinet team have travelled across the country laying out the case for each of these missions. They are (in order of announcement):
Secure the highest sustained growth in the G7.
Make Britain a green energy superpower.
Build an NHS fit for the future.
Make Britain’s street safe.
Break down barriers to opportunity at every stage.
The Guardian’s Peter Walker suggested that yesterday’s announcement, along with the other missions, represent what are in fact some “radical” policies, but carried out in a sensible and reliable manner. Indeed, they are the culmination of Labour’s continued efforts to present themselves as a government in waiting. Starmer’s comment to the climate activists was arguably no surprise. His mission speeches have been littered with references to the importance of business and investment. For business, they provide a variety of avenues through which to engage.
The fifth mission, branded as “opportunity”, contains Labour’s key principles for education policy. Starmer’s speech focused heavily on what he termed the “class ceiling”: the barriers to opportunity which Labour suggest the Conservatives have done little to address. After saying that the Conservatives have “given up” on education policy, Starmer announced that an incoming Labour government would review the national curriculum and include creative arts or sports education until students are sixteen with a review of the way that digital skills are taught.
We are on the side of economic growth
Keir Starmer Labour leader
His pledge that Labour would form a new national body – “Skills England” – to provide more access to post-19 training and introduce a National Skills Plan will be welcomed by businesses who have voiced frustrations at the current government’s apprenticeship levy, the terms of which they have argued in fact prevents them from investing in vocational careers. Starmer’s speech also contained a promise to reform Ofsted and re-iterated the flagship policy of removing tax breaks for private schools to unlock new funding to invest in speech and language classes and hire 6,500 more teachers in shortage subjects.
These are, to many, uncontroversial policies. Starmer avoided making any announcements on tuition fees, high education funding, and teacher’s pay and refused to be drawn into a discussion about the ongoing strikes. Though they do represent the tightrope that Labour is walking – at once attempting to be the party of business and innovation, and also the party of its roots. The policy announcements show Starmer’s attempt to marry the two.
But this has become a hallmark of the Starmerite style. Only intervening where necessary, being exceedingly realistic about the challenges that lie ahead, and managing expectations. He matches the Prime Minister’s steady, quiet progress, not seeking dramatic flair. If the intention from both leaders is to stick to the slow lane, they must out-do one another on policy. While standing on the podium as he gave his speech, it struck me that Labour might have that edge.
Artificial Intelligence (AI) has emerged as a prominent topic of discussion in various spheres, including board rooms, government departments, and regulatory offices.
Yesterday, Hawthorn organised a private breakfast panel, moderated by Emily Sheffield, that brought together leaders from the media and creative industries, government officials, and regulators. The objective of the event was to explore effective strategies for harnessing the advantages of AI while addressing potential risks.
We’re particularly grateful to our esteemed panellists who contributed their valuable insights: Stephan Pretorius, Global Chief Technology Officer for WPP plc; Sophie Jones, Chief Executive Officer at British Phonographic Industry (BPI); and Baroness Tina Stowell, Chair of the Lords Communications & Digital Committee.
Three very important things happened to the internet in the year 2003, exactly 20 years ago.
Skype was launched, introducing us to the wonderful world of internet-based video conferences. WordPress was launched, giving rise to the phenomenon of bloggers, the pre-cursor to the influencer. And LinkedIn was launched, bringing the world of performative online social media networking into a professional setting.
Skype, WordPress, and LinkedIn were a part of the rising Web 2.0 tide, which on the surface put power into the hands of the people, giving Joe Bloggs the ability to ‘influence’ the world with his own content.
For a while Joe really enjoyed having that “power”; he could start a blog about his niche interest in carnivorous plants, connect with other appreciators of the Venus Flytrap, and attend talks by Flytrap experts based in South Carolina from the comfort of his own home in Hackney. Increasingly though, Joe Bloggs would become aware that his well-crafted LinkedIn post announcing his new role at the Royal Horticulture Society was at the mercy of the algorithm, which was at the mercy of a big tech company which controlled who, when, how and how many times his network saw his post. Joe and the rest of us were rudely shaken out of our Web 2.0 dream of digital democracy.
Late last year, LinkedIn raised a few eyebrows when it became public that the company had been running a five-year long experiment on 20 million of its users. The study was an A/B test on LinkedIn’s ‘People you may know’ feature, where half the subjects were recommended strong connections i.e., people who they had a lot of mutual connections with. While the others were recommended to connect with those further outside of their existing network. LinkedIn wanted to understand the impact of the ‘People you may know’ feature on users’ ability to find jobs on LinkedIn. As an aside, the study found that the likelihood of you finding work via LinkedIn is greater if you connect with people who you don’t have as many mutual connections with.
When the findings of the study were released, there was outrage at the ethical implication of “experimenting” on people’s ability to find work. Arguably half the people in the A/B test were by inclusion in the experiment, less likely to find work than the others. But here’s the thing, LinkedIn and a vast majority of the internet is built on proprietary algorithms which are constantly being tested and tweaked based on our use of them. We just don’t think of this constant data gathering and feedback loop as an “experiment”; but it’s something we sign up for in the small print.
Just because LinkedIn is a professional network, which is designed to help users navigate job hunts and build a career does not make it any more or less virtuous to every other digital product that keeps us hooked to a screen, commodifies our content and monetises our data.
The outrage at LinkedIn’s experiment came from the realisation that an algorithm change could impact one’s livelihood. Meanwhile Meta and Twitter have been playing with outrage, addiction, and all manner of base human instinct. This hasn’t gone unnoticed and we’ve started having increasingly nuanced discussions about the potentially harmful impact of social media algorithms and the messiness that comes with unregulated tech development.
For a long time, LinkedIn felt like a clean, professional space. Where you could leave behind the messiness of your real life, stepping over the screaming kids and piles of laundry, into an ironed suit and the polished world of work. But then we started noticing the rise of the LinkedIn influencer – savvy users who have figured out clever ways to write posts which inspire reactions and arguments in the comments.
The growth of LinkedIn and associated work-enabling technologies over the last twenty years have taken us slowly towards a world where it’s harder and harder to separate the screaming kids from the boardroom. Remember the kid who walked into her dad’s BBC interview during the pandemic? Skype made that universally joy-inducing moment possible.
A host of challenges and opportunities have come with this merging of worlds; we’re discovering more of each as we go along, all semi-aware yet unable to escape from the experiment. Question is, do you really want to? Or is the thrill of the ‘like’ all worth it?
But before you answer that question, go share my article on LinkedIn.
We often hear the phrase – ‘your greatest asset is your people.’ This is true in any company; without them, you will fail! But fast growth in businesses can all too often come at a high cost to the people on your team, and it’s hard to grow organically and consistently without some things going under pressure.
In a study conducted for Hawthorn, we spoke to leading executives across high-growth businesses to understand their challenges, the opportunities that exist, and the continued need to put people first.
The findings identified four key areas of focus for fast-growth businesses:
Attracting and retaining talent
Building and maintaining culture
The changing face of leadership
Ensuring effective communication
These are challenges being faced by many organisations, but they are exacerbated by the pace at which businesses are growing.
Attracting and retaining talent
How you treat your people is paramount. People now expect much more from their employers, and so employers must work harder to attract and retain top talent – it’s no longer just about pay and bonuses, they are looking for career growth, a positive work culture, and work-life balance.
A third of respondents said they have experienced challenges attracting talent to their fast-growing company. Over three quarters said they have found employee retention to be more of an issue since the pandemic, with almost a third saying that retaining the right people has been a significant problem for their business.
At the same time, business leaders are facing a subset of challenges created by a multi-generational workplace. Despite the reported challenges with Generation Z fueling the Great Resignation, respondents said that Millennials and Generation X were the two generations they find most difficult to retain, leaving them with skills and experience gaps in their businesses.
Despite all of this, 71% of respondents have not changed their methods of employee retention over the last 12-18 months, which is surprising considering the clear need for fast-growing businesses to retain top talent.
Businesses would do well to now focus on factors that will contribute to workers’ overall experience, and ensure they have an up-to-date and relevant Employee Value Proposition that meets the needs of their current and future talent.
Building and maintaining culture
Building and maintaining culture is reported as a key challenge for fast-growth businesses. This is likely a result of leadership being more firmly focused on growing their business, coupled with the fact that once you’ve surpassed a certain number of employees, your culture begins to change and becomes more difficult to control. This is further exacerbated by workers of different generations bringing their expectations, core values, and ideas of what constitutes a positive workplace culture.
More surprisingly, three-quarters of respondents felt this is an area that is already taking up too much of their time, and they would like to be able to spend less time focused on it.
The changing face of leadership
The findings clearly show that people and culture are two of the main challenges faced by fast growth businesses. They also indicate that dealing with these issues are among the most important roles for leaders in the business. Therefore, it is surprising that only 15% of respondents felt that defining a purpose, vision, and goals were an important role of the leadership team in a growing business. In fact, it was last on the list!
However, when asked what the impact had been of the challenges they faced when growing fast or at scale, 23% of respondents cited poor leadership.
Leaders must work together to meet the needs of the business, building an inclusive and high-performance culture, discussing growth regularly, engaging employees on their journey, and communicating any changes.
Ensuring effective communication
As befits the current and future need for emotionally intelligent leaders, respondents identified communicating at pace as the most important aspect of all the duties of leaders in fast-growing organisations. Additionally, 24% of respondents identified being a good communicator as the foremost quality a good leader should have.
Yet, the findings indicate that this aspect of running a fast-growing business may have been overlooked. Just 15% of respondents said that they have improved communications to address the challenges they’ve been facing as they’ve grown, making this the least common response. This is despite the generational problems they are facing regarding talent attraction and retention, and the fact that 28% have struggled to manage different communication styles in a multi-generational workforce.
Conclusion
High employee turnover and poor communication has an impact on culture that cannot be understated. Indeed, according to respondents, the biggest negative impact of the challenges they are facing centres around culture. Specifically, 25% said they either found it difficult to maintain culture or prevent a toxic culture from developing. Interestingly, only 15% have improved their communications in response to this. Not only do these directly affect a business’s ability to perform, but they could also severely affect its reputation.
Despite the acknowledgment that leadership plays an important role with regard to people and culture, and despite the challenges they are facing in these areas, respondents feel that they cannot afford to spend any more time addressing these issues.
An organisation’s culture is embodied and maintained by its people. Take every opportunity to engage with your workforce, understand them, and capture their views on how the company is performing. Ensure you have leaders with the new skills and capabilities needed to lead and inspire your workforce because effective leadership will help you make the most of the opportunities creating sustainable growth for the future.
Amid all the excitement and potential of business growth, it can be easy to lose sight of what initially made your venture special and set you on the path to success. Recognising and understanding the potential challenges and how to overcome them is essential if your business is to continue to grow and thrive. Not doing so, will continue to have a negative impact on your business as it grows, as it will become much harder to resolve the more time goes by and the larger the business becomes.
If you would like to know more about the findings of our study or how we at Hawthorn can help you identify and address these challenges, then please contact our Head of Employee Communications & Engagement, Sarah-Jane Wakefield at s-j.wakefield@hawthornadvisors.com.
Humza Yousaf was elected the leader of the Scottish National Party (SNP) and First Minister of Scotland on 27th March 2023. Following Nicola Sturgeon’s shock resignation and an often rancorous race, Yousaf, the Health Secretary, defeated Finance Secretary Kate Forbes 52% to 48% in the final round of voting, becoming the first person of colour and the first Muslim to lead the SNP and the Scottish government.
For the SNP, Yousaf’s win is the easiest result in the short-term. Yousaf’s offer of continuity won the support of the SNP establishment. At Holyrood, the pro-independence Scottish Greens have laid aside their threat to discontinue their de facto coalition with the SNP.
Though long a reliable ally of Nicola Sturgeon, Forbes distinguished herself in her unapologetic social conservatism and her belief that “continuity won’t cut it”. Regan – always an outside bet – represented a diminished old guard of hardliners.
After 16 years of SNP government, it’s hard to know how far the offer of continuity can take Yousaf. In the public mind, he is lumped with the struggles of Scotland’s health service. In polling from last week, Yousaf enjoyed net favourability of -20 relative to -8 for Forbes and -24 for Regan.
Forbes has been outwardly supportive of Yousaf. Her decision to leave government rather than accept a demotion, however, strengthens the potentially awkward cluster of conservative SNP backbenchers. The loss of Deputy First Minister John Swinney and Business Minister Ivan McKee could also undermine SNP efforts to build trust among Scotland’s business community. Otherwise, every member of Yousaf’s cabinet served in government under his predecessor.
During the campaign, Yousaf appeared to cool on Sturgeon’s plan to make the next general election a “de facto referendum” on independence. Instead, he insisted on the need to widen support for independence. At the announcement, however, neither Yousaf himself nor any party officials portrayed the incoming leader as the one who would deliver independence.
Yousaf has promised to be the “First Activist”. Unless, though, he makes striking electoral progress for both ‘Yes’ and the SNP, his co-partisans will grow even more restless than under his predecessor.
Following a policy-light campaign, business should keep an eye on proposals from the new government. The Scottish Government’s Programme for Government (the Holyrood equivalent of a King’s Speech) usually comes in September. Reports have, however, suggested civil servants were preparing for an earlier Programme for Government even before the leadership result.
The Programme for Government will provide an important update on cross-border policies such as the deposit return scheme, from which Yousaf promised to exempt small businesses. Yousaf also promised to work with the UK government and other devolved administrations “constructively where I can”. He seems likelier to continue Sturgeon’s approach, treating the UK government with the detachment due a “foreign” government and combativeness due a political opponent.
Scotland’s pro-Union parties appear relieved at Yousaf’s win. Scottish Labour will hope Yousaf’s reputation will help them regain ground in Scotland and, in time, look like a fresh, competent government in waiting. For Conservatives at Westminster and Holyrood, Yousaf’s bullishness provides a ready foil to a robust unionism.
In spite of challenges, the SNP looks set to remain Scotland’s dominant party in the immediate term. The long-term threat to the Union has by no means vanished. In this sense, Yousaf truly is a continuity candidate.
After 15 years of ‘free’ money, we’re now seeing what breaks when interest rates shoot up. Silicon Valley Bank, Signature Bank, Credit Suisse, as well as wider confidence, have all vapourised at speed. It is difficult to say where the next fractures will appear but there are undoubted stresses in the private markets, asset management and real estate and with those who borrowed excessively in the good times. What next and what are the implications for our clients?
Banks will become more boring The irony is that the framework put in place after the last financial crisis has worked well (especially in UK and Switzerland, less so in the USA where some of the new regulations weren’t implemented). Bank resolutions have been for the private sector, the taxpayer hasn’t (yet) been troubled. But in a sense, the regulations put in place since 2008 are fighting the last war. We can expect the regulatory burden to tighten further, a consequent fall in lending appetite, credit will become scarcer and that means slower economic growth.
Less money for more frivolous and ambitious ventures With credit contracting, more marginal start-ups become unviable, fund raising becomes more difficult and we’ll likely see the failure of some fintech, medtech and other businesses. We’ll see greater realism in the commercials of many businesses – cash conservation will be king and a quicker path to profit will become imperative.
Approaching the peak of the interest rate cycle Central Banks have two main roles – to control inflation and to keep order and stability in the financial markets. The ECB ‘chose’ price stability last week and raised rates again. However, the events of the last two weeks will have been very deflationary – and that means the likes of the Fed and Bank of England will not need to raise rates as fast, if at all, to contain inflation. That said, core price rises are still persistent and wage expectations are still rising. While we may have peaked in terms of interest rates, those rates will still remain higher for longer and will not fall as quickly as the market is expecting.
It’s a reminder that risk, in all its guises, needs to be managed and diversified A company should not leave all its cash in one bank – or indeed rely on one bank to provide all its sources of finance. Credit risk, operational risk, market risk all require attention. As does reputational risk – values, behaviours, standards are all under scrutiny. The world is more transparent, more judgemental, and less forgiving on those who get it wrong. The biggest takeaway of all – culture matters.
A toxic culture will eventually be exposed and will be an existential risk for those who don’t manage it.
Getting your comms right matters more Sloppy language, loose lips and ill-judged commentary transmits faster and has more impact in today’s world. One poorly phrased sentence saw 20% of SVB’s deposit base evaporate in 24 hours. The messaging of difficult and bad news should be scripted and practised. Communications needs to be front and centre, not an afterthought. There is less room for error and companies need to invest in getting their messaging right.
I say “no” a lot. As an advisor on sustainability communications, often the recommendation I give to clients is to avoid actively pushing out stories about reducing their environmental impact, setting goals, or investing into sustainability initiatives.
There is a delicate balance between avoiding accusations of greenwashing, and suffering the chilling effects of ‘greenhushing’ – where a fear of potential reputational damage from a backlash can prevent an organisation from taking credit for genuine progress.
Greenwashing is becoming an increasingly serious risk. A few years ago companies could by and large get away with shining a big spotlight on a small win, without facing scrutiny about their wider environmental impact. But the public, journalists, and regulators have become increasingly literate on sustainability issues, and they are rightly able to call out companies making spurious or overbaked claims.
In recent months we have seen the Advertising Standards Authority in the UK come out with formal greenwashing rulings against HSBC and Lufthansa on their climate claims. The EU has just put in place a draft plan that would give companies just ten days to justify green claims about their products before facing potential penalties.
In the US, H&M is in the middle of a class-action lawsuit over providing its customers with allegedly inaccurate environmental scores. And asset managers are frantically working to ensure that marketing for their ESG-labelled funds will comply with the requirements of Europe’s Sustainable Finance Disclosure Regulation.
Companies are now starting to list impacts related to perceptions of greenwashing as a material risk in their annual reports, and banks such as NatWest and Standard Chartered are rolling out training to staff to tackle this. In an anonymous global survey of nearly 1,500 executives at large businesses, 58% privately admitted that their company was guilty of greenwashing.
At the same time, it is important to celebrate companies that are doing the right thing. Change doesn’t happen overnight. The process of transitioning towards a sustainable economy will require a mixture of continuous improvement and transformative action over the course of years and decades. And today the pace of change is still far too slow.
We need to build momentum and shift expectations on what is possible, raising the bar on what good performance looks like for a business. Storytelling and sharing examples of success are critical tools for driving broader action. If you don’t receive positive reinforcement for doing something that can often be expensive and challenging, the motivation to continue your efforts can often drain away.
When deciding on whether or not to communicate sustainability achievements, I typically run through three core questions that will help shape my advice to clients.
Does this make a meaningful difference?
Companies should understand their material issues and biggest areas of impact. If you have massive manufacturing operations powered by fossil fuels, the fact that you have switched your offices onto renewable energy tariffs is not the strongest story.
Do you have the evidence?
Assertions should always be backed up by high quality data, ideally with support or assurance from credible third parties. When Tesco made the claim that its plant-based meat alternatives had a lower environmental impact, it relied on general principles and not specific lifecycle analysis, which led to censure from the advertising regulator.
How does this fit within a broader strategy?
An isolated example of good practice will invite the difficult questions about what is happening elsewhere. Unless you are beyond reproach in terms of your performance (and virtually no company is), it is critical to contextualise action as just another step along the journey towards a more sustainable destination.
There is a need to be cautious about the increasingly acute reputational risks from communicating on sustainability. But as these issues become ever more obvious and urgent, if you aren’t seen as part of the solution then by default you will be perceived as part of the problem.
First you have to actually be doing green things, but if you are then you don’t let greenhushing hold you back – just be careful to get the storytelling right.
Over the last few months, we’ve witnessed a rising wave of strike action and unrest not seen since the 1980s miners’ strikes. Action has been taken by people across several different industries including rail workers, teachers, academics, NHS staff, Royal Mail, Border Force, and the Civil Service staff, with more announced for the coming weeks.
Whilst companies with striking employees will be the most negatively affected, this action is causing concern and disruption across most businesses.
According to economists at the Centre for Business and Economic Research, the strike action is expected to cost the economy close to £100m, with absences among those who cannot work from home and rely on the train network to commute, costing an additional £26m.
With expected long-term disruptions the impact is not just being seen in financial turnovers, the loss of clients, and employee absences, but also in employee productivity, morale, and engagement. Just as businesses are suffering due to these strikes, employees are also struggling with potentially devastating disruptions to their commute, caring arrangements, healthcare appointments, emergency healthcare, and long-awaited holidays.
So, how can organisations support their employees and maintain productivity?
Take a flexible approach
As a result of the Covid pandemic, businesses and individuals alike are generally better placed to cope with ongoing disruption. Moreover, for companies that have adopted flexible working, or are able to introduce some form of flexibility, the impact will be felt less. Enabling and helping your employees to work from home means they can avoid travel disruption, and as a company you can maintain productivity and performance.
Flexible working is not just about location. Providing flexibility in how, when, and where employees work will also lessen the impact of these strikes. With teachers and NHS staff striking some of your employees may be struggling with childcare, caring for loved ones, or navigating moving appointments. Enabling them to adjust their hours of work will show you care and want to support your colleagues, but again means the work still gets done.
Unfortunately, not all businesses can take a flexible approach, particularly those in the hospitality, leisure, and retail industries. In these instances, it’s important to understand the personal circumstances of your employees and find a solution that works for both of you. You may also consider:
Agreeing with employees to take a period of annual leave.
Agreeing with employees that they should use any banked time off in lieu.
Covering the cost of alternative accommodation or transport.
Re-arranging shifts, where possible.
Changing core hours employees need to be onsite.
Taking the time to understand the difficulties your people face and working to find a solution will build goodwill, loyalty, and commitment. Following this, your employees will want to support the business in return, and ultimately performance should not suffer.
Keep listening and communicating
As with any period of uncertainty, disruption, challenge, or crisis, regular transparent communication is critical. Communicating effectively with your people will ensure they understand what is expected of them, what the needs of the business are, and what support is available to them. It’s also important to communicate frequently, as the strike action is a dynamic situation and things can change overnight.
At the same time, it’s just as important to listen and understand how the strikes will impact your people, and provide opportunities for two-way engagement and feedback.
It’s important to remember that for some – particularly in those sectors that can’t easily adopt a flexible approach and whose performance is heavily impacted – this environment can drive concerns around job security. Consequently, line managers have a key role to play in reassuring colleagues, understanding their personal circumstances, and discussing the most effective way the strikes can be navigated for both the individual and the business.
Remember to check-in on your people
Employees may already be feeling stressed, burnt-out, and over-worked. This is only likely to be further exacerbated dealing with the fallout from strikes. Not only is the impact on all of our working lives, but for many it will also be impacting their lives outside of work – causing mental, physical, or financial distress. Parents will be managing childcare arrangements or concerned about how the university strikes are affecting their children far from home; people may be worried about their loved ones’ health with paramedics, doctors, and nurses standing at the picket line; or people may have long anticipated and expensive holidays delayed or even cancelled by the striking border force.
In addition, teams may be under greater pressure if they are having to cover the work of others, whilst leaders will be trying to juggle resources, ensuring client/customers’ needs are being met, and that the business can continue to perform.
Businesses should:
Encourage line managers and colleagues to check-in on each other.
Be empathetic and listen.
Remind colleagues of the well-being support available to them e.g., Employee Assistance Programmes, well-being apps, mental health or financial support.
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By helping your employees’ overall wellbeing, you are in turn protecting, as much as possible, their productivity and commitment to the organisation.
The ongoing strikes have created a difficult economic and social environment for businesses to work in and people to live in. By working together, understanding each other’s needs, and providing an element of flexibility where possible, businesses and individuals can navigate the disruption with limited damage to morale, engagement, and performance.
By Arabella Kofi, Employee Communications & Engagement Executive
Dr Eliza Filby, is an academic, lecturer, renowned author, podcaster, and speaker who specialises in ‘generational intelligence’ helping companies, governments, and services understand generational shifts within politics, society, and the workplace. Eliza has spoken at the EU’s Human Rights Forum on Teenagers and Technology; the Financial Time CEO Forum on the Future of Work, and to the UK’s House of Lord’s Select Committee on Intergenerational Unfairness.
I had the great pleasure of spending some time with Eliza discussing the increasing gap between generations, the multi-generational workplace, and the practical things companies can do to support a multi-generational workforce. Here’s some of the highlights from our discussion.
You can read more about Eliza’s work and her insights at www.elizafilby.com
Q: Eliza, you describe yourself as someone who specialises in ‘generational intelligence’, can you tell us a bit more about what it is you do?
I study society through the prism of age and generations – from Baby Boomers to Generation Alpha – examining how the traditional lifecycle is being reordered and remade in the 21st Century. I think this itself is quite a restrictive analysis and way of viewing society, but it’s a starting point that I use to analyse the different ways in which society is changing in terms of its consumers, its citizens, and its workers.
I’m interested in looking at the way in which the different generations are evolving because we’re not static as human beings. So, what their narratives are, what events, trends, and values have shaped them, and then really how that’s playing out in the workplace, education, politics, the economy, and society as a whole.
Q: It feels like the division between generations has got greater in a way I haven’t felt before. Is this true? If it is, how we begin to the bridge that gap?
It certainly does feel like the gap between generations is greater than it’s ever been and at times that can feel very divisive. However, we are predisposed as human beings to be ageist and if you could create a thread throughout history, the one constant would be that the old have always criticised the young as being lazy, privileged, and entitled.
You bridge the gap by building understanding and empathy across the generations. One of the things that I spend a lot of my time doing is helping companies understand that we are all a product of our time. Different values, technologies, and experiences have really shaped generations and explain why they are the way they are, for example what it’s like for a Gen Z to have grown up with a smartphone in their pocket since they were 13, or for a Gen X woman to have entered the workplace as the only woman in the office, or what it’s like for a Millennial to be the first generation to go to university and then graduate extensive debt and a declining level of opportunity.
Being able to acknowledge that we are all a product of our time and understanding the impact of that is a great place to start.
Q: We are now in a world where we have four, and in some cases, five generations in the workplace, so how should companies be thinking about their workforce?
Research has found that within the workplace you are more likely to make friends with people of a different gender, sexuality, or race than you are of a different generation or age. This statistic is key to recognising not only the importance of age diversity within an organisation, but also the challenge it brings.
Ageism can be a really corrosive force, so it’s important to think about the practical things you can do to bring the generations together, particularly in a hybrid working environment where we are seeing less of each other. The absence of this can fuel greater levels of misunderstanding and prejudice because we’re just not colliding as much.
We really need to think about ways in which the different generations are heard in the workplace and by this, I mean all generations. I’m not a massive advocate for Gen Z boards because you’re giving a voice to yes, the generation that expects it the most, but you’re actually alienating others – particularly older workers who already feel a sense of dislocation and displacement.
You need to consider and encourage not just cross-generational dialogue, but dialogue that gives everyone a voice and enables everyone to listen including multi-generational boards, reverse mentoring, skills swaps, and effective communication.
Q. You mention that hybrid working means we are seeing each other less, what impact is that having on a multi-generational workforce?
One of the challenges with hybrid working is that all the learning through osmosis that used to happen naturally when people are in the same place is just not happening through Zoom/Teams calls anymore.
So much of the older generations’ experience is not being transported down the generations. Therefore, it’s really important not only for companies to bridge the generational gap, but also help up-skill the young by forcing different generations to be in the same room together, so that informal learning to take place.
Whether it’s talking to a client, dealing with a problem, or having an uncomfortable conversation – those things need to be observed if you’re young because that’s how you learn.
But equally, it’s really important that we recognise that you have a generation coming in who for the first time in history, have higher technological skills than the people that are managing them. That knowledge also needs to be passed upwards through the generational chain in the workplace.
So, companies need to be consider how they can develop an educational policy and culture that really encourages cross-generational learning.
Q: We are increasingly living and working longer. What role do organisations have to play in ageing societies?
One of the key areas that organisations need to focus is on how they care for their employees. I have a very holistic and open understanding of what I mean by care. A lot of companies have thought about care firstly in terms of parental leave, maternity leave, and helping parents, but actually if we’re talking about equipping and supporting our workers for the demands of the 21st century, our care responsibilities as individuals are changing. Women are having fewer babies, they are having them later, closer together, and fathers and grandparents are more involved than ever, so do company policies reflect this.
But then also a major responsibility for Gen X and very soon Millennials will be looking after their parents. Do companies have a policy that really is inclusive and helps people look after older people as much as young people and enable them to fulfil those duties? This is crucial, because elder care will be much longer and arguably more disruptive and intrusive to people’s work than looking after children.
Care also includes self-care, which covers everything from mental and physical to financial well-being. So, when companies are talking about care, they need to understand that they are talking about something that is multi-generational and much more expansive than just support for parents or mental health awareness days. This is what employers need to demonstrate.
Q: What causes the significant disparity between generations in the workplace, considering that family is highly valued outside of work? Why is it challenging to reconcile these differences within a professional setting compared to outside of it?
We know that the baby boomer generation are the exceptional generation. They accumulated an awful lot of wealth to the extent that one in five baby boomers in the UK is a millionaire – mostly on paper in property. They own 70% of the nation’s wealth and that money is already trickling down the generations. The bank of Mum and Dad is the sixth largest mortgage lender in the UK and that money is going to their millennial kid and grandparents are supporting their grandchildren. But also, there’s a sense that because we’re living longer, we’ve disrupted what expectations come with a certain age, particularly middle-age and old-age. We therefore feel more in touch with our children, and you’re seeing this with Gen X who are friends with their Gen Z children.
On the family side, the reasons are economic, whilst on the work side they are cultural. There’s a bigger generational gap because of technology, Gen Z are questioning the cultural corporate norms that have existed for Boomers and Gen X. Additionally, Gen Z are looking at Millennials going, you’ve worked really hard…but what have you got to show for it? They’re the generation that will not live by one salary alone and are aware that there are endless possibilities for multiple streams of revenue.
Q: What single piece of advice would you give to any company in how to navigate multi-generational workplaces?
The multi-generational workforce is not going anywhere – it’s the future. Companies need to recognise the new reality, which is we are working longer, we are disrupting the age and stage model of work where before long, if you haven’t already, you will have managers who are 25-years old, managing people over 55. You’ve got a hybrid working model which means generations are colliding less and probably misunderstanding each other more, and a working culture, which I think because of the pandemic, means there are now greater expectations on companies as to what they provide for their employees.
You have to recognise that what worked in the 20th century will not work in the 21st for two very simple reasons. Firstly, technology is changing rapidly and it is changing everything about our lives at an unprecedented pace. Secondly, our ageing society means that the life-cycle is changing and with this comes a whole range of differences, to the 20th century, including different educational needs, and care responsibilities.
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So, the 21st century life cycle really has to be at the forefront of your mind when creating policies for your employees. It’s not about how much can I offer that person or how much flexibility can I give them, but can I give them the support structure they need in order to produce the best work? Can I give them a reason to come into the office. Fundamentally, this means companies need to think about all the things we’ve discussed – understanding, empathy, effective communication, learning and education, and care.
Interviewed by Sarah-Jane Wakefield, Director and Head of Employee Communication and Engagement
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