At times at this year’s Labour Conference, you could be forgiven for thinking that the Party had once again managed to snatch defeat from the jaws of victory, such was the mood music coming from the Party’s leaders.

Last year’s Labour Conference was notable for the barely supressed excitement amongst MPs, candidates and party officials as they looked forward to the election to come. Now with the Budget looming on 30th October and a damaging furore over donations continuing, the focus at Conference was on rolling the pitch for the difficult decisions to come.

For business, this week was more about reading the runes than responding to policy. There was some hope in the strength of commitments to support growth (and even an offside comment on not raising CGT). This is either backing the Treasury into a corner or very misplaced messaging. Yet, opportunities to dispel drastic changes like raising Employer NICs were missed. Certainty will only come at the Budget.

Not all Budgets are created equal, some are unremarkable variations on a theme, and some are quickly superseded by events, but this Budget on 30th October will define not only Starmer’s premiership but the business environment for years to come.

Here are Nepean’s key takeaways from the conference:

Vibes, Not Policy

• The main mission was to hammer the message on difficult decisions. There were no notable policy announcements.

• In opposition Keir Starmer used conferences as a chance to dominate the news cycle through the choreographed announcement of major policies.

• The contrast with this year’s conference was stark.

• Instead of policy announcements, Ministers focused on the dire condition of the country they inherited and the need for tough choices to come.

• The vibes and direction of travel from this Government are clear but Conference provided no further clarity on the concrete policies to come.

Doom and Gloom is the Point!

• Labour’s great strength during Keir Starmer’s leadership has been its message discipline.

• In fact, they have been so effective business and consumer confidence appears to have dipped.

• This has prompted a slight change in tack from Ministers, Rachel Reeves foremost among them, with a renewed emphasis on the long-term benefits of taking the tough decisions.

• Despite this slight pivot, the strategic necessity of the Party’s core message of bleakness makes a significant shift unlikely.

Labour’s Difficult Coalition

• One of the unheralded luxuries of opposition is that it is so much harder to disappoint people. It was clear at this conference that the real opposition is inside the Party.

• Difficult decisions like the winter fuel payment are indicative of how policy will be fought over.

• Future decisions by the Government, whether for investment or on business tax, are now set against the winter fuel payment. The saving of £1.4bn is now synonymous with all decisions taken at the Budget.

• There was further evidence of that difficult internal opposition with nurses rejecting a 5.5% pay rise during Rachel Reeves’ speech.

• Everything on 30th October is being framed as a trade-off between social and economic ills. Business should remember that both in its engagement around the Budget but also in understanding the gloomy messaging from Starmer.

Escaping the Fiscal Headlock

• There is a growing clamour from all sides (bar HM Opposition) to make changes to the current fiscal rules. Labour were sympathetic but coy in response. This is clearly where the space to invest and build out the Labour growth promise will come from.

• Labour’s reputation for fiscal responsibility has required sacrifices, chief among them the commitment to maintain the fiscal rules and the harsh departmental spending cuts, set down by previous Conservative governments.

• The current rules limit Labour’s options for stimulating economic growth. Complex policy like planning reform will take time to bear fruit and investment would have to be limited without changes to the rules given the well-documented ‘black hole’.

• All of this suggests that at some point the fiscal rules will need to be at least tweaked if not outright changed. Rumours have focussed on everything from recasting losses from QT to moving GB Energy and the National Wealth Fund onto a separate ‘balance sheet’. This is all about moving capital investment out of day-to-day spending.

• Following hints in the Chancellor’s speech on Monday, businesses should be prepared for these rules to change at the Budget and unleash more co-investment.

Business in the Dark

• While business was front and centre of the election campaign, there was certainly a feeling of playing second fiddle at the conference.

• With a lot of businesses in attendance there was no actual certainty on policy to be seen and questions on everything from tax to industrial strategy went unanswered on Business Day.

• The uncertainty over where tax rises will fall is emblematic of the broader confusion for businesses when appraising the new Government.

• On tax, for example, Labour’s pledge not to increase the burden on working people has raised concerns that capital gains might be targeted instead. More concerningly, there were very non-committal answers on raising Employers’ NICS contributions.

• Similarly on changes to employment law, Labour’s 100-day deadline to introduce legislation is fast approaching with no concrete specifics on how the promises will be implemented and clear disagreement amongst the key members of the new Cabinet Committee on the Future of Work, further ramping up the uncertainty.

• Industrial strategy was another area highlighted by Ministers where big changes are expected. The new strategy set to be unveiled in a few weeks will set the Government’s priorities for business engagement, potentially leaving some on the outside looking in.

All About the Budget

• The long arm of the Treasury loomed over conference proceedings with Ministers from Education and Transport to Business and Culture waiting for the Budget to answer questions on policy.

• With this focus on the Budget, there have been jokes that Rachel Reeves is really running the country. It certainly feels that way.

• Whether you are in oil and gas, retail, fintech or transport, each with a supposedly different sponsoring Department, the real answers on policy lie in the Treasury.

• Even within Government, advisers and civil servants are largely twisting in the wind until the full shape of Treasury decision-making becomes clearer.

• For businesses looking for clarity, the 30th cannot come quickly enough. In the meantime expect the gloomy messaging to continue as Westminster prepares for tough decisions and a potential surprise on the fiscal rules.