Indeed, the key early task for Keir Starmer and his Cabinet is to set the tone for what will follow, communicating through actions as well as by words.
So how have they done so far?
Objective 1: Being bold
Governing a country, like running a business, invariably involves strategic balancing acts. For Starmer, the main one is between the need for boldness and the need for stability.
Bold policies are necessary not just to achieve radical outcomes like accelerating the green transition, upgrading the UK’s growth trajectory and restoring crumbling public services. They are also vital for conserving political momentum.
New leaders benefit from fresh energy and the benefit of the doubt. Even though Starmer’s Commons majority means he doesn’t necessarily need people to like his policies, life will be much harder if belief doesn’t accompany agreement.
In business governance terms, the PM (CEO) may have the most non-executive of non-exec chairs (the King) and a board firmly on his side (Parliament). But he also has shareholders (voters) that are extraordinarily capricious, regularly whipped up by troublesome activists (the media) and have opinions of their own, and stakeholders including the IMF, ECB, UN, EU and the markets.
If Labour loses momentum among these groups, then the political cost of capital will rise as they fight every decision.
Keir Starmer is not endowed with the charisma to maintain momentum without actually doing anything — in a vacuum, voters are kinder to Johnsons, Trumps or Obamas than they are to Majors or Browns. So he needs to keep announcing new policies that reinforce a narrative of ambitious vision.
Labour’s planning reforms are the prime example so far — something relatively unexpected that marked a decisive early break from the past.
Most other policy announcements so far were already widely telegraphed: state renewables company Great British Energy for example. So without another bold announcement soon momentum could start to drop off.
Objective 2: Establishing stability
The other side of Starmer’s balancing act is the need for stability, specifically for businesses and investors.
This may seem antagonistic to the need for boldness, but they serve the same goal: to promote growth, and with it the tax receipts to fund other policy objectives.
Businesses have dealt with eight years of moving goal posts under five very different Tory PMs, so simple consistency would go a long way towards making investment decisions easier.
Starmer has other reasons to promote an image of stability, not least the actions of two predecessors: Liz Truss as PM and Jeremy Corbyn as Labour Party leader, who respectively proved the financial and political necessity of playing by the rules.
Chancellor Rachel Reeves, in particular, has shown the bond markets and voters alike that Labour plans to operate under strict fiscal constraints, even if that means frustrating the policy agendas of left-leaning colleagues by, for example, limiting funds for the energy transition.
Reeves has also successfully played the ‘you wouldn’t believe what a mess the last guys left the place in’ card, despite advance protests from the Conservatives, creating space for tax rises or spending cuts later in the year.
The new government has promoted stability in other ways too, by continuing some existing policies. The northern leg of HS2 is still cancelled and the UK’s trade deal with the EU isn’t going anywhere. Even railway renationalisation isn’t really much of a departure, when you consider how many rail franchises had already reverted to public control under the Tories.
Looking ahead
So far, there’s been more stability than boldness. Perhaps that was always the plan to start with, and inevitable over Parliament’s summer recess, with the Cabinet distracted by riots. Maybe there just isn’t the fiscal headroom to be too bold too often, so they’re pacing their announcements.
The danger is that if Labour doesn’t start pushing a few more radical policies, then its big ambitions of unlocking growth or fixing the NHS — and with it, the negative effect of ill-health on productivity — will start to sound empty, and momentum will disappear.
Like running a company, running a state is a tough job, the results of which you can only really judge years or decades later. But so far the PM and his team have done what a turnaround requires in its first days, and kept control of the narrative. We’ll have to wait to see how long they can keep it up.
