As Rachel Reeves addressed delegates at Labour’s first party conference in government for almost 15 years, she twice made reference to a new era of “active government” under Labour. The Chancellor made clear that this doctrine of central intervention would be essential to both drive growth and ensure economic stability in an “age of insecurity”. Active government would be called for, Reeves said, when there are “vested interests, outdated practices, or institutional barriers obstructing productive investment”, a call-to-arms to remove all manners of red tape that could be hindering Britain’s economic recovery.

Less than a day after, the Prime Minister echoed Reeves’ calls for a more agile and interventionist state that would take greater responsibility for the serving of working people. Amidst Starmer’s 10 mentions of the word “control”, the line that got journalists frantically scribbling was the declaration that “taking back control is a Labour argument”. This commandeering of a historically conservative soundbite makes clear that Labour is unapologetically back in the business of active government.

And now to unpack this new principle of governance. Using Labour’s first 80 days and their wider legislative agenda, we have considered what active government really entails, and how it could guide the operations of a new government yearning to deliver a resurgent and robust economy.

The key policy area where we have already seen a decisive removal of red tape is planning reform. The Government’s proposed changes to the NPPF redefine unproductive areas of the greenbelt (“grey belt”) which could be released for development, removed the de facto ban on onshore wind development, and recalibrates the methodology for calculating local housing need. However, perhaps the most evident display of active government is through the reintroduction of mandatory housing targets. In a speech at conference to the Fabian Society, Housing Minister Matthew Pennycook said that he was prepared to use all available powers of central intervention to ensure that the new targets “bite.” This is a clear statement of intent to councils that have been resistant to much-needed developments. The Government has identified the supply of housing and renewable energy infrastructure as core drivers of both national and regional growth, and as such, we are likely to see a continued effort to remove the “institutional barriers” that stand in the way.

The principle of active government has also been displayed through Labour’s attempts to reinvigorate Britain’s capital markets and re-establish private investment as a core driver of growth. In July, Reeves lauded the Financial Conduct Authority’s overhauling of listing rules, saying that the changes would ensure that “we attract the most innovative companies to list here”. She said that these reforms, which seek to boost the appeal of London floats, will supplement the other centerpiece of the Government’s activity on private investment, the National Wealth Fund (NWF). The NWF will seek to act as the catalyst for unlocking private capital to invest in the UK’s “world-leading green and growth industries”, beginning with an initial allocation of £7.3bn through the UK Infrastructure Bank. Looking onwards, business leaders will need to keep their ears open for announcements at the International Investment Summit next month, where Labour’s doctrine of intervention to remove barriers to private investment will undeniably receive more airtime.

The Prime Minister’s address gave cause for competition policy enthusiasts to awake from their conference slumber. Starmer acknowledged that while “competition is a vital life force in our economy… markets don’t give you control – that is literally their point”. It has long been recognised that a UK competition regime under Labour will see strengthened regulatory powers to protect consumers from market dominance or cartel behaviour, but Starmer’s comments conveyed a much more encompassing ideology of intervention when it comes to UK markets. As forecasted in our May 2023 report Making Markets Work, it appears that a Labour government will be more active in re-establishing a tangible sense control over the UK economy.

Reeves’ speech also featured some less-than-subtle clues about another potential policy area where Labour could demonstrate active government – skills. There is undeniably a shared feeling in central government of unlocked national capacity, or as Reeves put it, “potential held back”. Less than 12 hours after the Chancellor lamented to conference that too many people are left without “the skills, training and security they need to fulfil their potential”, Skills England published their inaugural report on Driving growth and widening opportunities. The report makes clear that expanded skills provisions are critical to stimulating economic growth, attributing a third of productivity improvements over the last two decades to improvements in skills levels. More crucially, it outlines how Labour plan to demonstrate active government within this space, which will commence with reports of “authoritative analyses of national and local skills needs.” This will be followed by an identification of the training for which the new growth and skills levy will be accessible for. Labour has made clear that central intervention is needed to kickstart the process of reinvigorating local economies through enhanced skills provisions, and hopes to bring together local government, businesses, training providers and unions on that journey.

Stimulating economic growth through a centralised removal of red tape is hardly a novel strategy from government, but this messaging from Labour feels different. There is clearly a deeply held contention in Downing Street that institutional barriers are preventing Britain from unlocking its potential, and that a more engaged and active government is the necessary antidote for this gridlock. While we have identified planning, skills and private investment as key spaces to yield a more active government, Labour’s mission led approach to be the party of “wealth creation” and to structurally remove barriers to opportunity will surely lead to more interventionist policy across the board. Watch this space.