US private equity giant Blackstone snaps up 1,700 homes from Vistry as it drives to become major UK landlord
Blackstone and Regis Group have inked a deal to buy 1,700 homes from developer Vistry.
The private equity firm and its joint venture partner Regis will shell out £580m for the portfolio of new build homes across the South East of England.
Vistry is in the process of selling off old properties from its house building arm, following a decision by the business to focus on becoming a solely affordable property developer.
The first completions under the agreement are expected by the end of June 2024, with the majority of homes expected to complete within the next two years and would be managed by Leaf Living.
James Seppala, head of European real estate at Blackstone, said: “Institutional private capital can play an important role in providing high quality housing stock across the UK, particularly in the private rented sector which is significantly under supplied today.
“Partnerships such as these can meaningfully accelerate the delivery of new homes and help alleviate structural undersupply across the sector.”
Back in November, Vistry offloaded 2,800 to Leaf Living and Sage Homes. Two companies which Blackstone has a stake in.
Greg Fitzgerald, chief executive at Vistry Group said:“By working in partnership with organisations like Leaf Living we can maximise the number of high-quality homes we deliver every year.
“This agreement supports our differentiated business model, with the certainty provided by the pre-selling of homes enabling us to accelerate our build programmes, guarantee work for our supply chain, reduce sales and build costs and create vibrant new communities.”
“This year we are on track to deliver more than a 10 per cent increase in new home completions, playing a key part in helping to address the UK’s acute housing shortage.”
Last October, the FTSE 250 firm said it would focus solely on building affordable homes via its Partnerships business. This partners with local authorities and other social housing providers after a volatile housing market eroded demand for building in the private sector.
The company said it predicts half year and full year profit to be ahead of last year and “remains confident” in achieving £800m operating profit in the medium term.
Gooch and Housego optimistic despite headwinds
Photonics engineering and manufacturing firm Gooch and Housego (G&H) has held its guidance for the year and remains optimistic despite revenue falling slightly.
The Lonodon-listed firm said the figure declined by 1.4 per cent to £63.6m over the six months to March due to customer destocking in industrial and medical laser markets.
Statutory profit before tax also came in at £0.3m down from £3m recorded in the same period the year before.
Gooch and Hosuego said its order book remained strong at £115.8m, up slightly from £115.3m recorded the year before, and “continues to grow, substantially de-risking second half revenue”.
Charlie Peppiatt, chief executive officer of Gooch and Housegeo, said: “Despite the reduced demand in our industrial and medical laser markets persisting longer than expected, the medium term outlook remains positive underpinned by a strong order book and healthy pipeline with the group well positioned to benefit from increased demand levels as a result of operational and supply chain improvements.
“The market dynamics for G&H’s technologies and capabilities remains strong in all our target sectors supported by the focused progress the group has made to establish the foundations to accelerate the delivery of our strategy.”
Shares in the company fell by nine per cent in early trade.
It follows a report in February that the company would have to revise its earnings for the year due to prolonged inventory adjustments among its customers.
Speaking at the time, the board of Gooch and Housego, said: “The group’s trading for 2024 is expected to be more weighted to the second half and profit growth for the full year to be lower. Adjusted profit before tax is anticipated to be circa £3m below management’s previous expectations.
“Given the strong medium term customer demand demonstrated by a growing order book, recent operational improvements and the group’s strategic focus, we believe we remain extremely well placed to respond quickly and benefit as several key end markets recover.”
More retail misery as Brits’ spending shrinks to lowest level in three years
May proved to be another miserable month for retail, as cash-strapped Brits said no to treating themselves in the face of rising bills and unfavourable weather.
Spending on debit and credit cards grew by just 1.0 per cent in May, according to new figures by Barclays, making it the smallest rise since February 2021 and below inflation which sits at three per cent.
The nation’s already stretched budget tightened in April as water and broadband bills rose.
Fast food, which has remained a resilient market amid the cost of living crisis, saw its first monthly decline since the pandemic, dropping by 0.2 per cent.
Restaurants were also dealt another blow, as spending on dining out fell by a staggering 15.7 per cent in May, against a 13.3 per cent drop the previous month.
Jack Meaning, chief UK economist at Barclays, said: ”The economic strength we saw in the first three months of the year was always expected to ease as we moved into the second quarter, with GDP having seen the extra bounce needed to recover the ground lost in last year’s recession.
“The underlying direction of travel remains though, with falling inflation, real income growth and low unemployment all pointing to a gradual acceleration in consumer spending over the next 12 months, especially as we begin to see the Bank of England reduce interest rates in H2.”
This comes as some 41 per cent of shoppers told Barclays they plan to re-wear more of their old summer clothes this year and 29 per cent are cutting back on shopping for their summer wardrobe due to cost-of-living concerns.
Overall retail spending fell -0.4 per cent – the biggest drop since September 2022 – with in-store spending (excluding groceries) and clothing sales dropping by -2.6 per cent and -1.0 per cent respectively.
Not all bad news, though
Some categories, though still in decline, showed signs of recovery last month.
Furniture stores saw their smallest decrease since last August, while home improvement and DIY stores had their best performance since last September, declining by 5.4 per cent
Barclays said this was likely due to “homeowners capitalising on the two May bank holiday weekends to spruce up their living spaces”.
A separate report by the British Retail Consortium (BRC) showed non-food sales decreased 2.4 per cent year on year over the three-months to May, against a growth of 0.7 per cent in the same period last year.
Helen Dickinson OBE, chief executive of the BRC said: “Despite a strong bank holiday weekend for retailers, minimal improvement to weather across most of May meant only a modest rebound in retail sales last month. Although non-food sales fell over the course of the month, the long weekend did see increased purchases of DIY and gardening equipment, as well as strong clothing sales.
“Growth in computing sales reached their highest levels since the pandemic, with many consumers continuing to upgrade tech bought during that period. Retailers remain optimistic that major events such as the Euros and the Olympics will bolster consumer confidence this summer.”
Unseasonable weather has been an ongoing problem for some of the UK’s best known retailers, hindering a number of companies’ earnings in the past year.
It comes amid fears that the UK could be hit with 50 days of rain over the summer months, making it the wettest on record since 1912.
Marks and Spencer chief’s pay soars to decade high as turnaround pays off
Marks and Spencer’s CEO has received the highest pay package in over a decade, as the high street darling’s turnaround strategy has paid off.
Boss Stuart Machin, who took the reins two years ago, was handed £4.7m this year, up significantly from the £2.7m he was paid last year.
Machin’s packet also remains higher than his predecessors Steve Rowe and Marc Bowland who were paid up to £2.6m a year over the past 10 years, the retailer’s annual report has said.
Co-chief executive Katie Bickerstaffe, who reported to Machin and will step down in July, was paid £4.4m, including a salary of £767,000 for the year to the end of March, and also qualified for “good leaver” status.
Bickerstaffe, the retailer’s first female boss, helped run the show alongside chairman Archie Norman and frontman Stuart Machin, who was appointed at the same time as her.
She will depart Marks and Spencer to become a non-executive director at B&Q owner Kingfisher.
“She has had an important role in overseeing a marked improvement in the performance of the business and moves on with our best wishes,” chair Archie Norman said on Monday.
Reports of the hefty handouts follow a bumper year for Marks, which reported a 58 per cent jump in profit before tax for the full year.
The Percy-Pig maker also said it would restore dividend payments after it delivered its best results in almost three decades.
Its continued success in a tricky retail environment highlights the success of chief Stuart Machin and chair Archie Norman’s turnaround plan – which included overhauling its store estate and selling more trendy clothing.
Marks and Spencer also plans to invest over £30m in new stores across London, amid a period of heightened popularity for the 140-year-old brand.
TGI Fridays owner Hostmore shutters another cocktail bar amid sales slump
TGI Fridays owner Hostmore said sales fell this year and confirmed the closure of another cocktail bar just three years after its launch.
The business behind the American style diner said its two remaining 63rd 63rd + 1st site in Scotland would close at the end of the month.
It follows the closure of two other venues across the UK after the group struggled to keep the bar and restaurant afloat.
The business launched the spin off in 2021 and it offered a slightly more refined dining experience compared to TGI Fridays.
It comes as the publicly listed chain unveiled a 10 per cent decline in sales over the 20 weeks to May but continues to perform ahead of 2023, with the first four months to the end of April higher by £3.3m.
The firm currently operates 89 TGI Fridays across the UK and employs approximately 4,380 staff.
Hostmore said the removal of the sites would help improve its earnings for the year ahead.
In April, the firm agreed to a £177m all-share takeover of the US based TGI Fridays, Inc.
The agreement will lead to Hostmore shareholders holding a 36 per cent stake in the enlarged business with TGI Fridays shareholders having 64 per cent.
At the time, Stephen Welker, chairman of Hostmore, said the deal “would reunite two businesses that are a natural fit, and were one business until as recently as 2014″.
“Hostmore has made good progress in executing its turnaround strategy over the past year by reducing costs, revising our capital allocation policy to focus on debt repayment and shareholder distributions.
“This acquisition would give us the scale and flexibility to accelerate our existing strategy and enhance the financial outlook for Hostmore and scope for shareholder returns, while also strengthening our ability to provide an exceptional guest experience by harnessing our distinctive, trusted brand as the home of celebrations.”
Harley-Davidson sues Next over alleged rip off its biker label
Harley-Davidson is suing Next in London’s High Court over claims one of the retailer’s T-shirts has ripped off its logo.
The US motorcycle maker has alleged the children’s garment, which features biker angel wings and, infringes on its trademark, a report in the Financial Times said.
In a lawsuit filed last month, the company said the piece “essentially replicates” the outline of its logo and also features “graphic material and text which is . . . commonly seen in the context of a motorcycle-based branding and more specifically the claimants’ branding”.
Harley-Davidon said the FTSE 100’s design “gives rise to a likelihood of confusion on the part of the relevant average consumer”.
The children’s garment, available aged three to 16 years, retails for between £6 to £8.50, according to Next’s website.
According to the outlet, Harley-Davidson is seeking a declaration from the court that “Next has infringed its trademarks and an order that it destroy “all infringing materials”. It did not quantify damages.
City A.M. has contacted Next and Harley Davidson for comment.
Next is one of the UK’s biggest fashion brands, which owns both an own-label clothing range and several third-party brands.
Harley-Davidson, which was first founded in 1903 and is best known for manufacturing motorcycles, has in recent years launched a range of casual clothing.
Alongside motorcycle gear, it sells both womens and mens jackets and t-shirts and trousers for everyday wear.
A tank top retails for £49, while a jacket costs upwards of £200.
It has won a number of trademark battles in recent years. In its recent annual report it said it has a “a vigorous worldwide program of trademark registration and enforcement to maintain and strengthen the value of the trademarks and prevent the unauthorised use [of them]”.
Pubs with rooms drive up revenues at London and south west pub group
Pub owner Liberation Group has revealed “record” sales for the year, helped by growing demand for its accommodation services.
The hospitality business, which has over 130 pubs and inns across the UK, said revenue rose 20 per cent on last year’s figure to £144m.
Sales in its accommodation offering also grew 11.6 per cent, helped by the launch of Butcombe Boutique Inns.
Jonathan Lawson, chief of Liberation Group, said that 2023 was a “standout” year for the business, and set sights on expanding its room offering by 300.
“We should remind ourselves that in 2016 we only had 10 rooms and now we have over 400, with the potential to achieve 700 in the existing estate as our accommodation offering increasingly forms a substantial lever for our overall managed business,” he said.
“This performance is undoubtedly a differentiator for our group when we look at the wider performance across the sector.”
The business, which has venues across London and the the south west, also noted growth in the breakfast and brunch market as it is a cheaper way to dine.
Liberation said: “Market data shows that over half (55 per cent ) of British adults are dining out for breakfast at least twice a month, whilst a quarter of us (25 per cent) go out for breakfast every week as it is increasingly seen as a more affordable way to treat family and friends.”
“We are witnessing a growing opportunity in the breakfast and brunch market and will continue to develop this offering in our estate of 42 inns and other selected locations.”
The firm, which is owned by Caledonia Private Capital, said it made a “solid start” to the new financial year.
Like-for-like sales across its managed pubs in the 13 weeks ended 27 April 2024 were up 6.5 per cent,
The pubs it acquired from Cirrus Inns in 2022, performed the strongest up 10.4 per cent on a like-for-like basis.
The Notebook: Rishi’s fixation on the grey vote could cost the party its entire future
Where the City’s movers and shakers have their say. Today, James Chapman, director of Soho Communications, takes the Notebook pen
Rishi’s punt on the grey vote will prove a misstep
Polls are ten a penny in election campaigns, but one from YouGov the other day rocked me back on my heels. It found that among the under-50s, 59 per cent are planning to back Labour, with the Greens in second place on 12 per cent and the Tories languishing in equal third place with Reform, both on just eight per cent.
The Tories have always performed most strongly among older voters, but this dismal level of support among the under-50s suggests the threat to the party’s existence is now existential. It’s depressing, therefore, that since Rishi Sunak surprised Westminster by calling an election months earlier than planned, the Conservatives have concentrated on seeking to shore up their core pensioner vote.
It’s depressing, therefore, that since Rishi Sunak surprised Westminster by calling an election months earlier than planned, the Conservatives have concentrated on seeking to shore up their core pensioner vote.
Unsurprisingly, the pledge/threat to bring back a limited version of national service appeals much more to older people who wouldn’t have to do it than it does to the young. Likewise, the promise to increase the income tax threshold for pensioners is a blatant pitch for the grey vote. It is also fiscally irresponsible, when the existing triple lock on the state pension is barely affordable as it is.
The Tories may see it as common sense – or indeed their only option – to concentrate on this cohort, since those aged 60 and over are traditionally the most likely to vote and to vote for them. However, pollsters say the age at which voters are more likely to vote Conservative than not is increasing all the time, with one recent survey identifying the crossover point as 70.
Given this backdrop, the party’s disregard for voters under the age of 50 looks reckless. It is particularly odd when Sunak might have used his position as the country’s youngest prime minister since 1812 to seek to appeal to a younger audience.
Instead, it is Labour which is producing bold policies on housing, NHS dentistry and waiting lists and votes at 16 designed to appeal to the under-50s. With evidence that younger voters have turned overwhelmingly against Brexit, Labour has even flirted (extremely gently) with the idea of a closer relationship with the EU.
If the Tories keep failing to even try to engage with anyone who isn’t in or past their sixth decade, they shouldn’t be surprised if they not only lose the upcoming general election but struggle to win one ever again.
The surveillance state is stepping too far
The UK already has some pretty extreme limitations on protest for a liberal democracy, but Lord Walney’s review on so-called ‘political violence and disruption’ for the government suggests going further.
The former Labour and independent MP, nominated for a peerage by Boris Johnson, suggests extending covert surveillance powers for police to help them prevent disruption by protesters and a mechanism for businesses to sue protest organisers. Lord Walney insists that his proposals wouldn’t have affected, say, the Suffragettes or the Iraq War protests, but it’s hard to reconcile this with his conclusions. His report deserves to gather dust on a Whitehall shelf.
Too rich to be PM?
Is Rishi Sunak simply too rich to be effective in Number Ten? The personal fortune of the PM and his wife, Akshata Murty, has increased by £120m, according to the annual Sunday Times rich list. At a time when millions of Britons were struggling with the cost of living, Sunak and Murty’s wealth was estimated at £651m in the latest list, up from £529m in 2023.
A rather unusual funeral
In the Hampshire village of South Baddesley recently, an unusual funeral was held for an unknown man who died half a millennium ago. Thought to have been in his early 20s, and identified as a potential murder victim from the way his body had been buried, the 16th century man’s remains had become exposed on a nearby beach.
Fifty mourners turned out and local funeral directors provided free flowers and a handmade wooden casket. It struck me that the effort gone to for “the funeral and burial of the 16th-century man known only to God”, as the order of service put it, was somehow a mark of our civilisation.
Come on you Saints!
I have enjoyed watching my team Southampton’s spectacular return to top-flight football in recent weeks. Somehow promotion is all the sweeter having achieved it through the playoff finals. On any measure, Russell Martin has done an extraordinary job at St Mary’s. Despite the departure of standout players such as Ward-Prowse, Tella, Livramento and Salisu, he regrouped, encouraged a new possession-based style and delivered a 25-game unbeaten run. Now we have marched back to the Premier League. Come on you Saints!
Coffee Wars: Inside the race to become London’s number one chain
Coffee has played a vital role in reviving Brits for centuries. Despite feeling like a relatively new phenomenon, the first record of a coffee house in England dates back to 1652 and was said to be opened by a Turkish Man named Jacob in Oxfordshire.
In the same year, London also welcomed its first coffee shop, launched by a Greek man called Pasqua Rosee at St Michael’s Alley, Cornhill. Historians have argued that the coffee of this time period was not very palatable. However, its energising effect was enough to get the public hooked.
These ancient coffee houses also played a vital role in forming some of the capital’s most iconic businesses.
The London Stock Exchange had its beginnings at Jonathan’s Coffee House where the City’s forefathers would meet and set commodity prices. Lloyd’s of London also had its origins in Lloyd’s Coffee House on Lombard Street.
‘It’s part of the fabric of society now, it’s not going away’
Fast forward to the 21st century, and coffee is now a multi-million pound industry in the UK. There are currently over 10,199 branded coffee shops open across Britain, and it is expected the figure will outpace the number of pubs by 2030.
Jeffrey Young, founder and chief executive of Allegra, a business insight firm following coffee trends, told City A.M. consumer demand for high quality coffee seems to be “ever increasing”.
“[Coffee Shops] are part of the fabric of society now. It’s not going away,” he said.
It has been forecast the total branded coffee shop market will exceed 10,500 outlets by January 2025, and more than 11,600 by January 2029.
Research by Allegra found the branded coffee industry grew 9.2 per cent in the 12 months to January and is now worth a whopping £5.3bn.
Today’s market is dominated by three major players, Costa Coffee, Greggs and Starbucks. The latter pair were responsible for 73 per cent of the 353 stores added to market in that time period.
However, Costa Coffee remains the UK’s largest branded coffee chain, holding a 26 per cent share of the market with 2,677 stores, having closed a total of 17 sites over the last year.
Alex Chatterton, an analyst at Panmure Gordon said the “price point” is what makes coffee shops such an attractive business model.
“At Gregg’s you can get a breakfast for three pounds compared to say, a meal in Wagamama or something like that, where you’re paying £15 pounds,” he said.
But Chatteron said competition in the market remains fierce as more and more businesses battle it out to become the number one coffee spot.
High street hero Pret A Manger, which now has close to 500 sites across the whole of the UK, has been regarded as one of the most successful coffee chains in the last decade.
Its decision to launch a subscription service, charging £30 a month for five free hot drinks a day and 20 per cent off food, was an overnight success and is used by over 1.25m customers every week.
However, the company cracked down on subscribers sharing memberships to save costs, and in recent years, it has faced backlash on social media for its pricey cheese and pickle baguettes and lacklustre brews.
Chatterton, said yummy-mummy favourite Gail’s is taking some of the market share away from Pret, given they both run at a similar price point.
Gail’s, chaired by hospitality juggernaut Luke Johnson, has grown rapidly in recent years. It currently has just 100 stores across the UK, and it plans to open around 35 more this year.
“I would say they are taking share away from Pret, given the price points. Gails looks to be the big disrupter within the coffee shop market,” Chesterton said.
“Very few people are going to be the next Starbucks, if any at all,” Young added.
“The one thing that’s happening is we’re gonna get more [of these] branded chains. These chains are getting tighter, smarter, more automated and they’re able to survive.”
Starbucks has already outlined a pipeline of 100 new stores across the UK this year, after it launched a similar scheme the year before. It currently has 1,100 sites across the UK.
Market share of UK coffee shops as of January 2024
- Pret – 463 outlets / 4.5 per cent
- Cafe Nero – 616 outlets / 6 per cent
- Starbucks – 1,266 outlets / 12.4 per cent
- Greggs – 2,474 outlets / 24.3 per cent
A changing landscape
To remain attractive to customers, brands are ramping up their food offerings and opening in locations other than the high street, such as drive-thru sites.
Costa, Starbucks and Tim Hortons all grew their drive-thru presence over the last 12 months to collectively hold a 93 per cent share of the 801-site UK drive-thru coffee market.
Roughly a third of Starbucks sales come from drive-thru transactions, as the method continues to prove popular with customers.
It is a market steak bake maker Greggs has been keen to tap into. The business currently has 30 sites across the UK, after launching in Manchester back in 2017, and plans to open a further eight to 10 locations over the next year.
Tony Rowson, property director at Greggs, told City A.M.: “Drive-thrus are a key part of our ongoing expansion strategy throughout the UK.
“These sites enable us to cater to diverse customer preferences, whether they prefer the convenience of staying in their vehicles, walking into our shops, or ordering from home through one of our delivery partners.”
He added: “Our objective is to make our great value, tasty, and high-quality products accessible to a broader audience, and drive-thrus play a crucial role in achieving this goal.”
“We’re delighted to have reached a key milestone in our drive-thru expansion strategy with the recent opening of our 30th drive-thru site, and we foresee numerous opportunities to further extend our footprint with this format across the UK.”
Greggs, which has over 2,500 stores across the UK is one of the most successful cafe brands across England.
Analysts at Panmure Gordon previously estimated almost £2 of every £100 spent in UK hospitality is going to Greggs – up from previous figure of £1.60.
“We assumed that Greggs’ market share of the total-food-to-go sector was c.6 per cent in 2021. We believe Greggs can double its market share from this by 2026/2027,” a note read.
The no-frills bakery chain also has plans to open between 140 and 160 net sites this year.
Sales across its 2,000 stores were up 13.7 per cent in the full year, which the business credited to partnerships with Uber Eats and late-night trading.
Price increases
The coffee market has remained resilient despite a downturn in the wider hospitality sector.
Pubs and restaurants have been among the hardest-hit businesses by the cost-of-living crisis, as the public scales back on nights out on the town or fancy meals.
However, small luxuries such as cappuccinos have appeared to remain in demand despite coffee prices having doubled in the last few years. The average cost of coffee now costs £3.51, up 8.7 per cent in the last year.
Young said punters can probably expect to see further increases in the coming years due to changes in the national living wage and pressures on the coffee trade.
He said: “Coffee is not the only component in a coffee shop costs, you’ve got electricity and gas price rises.
“Prices will probably need to go up a little bit to sustain the livelihoods of the businesses and the coffee farmers.”
Why Labour MPs shouldn’t call themselves socialists
Labour is not, and has never been, a socialist party. It is a social democratic party whose mission is to save capitalism from itself, not replace it with a new system, says John McTernan
Is Keir Starmer a socialist? Is Rachel Reeves a social democrat? At the start of the general election campaign, Labour’s leader and his shadow chancellor gave differing answers to questions from journalists about their political beliefs. Few voters will have noticed, and most who did will have wondered – “What’s the actual difference? And does it really matter?”
In one way, it is an arcane historical debate within the Labour party. Reformist Labour leaders, from Hugh Gaitskell in the 50s to Tony Blair in the 90s, have sought to amend Labour’s constitutional commitment to “socialism”. Famously, Labour’s Clause 4, committed the party to “the common ownership of the means of production, distribution and exchange”.
The high tide of that politics was Clement Attlee’s 1945 Labour government which nationalised nearly a fifth of the economy, including coal, railways, road transport, the Bank of England, civil aviation, electricity and gas and steel.
As part of New Labour’s modernisation – and acceptance that the privatisations of Margaret Thatcher were irreversible – Blair amended Clause 4, to state that Labour “believes that by the strength of our common endeavour we achieve more than we achieve alone”. Though hedging his bets, the new clause also began “The Labour Party is a democratic socialist party”.
In another way, this is a fundamental question – what kind of party is Labour? This question has become pressing as opinion polls suggest that the UK will shortly have a Labour government. The values and ideology of a party form the “common sense” of a government once it is elected. They are the prism through which its ministers see the world and they are a guide to action.
Tony Blair used to say that every day in opposition you get up thinking about what you will say but every day in government you get out of bed thinking about what you are going to do.
The biggest shock Labour’s shadow cabinet will feel if, and when, they enter government is the sheer scale of the number of decisions they will have to make on a daily basis. Decisions that they will barely discuss with colleagues, let alone with voters, because there are so many of them given the complexities and reach of modern government.
Voters don’t normally openly discuss this side of politics – indeed few are consciously aware of this side of politics. But they do understand that good judgement is a key quality in a politician and that character and values are fundamental to that.
In the end, the question of whether you are a socialist or a social democrat comes down to the familiar chant – “Who are you?” If I know that, I can normally understand what you are going to do.
New Labour’s compromise wording in its new Clause 4, reflected two evasions. First, that the party isn’t, and has never been, a socialist party – it’s a “Labour” party formed by, and of, the union movement. The best and the worst of Labour’s history has been because of that link to organised labour. But it is foundational.
The second, and critically important point is that Labour’s historic role has always been to rescue capitalism from itself, rather than replace it with a new economic model. That’s why we have paid holidays and a welfare state rather than state planning.
And it explains the successes of Labour in government. Attlee rebuilt Britain after the war. Wilson modernised the country socially from university to race equality legislation, equal pay and abortion, divorce and homosexual law reform. Blair restored the public sphere after Thatcherism.
Now, with the climate crisis, Labour once more has to rescue capitalism rather than replace it.
A crisis always provokes a range of responses. The Tories are retreating to denialism. The Greens advocate for degrowth. And that’s why, more than ever, Labour needs to be confident in saying it is a party of social democrats.
This confidence is needed because the world of politics after the general election will be very different. Since the Conservatives’ landslide victory in 2019, Labour has been concerned about losing votes to its right. It has focused on so-called “hero voters” in the Red Wall.
Polls currently show that a Labour government would face a very different challenge. Two-thirds of voters support progressive parties. The largest bloc being Labour voters, followed by Liberal Democrats, Greens and nationalists. A Labour government should be concerned about losing votes to its left not the right.
The best way to protect against that is to “burn up the road” with the speed and momentum of policy being implemented. And to say what you are doing and why: telling is selling.
Why is decarbonising central to our industrial strategy? Because we are social democrats not Greens! We believe in green growth and green jobs because we need to create wealth as well as redistribute it. Ideas matter.
Winning after 5 July – which is when the next election campaign starts – will need the swagger of social democracy.
John McTernan is a political strategist and commentator and former adviser to Tony Blair