A draft copy of the Labour party’s election manifesto was leaked to three national newspapers last night. Leaving aside who might be responsible, what their motivations might have been and what it says about the state of the Labour Party, it gives us a very good idea what our industry can expect if Jeremy Corbyn should will power on 8 June.

Now, there are lots of big ‘ifs’ in life but that must be one of the biggest.  You might think Russia has more chance of winning Eurovision than Labour the election and, to be frank, you would be right.  But the manifesto is still important for credit businesses because it gives us a clear indication of where an influential school of national political thought will be coming from during the next Parliament.

The document is long and detailed: 46 dense pages of very prescriptive policy. It seems unlikely that there will be wholesale changes between now and the expected official publication date next week.  So what we have seen is what we will get; and we can expect its contents to form Labour party policy from 9 June onwards, if Jeremy Corbyn aims as Labour leader (another big ‘if’ and a discussion I won’t go into here).

The overall headline is it’s fast forward to 1983.  In tone and content, the similarities with Michael Foot’s ‘longest suicide note in history’ are striking.  The media has tended to lead with Trident and the nuclear deterrent. This is a particularly excruciating policy conundrum for the Leader and his parliamentary party and the manifesto doesn’t disappoint.  The document Labour supports “the renewal of the Trident submarine system”, but adds that “any prime minister should be extremely cautious about ordering the use of weapons of mass destruction”.  I’ve yet to meet one who has been cavalier about it.

Surprisingly, it doesn’t mention the credit industry once. From my discussions with parliamentarians shortly after the election was announced, I concluded there was a very good chance we could see commitments to further price controls in the retail credit market.  Senior Labour moderate, Rachel Reeves, had held a Commons debate on overdraft charges days before the election announcement and her call for a statutory cap on charges had been well supported by her Labour colleagues.  On top of that, Corbyn’s predecessor as Leader, Ed Miliband, has continued to campaign for caps in the rent-to-own market and it was a fair assumption that that would be adopted by the Corbyn camp.

So further rate caps are conspicuous by their absence, in our view. One explanation is the closeness to the issue of Stella Creasy, who is not well liked by Corbyn’s extra-parliamentary outriders in Momentum.  With talk of 100 Labour MPs forming a breakaway ‘Progressive’ group within Parliament, it is possible the Leadership did not want to lend credence to a leading progressive light.

However, it would be a mistake to interpret the absence of caps as a free run for the industry.  Far from it.  Risk based pricing (interpreted as the ‘the poor pay more’) is abhorrent to the Left and they would pile in soon enough!

But what does the manifesto say that’s relevant to us in the credit industry?

Firstly, there are prohibitions on bank branch closures:

“Over 1,000 high street banks have closed in the last 18 months, yet the Big Four banks made over £11 bn profit from high street banking. Branch closures threaten our high streets, depriving communities of an essential service and damaging the local economy. Labour will change the law so that banks can’t close a branch where there is a clear local need, putting their customers first.”

It proposes a Post Office Bank, which would doubtless have implications for the credit industry over time:

“Labour will end the closure of Crown Post Office branches which play a major role in serving their communities. We will also set up a commission to establish a Post Bank, owned by the Post Office and providing a full range of banking services in every community.”

There is support for SMEs:

“Small and medium sized enterprises (SMEs) are hugely important to the UK economy, providing 60% of private sector jobs. They are key in delivering a meaningful industrial strategy. Labour understands that many start-ups and SMEs face significant challenges such as access to finance and business advice, late payments, relatively high administrative burdens all of which pose significant barriers to growth.”

Among the remedies are a “new National Investment Bank, regional development banks in every region to identify where other lenders fail to meet the needs of SMEs, a reinstatement of the small business corporation tax rate and a package of reforms to business rates.”

Like the Tories, there is a proposed cap on energy bills:

“Labour understands that many people don’t have time to shop around, they just want reliable and affordable energy. So the next Labour Government will introduce an immediate emergency price cap to ensure that the average dual fuel household energy bill remains below £1,000 per year, while we transition to a fairer system for bill payers.”

On Brexit, Team Corbyn performs another delicious contortion:

“Labour accepts the referendum result and a Labour government will put the national interest first”.

That ‘and’ reads like it should have been a ‘but’.

It has a lot to say on Brexit: here’s a fairly full selection of the most relevant and revealing bits:

“We will prioritise jobs and living standards, build a close new relationship with the EU, protect workers’ rights and environmental standards, provide certainty to EU nationals and give a meaningful role to Parliament throughout negotiations.”

“We will scrap the Conservatives’ Brexit White Paper and replace it with fresh negotiating priorities that have a strong emphasis on retaining the benefits of the Single Market and the Customs Union – which are essential for maintaining industries, jobs and businesses in Britain. Labour will always put jobs and the economy first.”

“A Labour Government will immediately guarantee existing rights for all EU nationals living in Britain and secure reciprocal rights for UK citizens who have chosen to make their lives in EU countries.”

“Labour recognises that leaving the EU with ‘no deal’ is the worst possible deal for Britain and that it would do damage to our economy and trade. We will reject ‘no deal’ as a viable and negotiate transitional arrangements to avoid a cliff-edge for the UK.”

“We will drop the Conservatives’ Great Repeal Bill, replacing it with an EU Rights and Protections Bill that will ensure there is no detrimental change to workers’ rights, equality law, consumer rights or environmental protections as a result of Brexit.”

“Throughout the Brexit process, we will make sure that all EU-derived laws – including workplace laws, consumer rights and environmental protections – are fully protected without qualifications, limitations or sunset clauses.”

On Scotland, it says this:

“Labour opposes a second Scottish independence referendum and will campaign tirelessly to ensure that the desire to remain a part of the UK is respected.”

In summary, it is a remarkably prescriptive, socialist tome.  None of it is likely to be implemented, but it provides a fascinating glimpse of what we can expect from the Opposition benches if Corbyn stays on as Leader.

CCTA will update on the contents of the official document when it appears and flag any changes to the contents.