Monthly Archives: April 2026

Keir Starmer’s Nightmare – a look ahead to the May 7 elections

The UK is facing unprecedented electoral times. For the first time in British history, a party other than Labour or the Conservative Party has led in the polls for over 12 months. A governing party has never fallen in the opinion polls as fast or as heavily as the current Labour government. Fewer than two in five people say they would vote for Labour or the Conservatives, which has never happened before. To help us make sense of these seismic changes, esteemed political scientist and elections expert Sir John Curtice joined GK Strategy and our guests to explain the fundamental shifts that have taken place in electoral behaviour in the UK, and to unpack what this means for the upcoming elections on May 7.

On May 7, millions of people across the United Kingdom will go to the polls to vote in this important set of elections. Around 5000 seats across 136 local councils in England, which includes all the London borough councils, are up for grabs. Outside of England, Scotland and Wales will have parliamentary elections which will determine what party will run the devolved governments in Edinburgh and Cardiff. These elections are the biggest set of elections between now and the next general election, and the results will inevitably have a significant impact on politics and the standings of the current party leaders.

Curtice explained that British electoral attitudes have become highly fragmented, with the underlying shift being visible in the breakdown of traditional voting predictors. Historically, working-class and younger voters tended to support Labour, while middle- and upper-class and older voters leaned Conservative. However, his analysis of the 2024 general election showed that these relationships have largely collapsed. In their place, voting behaviour is increasingly structured around social values: whether individuals are socially liberal, and view diversity as something to be promoted, or socially conservative, and favouring greater cultural homogeneity.

This shift first became apparent during the Brexit referendum. While there was a relatively even split between economically left- and right-wing voters on whether to remain in or leave the EU, social attitudes were far more polarised: social liberals overwhelmingly supported Remain, while social conservatives backed Leave. Curtice argued that Brexit crystallised this realignment in British politics, with social values now serving as the strongest predictor of voting behaviour.

Looking to the elections on May 7 and the fate of the two main parties, Curtice laid out a grim picture for them both. He warned that the pro-Brexit coalition which delivered Boris Johnson’s victory in 2019 has now fractured, leaving the Conservative vote split almost evenly between Leave and Remain supporters. For Labour, the picture that Curtice painted is arguably worse, with its 2024 coalition fragmenting across the Green Party, Reform UK, and the Liberal Democrats. Curtice argued that the driving factor behind this is that both the Green party and Reform UK have firmly chosen a side on the socially liberal–socially conservative divide, allowing them to reap the electoral rewards of modern Britain’s voting behaviour.

May 7 looks to be a dark night for Labour and the Conservative Party, with Curtice stating the night will either be “bad, very bad, or existential” for them both. Polling day could result in what Curtice described as “Keir Starmer’s Nightmare”: Labour coming third in Wales and Scotland, losing to Reform UK in working class councils, and the Green Party beating them in London. While he acknowledged the considerable uncertainty around the elections and their outcomes, Curtice argued that the two-party system is effectively dead. In its place, the first-past-the-post system that once enabled the Conservatives and Labour to dominate is now contributing to their decline. Sir John aptly captured it: “those who live by the sword can die by the sword.”

GK Strategy are experts in helping businesses and investors understand, navigate and influence the ever-changing political landscape. If you would like to talk about the impact of the local elections or the political landscape more generally, please contact scott@gkstrategy.com.

Will the Chancellor’s ‘securonomics’ strategy drive growth in a new age of instability?

Throughout her time as Chancellor, Rachel Reeves has insisted that the government’s main objective is to facilitate economic growth. During her Mais Lecture on 17 March 2026, Reeves set out a vision for long-term economic growth, using the speech as an opportunity to highlight the ways in which the government will overcome challenges such as fiscal constraints, low productivity, and global instability.

Reeves reaffirmed her belief in ‘securonomics’, an economic strategy where the government helps individuals and businesses gain economic security by investing strategically in sectors like technology, financial services, science and infrastructure. Reeves emphasised that the government needed to play a more active role in guiding investment given the impact of the middle east conflict on the global economy. She stated that market disruptions caused by the COVID-19 pandemic, the Ukraine-Russia war, and the US-Israel war with Iran meant that ‘globalisation, as we once knew it, is dead’. As a result, the government would need to find balance between building resilient public services and facilitating private sector growth, as well as a balance between importing goods and products from other countries and bolstering domestic supply chains.

A central theme of the lecture was the ‘big choices’ the government is making to shape the UK economy over the next decade. The Chancellor placed significant emphasis on securing closer ties with the EU, arguing that it was essential for future growth. She stated that a closer alignment could reduce trade barriers. Reeves acknowledged that Brexit has had a negative impact on the UK economy, a shift from previous years where she had shied away from being overtly critical of Brexit. Reeves stopped short of expressing support for rejoining the EU, instead stating that the UK could find greater alignment with Brussels on policy, while still operating outside the EU’s formal structures. If the government is successful in forming a closer relationship with the EU, she remarked, it could ease the administrative and customs costs for businesses importing from and exporting to the European Union.

While business owners will be pleased to see the Chancellor discussing reducing trade barriers with the EU, Reeves’ attempt to set out a vision for regulatory alignment with the EU may be more concerning for businesses. Reeves said that the government would be prepared to align with EU regulation where it is in the ‘national interest’ to do so, and would maintain regulatory autonomy in sectors with strategic importance for the UK. However, this ignores the post-Brexit reality – the UK and the EU are growing apart on their regulatory goals.

Recent UK governments have increasingly highlighted their ability to implement more flexible approaches to regulation than the EU as a selling point to attract global business. Reeves herself wrote to 17 regulatory bodies in January 2025 urging them to ‘tear down regulatory barriers’ and focus on opportunities to facilitate economic growth. For example, Reeves has implored the Financial Conduct Authority to reduce ‘anti-risk’ regulations and improve competitiveness in financial services sub-sectors, including consumer finance. This is a significant contrast from the EU’s approach, which is more precautionary and is unlikely to result in the reduction of detailed consumer protection rules. If the government does pursue regulatory alignment with the EU in financial services, it would need to consider the impact on regulations, such as affordability assessments and disclosure requirements. Altering these regulations could increase compliance costs for businesses and would likely upset management teams that have spent the last five years adapting to the UK’s Consumer Duty.

The Chancellor also argued that technological advancement is critical to boosting productivity, creating jobs, and positioning the UK as a global leader in emerging industries. As part of this plan, Reeves said the government will support regional growth through fiscal devolution that will empower local leaders, and will also create sector hubs in different cities. This includes establishing Leeds’ Northern Square Mile as a destination for global financial services. To support regional growth the government will create new city-level investment funds and allow regions to retain more of the tax revenues they generate, with the aim of stimulating local investment and reducing reliance on central government.

Reeves commitment to supporting technological innovation in financial services, as well as facilitating growth across the country is likely to provide opportunities to businesses in emerging financial services sub-sectors that harness AI and machine learning. Tech-focused sub-sectors, such as embedded finance, could benefit from these plans, including businesses providing payments and money transfers services, peer-to-peer lending services, and insurtech services. Investors focused on these sectors should monitor the government’s progress in establishing finance or technology sector hubs in various cities across the UK, as well as any funding announcements relating to these sectors.

The Mais Lecture reinforced a consistent economic strategy centred on stability, investment, and reform. While the lecture did not introduce any new policies, it did clarify the government’s long-term economic goals and Reeves’ commitment to ‘securonomics’. However, Reeves will need to use the coming months to share further details on the extent to which she wants key sectors within the government’s industrial strategy, such as the financial services and technology sectors, to be aligned with the EU on regulation. The Chancellor is ‘optimistic’ about the government’s ability to drive investment and growth but will need support from the business community to do so. Investors and businesses should consider potential scenarios where they can support the government to ensure that policy, funding and regulation is geared towards creating the best possible environment for growth in the UK.

If you would like to discuss the Chancellor’s growth strategy and its impact on businesses in more detail, please get in touch with joshua@gkstrategy.com.