Britain at the ballot box

Lisa Raitt: Thank you for tuning in to The Raitt Stuff. I’m your host Lisa Raitt and in this podcast I’m going to share insights on current hot topics in the areas of public policy, politics and business, with some guests along the way. And welcome back to The Raitt Stuff. I think I’ve mentioned before on the podcast that this is a very unique year in terms of how many countries are actually going to the polls. The United States obviously is going in November. Mexico has gone to the polls already. France is in the middle of an election right now. And most recently we had the United Kingdom election, which returned as predicted a strong majority for a Labour government booting out the Conservatives. There’s going to be a lot of ramifications coming from it, especially since there was such a strong message of change that was sent by the electorate. And I have somebody with me today who is very well versed in what it’s like to have a change in government, but more importantly, while she has worked in the oil and gas and clean tech sectors in Canada, my guest today has spent most of her career in the UK working as a senior bureaucrat in the administrations of Tony Blair, who is a Labour Prime Minister, Gordon Brown, who was again a Labour Prime Minister, and David Cameron, who is a Conservative Prime Minister. With me today is Amber Batool, who is an Executive Director at Capital Markets here at CIBC and a very close colleague of mine who I’m proud to work with every single day. Amber was a speechwriter to the Finance Minister in the UK, was also Chief of Staff to multiple senior ministers, including she was part of the early transition team for Deputy Prime Minister, Nick Clegg. Amber has a law degree and a postgraduate diploma in law as well. Amber, welcome to The Raitt Stuff.

Amber Batool: Thank you and it’s great to be here Lisa.

Lisa Raitt: I really appreciate you being here. As we were approaching the UK election, you and I had a number of conversations because we knew this was going to have impacts on geopolitics, but as well on very real decisions being made with respect to investments. So having watched what happened, can you give me some of your key takeaways from the UK results?

Amber Batool: Absolutely, and as you said Lisa, you know when Rishi Sunak made that surprise announcement to hold a general election on the steps of 10 Downing Street in the pouring rain, it was never a question of whether the Conservative Party would lose, but rather by how much. And now we’ve seen that Labour has won this historic landslide and for Conservatives this is the worst defeat in their history. The markets, and I actually think the electorate, are now really hoping for a period of stability. The typically smaller parties did really well, with the Liberal Democrats, the Green Party, and the Reform Party having their best ever results, the latter standing on a platform of anti-immigration, which is something to watch. How did this happen? Well, to paraphrase Hemingway, gradually, and then all at once. You have to remember the Conservatives won a pretty good majority in the last election in 2019. But the steady drip of scandals and events, particularly the disastrous mini budget of 2022, really caught up with them after 14 years in power. I would add, though, that we saw one of the lowest ever voter turnout, and we see significant volatility in the electorate. So I don’t think any party, in my opinion, can take future voting intentions for granted. And as for the new prime minister, Keir Starmer, he’s a Former Barrister and Chief Public Prosecutor. This huge majority, I think, presents an opportunity for him to push his mandate through with some ease.

Lisa Raitt: Were there any surprises for you, Amber, in terms of people who lost in the election? I know that when I ran in 2019 and I lost, I was one of the ones that people talked about in terms of losing. Anyone of note?

Amber Batool: I mean, there were, I think, 11 cabinet ministers who lost their seats, most notably Liz Truss, the former very short-lived Prime Minister of the UK. We also saw a number of independents take seats from Labour, mostly standing on single issues, and in this case, the Israel-Hamas war. And the Green Party, for the first time, they got four seats. Won’t be talked about a lot, but I do think that’s pretty significant.

So Amber, was there a surprise when Jeremy Corbyn won a seat?

Amber Batool: I think it was to some degree expected. He is a very long-standing MP in that constituency. He has an enormous amount of power, but he did take the Labour Party to their loss in 2019. And it was seen as something of a catastrophe at the time, given what had happened with the Conservatives to that point. I think this shows that Keir Starmer has a lot to do in terms of keeping the different factions of his party together. So I don’t think a huge surprise, but it will have implications for how they govern.

Lisa Raitt: Yeah. Obviously you were part of the transition from a Labour government. Well, actually there’s always transition, right? Even if it’s a Labour Prime Minister to a Labour Prime Minister, there’s always some level of transition. But what is the change in government going to look like from an inside point of view? What should we be looking for? How quick will they be able to act?

Amber Batool: Such a great question, Lisa. I think the speed of transition of power in the UK, it’s almost brutal, practically instantaneous. I remember in 2010 when I was in the Cabinet Office, we had about an hour between Gordon Brown leaving and David Cameron arriving, which makes this some really quite spectacular choreography. But you do do a lot of planning in advance. You’ve got civil servants reading manifestos for all the major parties. When I was in the Treasury, I was part of the meetings, which were entirely confidential that we had with the Shadow Chancellor to talk about everything from logistics for his potential new staff to areas of interest. You’ve got briefings on key department areas, decisions that need to be taken. And so in the first few hours and days, these new ministers will be taking meetings with their private office, senior bureaucrats and others. And they will get to work almost straight away because the machinery of government, it keeps moving regardless of which political party comes in. And given that this was a fairly expected outcome, they will have been working and reading and looking at what Keir Starmer and his chancellor want. Should mention the first female chancellor in the history of that office. And, you know, it’s going to be, I think, almost instantaneous. But the Prime Minister, he’s going to start by taking congratulatory phone calls from world leaders. These are set up in advance because they happen whoever wins. And the new leaders always love these. I remember President Obama spoke to David Cameron, and then we set up a phone call between Nick Clegg and Vice-President Biden. And after the call, he came out to the office to tell us. And we’re like, we already know because all these ministerial calls of that nature, we’re listening in. And I think for new ministers, that takes some adjustment. But you quickly get used to the rhythm of a new administration. And I think for this new administration, they’re really going to hit the ground running.

Lisa Raitt: Unlike in Canada, where you wait for a couple of weeks for the Prime Minister to interview candidates and finally name a cabinet, it happens pretty quick in the UK, doesn’t it?

Amber Batool: Yes, it happens on the morning of the next day. So the general election took place on Thursday, Friday morning, you have the new cabinet coming up the steps of Downing Street and going in, being told what their portfolio is, and they almost immediately go to their new ministry and start working.

Lisa Raitt: That’s amazing. I mean, once you do get named a cabinet minister, you do go to your ministry to start work, but to have it happen the day after your election is quite breathtaking. Curious to know what your thoughts are around the new minister who’s going to be associated with energy transition Ed Miliband, because I heard him say prior to the election that the ban on offshore wind was going to be reversed almost instantaneously.

Amber Batool: Absolutely, and I think this is going to be a super interesting file to watch. I think it’s worth remembering that for the Labour Party, their first priority is to deliver economic stability, and they have said they’re going to follow the strict fiscal rules that the government already had in place. They do say economic growth will be their mission, but this is the lens from which I think we need to approach their green initiatives. They have said they want to make UK a clean energy superpower, energy security is a big priority, and job creation in the energy sector. What they have said that they will create is something called Great British Energy, which is a new publicly owned firm that will provide additional capacity alongside the private sector to help establish the UK as a clean energy superpower. They also want to create a new clean power alliance, bringing together a coalition of countries at the cutting edge of climate action. And then in terms of what you said, they’ve said they want to decarbonize most or all of electricity by 2030, drive up EV usage and ramp up solar and offshore wind. They have said that oil and gas will be a key part of the energy mix for decades to come. So while they won’t approve any new projects in the North Sea, they will honor all existing oil and gas licenses. The new Prime Minister knows that a lot of voters care deeply about the environment and he’s not going to want to alienate them. But at the same time, with the country’s spluttering economy, he’s been really reluctant to be seen to be making unfunded spending commitments on anything. Indeed, they actually reversed a much more ambitious climate policy from 2021. And he said at the time he did that because of the weak economy, elevated borrowing costs, and limited fiscal headroom. And so what they have promised, the creation of something called the National Wealth Fund, is significant commitments to new gigafactories, carbon capture, and the manufacturing of green hydrogen. I think with this and with other key policy areas, the devil is going to be in the detail, so we will wait to see what they’ll be able to achieve.

Lisa Raitt: This will be really interesting because it sounds exactly like the things that the United States is seeking to do. It sounds exactly like the things that Canada is seeking to do with respect to clean energy and clean technology. So it’s going to be a competitive landscape, won’t it?

Amber Batool: Absolutely, which I think is a great thing for the climate.

Lisa Raitt: That’s true. What about trade? What can we expect and anticipate when it comes to trade?

Amber Batool: So I think here what they want to do and what they’re able to do are going to be two quite dramatically different things. They do intend to publish a trade strategy and to work to get UK business access to international markets, but we haven’t mentioned the B word yet. And Brexit has had a profound impact on their ability to trade with the European Union. Labour has promised to stay out of the EU. There’ll be no return to the single market, the customs union, or the freedom of movement of people but they will have said that they will work to improve the UK’s trade and investment deal with the EU by removing unnecessary barriers to trade. Not sure how that one’s going to work out for them. They do intend to seek new trade agreements and standalone sector deals on things like digital. They have said that they will work to lead international discussions to modernize trade rules, particularly through the World Trade Organization. They support the implementation of the OECD global minimum rate of corporation tax and they also back international efforts to make international tech companies pay their fair share of tax. But I do think this is going to be a really tricky file for them to execute on.

Lisa Raitt: Yeah. What about in terms of the geopolitics, Amber? Is this going to be a market difference from dealing with like a David Cameron who was the Foreign Minister or from a Rishi Sunak for their counterparts like when they go to the G7 for example?

Amber Batool: Such an interesting question. I think whether we like it or not, Brexit, in my opinion, has really diminished the UK’s international standing. I think about their relationship with the US. I don’t think we go back to the Halcyon days of the special relationship we saw with Thatcher and Reagan or Blair and Bush. I mentioned the call earlier between Cameron and Obama, and there was such relief among my colleagues when President Obama made a reference to the special relationship. So even back then we knew things weren’t where they used to be. So I do think Keir Starmer will work on trying to continue that relationship. I think maybe four areas I’d possiblyhighlight in terms of where they go next. First, they’re not going to change their policy towards Ukraine. Labour had pledged to maintain Britain’s military, financial and political support for Ukraine. That includes a clear path to NATO membership. Secondly, they have said that long term peace and security in the Middle East is going to be an immediate focus. They have said the commitment to NATO is the cornerstone of European global security is unshakable. Linked to that, they have said they want to build stronger ties with the G7 and Europe, which I think, you know, Keir Starmer is going to try very hard to do. And then finally, on India and China, they’re going to seek a new strategic partnership with India, including a free trade agreement. And on China, they’ve said, and I quote, we will cooperate where we can, compete where we need to and challenge where we must. So I think there’s a lot of rebuilding. There’s a lot of trying to let allies know that there’s a more stable government in place for now. Does that really change things? At the moment, I doubt it.

Lisa Raitt: So interesting times ahead for all of us.

Amber Batool: Indeed, lots to watch.

Lisa Raitt: Now you may have heard some background noise while I was speaking with Amber. I am actually sitting in a hotel room recording this podcast on Friday morning, the first day of the Calgary Stampede. So what you’re hearing is the parade as it goes on by the window. So I apologize if you’re hearing some train whistles as we went by. I really appreciate Amber, you taking the time to be with us today. You know, the United Kingdom is such an important party with respect to trade with Canada as well as a competitor when it comes to clean tech. And here at CIBC, we seek to serve all of our clients wherever they may be, including in London. And I know that your perspective is going to be very well taken and well enjoyed. If you as a client have any interest in hearing more about what Amber and I have with respect to geopolitics, just reach out to your relationship manager. We’re always happy to have a phone call or discussion on anything that you may have questions or concerns about. As I said, it is a remarkable year with a lot of geopolitical turnover and Amber and I are keeping tabs on everything that’s going on. So thanks once again, Amber, and thank you to you for listening in. Thanks so much for tuning in. Now, if you have any questions or comments or even requests on topics to discuss, drop me a line at [email protected]. Your interactions actually will make this better. I’m your host, Lisa Raitt, and this has been The Raitt Stuff.

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