Monthly Archives: September 2026

View from the US: A Blue Wave is taking form

Erin Caddell of GK Strategy’s American partner Anchor Advisors examines the shifting US midterm landscape and the implications of a potential Democratic resurgence.

Like a surfer looking out at the ocean for the next big swell, US political observers are seeing signs of a gathering political “Blue Wave” – a potential shift in control of the House of Representatives and/or the Senate to Democrats in the midterm elections on 3 November. At this point, it is difficult to tell whether the wave will be big or small, and in the rapidly shifting seas of American politics, it could dissipate before it hits the shore. But US-focused investors and corporates should start paddling now to position themselves for the policy changes likely to occur.

As with most US political analysis these days, the midterm election outlook begins and ends with one man: President Trump. Arriving at the halfway point of the president’s term, midterms are often viewed as referenda on the incumbent administration’s progress. And with Trump dominating his party and the political debate as few have, midterm campaigns have been more focused on Trump than on the individual House and Senate candidates.

Here, the news is not good for Trump and the GOP. Continuing a trend we’ve noted in this column in recent months, Trump’s approval rating continues to grind lower due to high fuel prices driven by the unpopular US war with Iran, sticky inflation, and more recently, by a reacceleration of a trade war with Canada. An FT poll released on 6 September is indicative of the trend of recent US voter surveys: The poll of 1,914 registered voters found that 33% approved of Trump’s performance at the end of August, down from 39% in May. Equally troubling for the GOP, the survey found that independent voters’ approval of the president dropped from 32% in May to 26% in August.

Trump’s sagging popularity is being felt on the campaign trail. In the House, Republicans hold a slim majority of 218-214, meaning Democrats need to flip three seats to seize control. 270towin, an election forecaster, pegs 215 House seats as leaning Democratic, and 201 Republican equivalents, with 19 toss-ups in the 435-member body. Since 1946, the incumbent party has lost an average of 25 House seats in the midterms. Betting markets ascribe a 90% likelihood of a House flip in November.

In the fight for the Senate, with Republicans holding a 53-47 edge, Democrats need to win a net four seats to gain control (the Vice President breaks ties). The Democrat candidate is leading in the latest polls for GOP-held seats in Alaska, Maine, Iowa, North Carolina, Ohio and Texas, according to RealClearPolitics, though the margins are within a point or two in several, and a couple of Democrat-controlled Senate seats are also close. Betting markets peg odds of a Democratic Senate flip at 62-3%, up from 30% a year ago.

A lot can change in two months. But the data begs the question: What would it mean for US-focused investors and corporates for Democrats to win one or both houses of Congress in November? We focus here on two sectors: healthcare and renewable energy:

Healthcare. The healthcare and health insurance sectors have faced stiff headwinds throughout the second Trump Administration. The One Big Beautiful Bill (OBBB) – the centerpiece of the Republican legislative agenda in the first half of Trump’s second term – approved US$911 billion in spending cuts in the Medicaid health-insurance program for the poor over 10 years (some 15% of projected spending before the bill’s passage) and tightened eligibility requirements. Trump’s health secretary, Robert F. Kennedy Jr., has also pursued an anti-vaccine agenda that has hurt large pharmaceutical companies as well as primary-care physicians who administer vaccines to young children.

Democrats would not gain the ability to overturn administrative decisions even if the party wins the House or Senate in November. But through the appropriations process, a Democrat-led congressional chamber would dig out an old DC playbook: delay and live to fight another day. Democrats would attempt to delay the mandated spending cuts and tougher eligibility requirements for Medicaid recipients, many of which are not scheduled to come into effect until 2027. Democrats would also push back through budget tactics and oversight hearings against RFK Jr.’s moves to water down vaccine mandates and appoint anti-vaccine members of government health advisory panels. Beneficiaries could include hospitals (which receive substantial revenue from serving Medicaid recipients), Medicaid-focused insurers, primary-care physicians’ practices and drug manufacturers.

Renewable Energy. It is a worthwhile debate whether healthcare or renewable energy has been a bigger punching bag for Trump 2.0. We’ll give the nod to renewables, as not even health providers have been paid by the government not to provide their service. The Trump Administration has taken this unusual step, offering to pay more than US$2 billion to offshore wind developers sponsors to stop and invest in fossil-fuels projects instead. The Administration reported it approved new oil and gas leases on federal lands at a pace 55% greater in 2025 than in the last year of the Biden Administration in 2024. Yet the advantages of renewable development over fossil fuels – notably lower costs and faster speed to market – have meant that renewable production has still been growing despite the Trump Administration’s stance. The U.S. Energy Information Administration (EIA) reported that total U.S. energy production grew 3.4% y/y in 2025, with natural gas production increased by 4%. Renewable energy production rose 3%, equal to the growth in crude oil output, with both solar and wind setting new records (see below). Despite Trump’s constant anti-renewable, pro-fossil-fuels rhetoric, 61% of Republicans told Pew Research Center in 2025 they support more solar power (77% for all respondents), while 48% favor more wind (68% overall).

This bipartisan base of support could lead to improved market conditions for renewables firms under a Democrat House and/or Senate. As part of broader negotiations over the federal budget or on raising the debt limit, Democrats could push to restore tax credits for renewables projects passed during the Biden Administration in the Inflation Reduction Act (IRA) that the Trump Administration and the GOP-controlled Congress have reversed or limited thus far in Trump’s second term. Democrats would also use their investigative powers in Congress to scrutinise the payments the Trump Administration has made to halt offshore wind developments. Ultimately, market demand may lead policy: The new data centers necessary to power the AI boom are expected to increase total U.S. electricity demand by 5-10% by 2028, according to estimates by the University of California’s Lawrence Laboratory. As loyal Westminster Unwrapped readers know, the data-center boom has been met by a sudden public backlash across the U.S. (see our August 2026 note “Can’t buy me love: American public opinion turns against data centers – what’s next?”). But even if actual data-center construction is half that of projected, the U.S. will need significantly more renewables capacity to meet demand even if oil and gas development proceeds apace.

If Republicans rebound and hold both houses of Congress in November, the healthcare and renewables sectors would face a challenging policy landscape, but one no more hostile than the one they have managed through since January 2025. But a small blue wave could materially improve the operating environment for sectors out of favor thus far in Trump’s second White House stint, even better if a big one crashes to shore.

The future of flight: Beyond Visual Line of Sight operations

One of the main regulatory barriers to the successful commercial application of drones is the restrictions on routine Beyond Visual Line of Sight (BVLOS) operations. Many of the most commercially significant uses of drone technology require operators to fly beyond their direct line of sight, including delivery services, infrastructure inspection, surveying and mapping, and the monitoring of energy and transport networks. Enabling routine BVLOS operations is therefore critical to allowing drone services to operate at scale. This will be crucial to unlocking the full economic contribution of drones which, according to , could be worth £45 billion to the UK economy by 2030.

The UK has succeeded in funding and running trials of BVLOS operations, though these have yet to translate into a regulatory framework that enables routine operations at scale. In 2023, the CAA selected , spanning use cases from the delivery of pathology samples between hospital laboratories in London to infrastructure inspection. These trials have begun to pave the way for increased BVLOS operations, with additional London hospitals joining an expanded drone delivery service in early 2026. Operational data from the initial trial showed cost savings of 28% and a 98.4% reduction in CO2 emissions per delivery compared with conventional courier methods. This demonstrates the significant commercial and environmental benefits that BVLOS operations can provide and highlights the potential for wider adoption if the regulatory framework enables these services to move from individual trials to routine, scalable operations.

It is possible to apply to the CAA for operational authorisation for BVLOS flights using UK SORA (Specific Operations Risk Assessment), but this remains difficult to achieve in practice. To gain approval, operators must demonstrate that a specific operation can be conducted safely, meaning that authorisation may need to be sought for materially different operations or operating environments. While this approach can enable defined activities, such as regular deliveries between two hospitals, it can be time- and cost-intensive for businesses seeking to operate across multiple routes or locations that may change depending on the specific use case The publication of a SORA general operations template in August 2026 provides operators with a clearer and more standardised structure for developing the documentation required for an application. However, operators must still develop the relevant operational procedures and supporting evidence for their proposed activities, meaning that securing authorisation remains a time- and cost-intensive process. As a result, securing individual operational authorisations is not equivalent to a regulatory framework that allows routine BVLOS operations at scale, and this limits the ability of operators to scale their services rapidly.

There is a clear ambition across government and the CAA to enable routine BVLOS operations. The Regulatory Innovation Office (RIO) has been working with the Department for Transport (DfT), the Health and Safety Executive (HSE) and the CAA to address regulatory barriers to BVLOS operations. This has already resulted in several changes. A single, standardised SORA risk assessment has been introduced to reduce approval times for complex operations; the CAA is developing a , up from the previous 90-day period, providing greater certainty for longer-term operations; and its has been expanded to enable more operations in low-traffic environments, such as around power lines. While these changes operate within the existing system of approvals for individual operations, they represent incremental steps towards making BVLOS flights easier and more commercially viable. However, further reform will be required to move from facilitating individual operations towards a framework that enables routine BVLOS services to be deployed at scale.

To further scale BVLOS operations, the CAA has set out a , which charts a path towards routine and scalable BVLOS operations across the UK by 2027. Rather than pursuing a single major regulatory change, the CAA is adopting a ‘learn and evolve’ approach that will progressively move operators from segregated or restricted airspace towards integration with other airspace users as regulation, technology and operational evidence develop. The roadmap identifies three pathways for commercial operations. The first expands operations in Atypical Air Environments, such as around railways, power lines and wind turbines, where the risk of encountering crewed aircraft is comparatively low. The second focuses on integrating low-level BVLOS operations below 500 feet in urban areas, initially through restricted corridors before moving towards shared and uncontrolled airspace that can accommodate multiple operators. The final pathway is fully integrated BVLOS, enabling longer-distance operations such as middle-mile logistics, emergency services and offshore infrastructure inspection to operate alongside other airspace users. The CAA is aiming to have operations in controlled airspace underway by 2027, with operations in uncontrolled airspace beginning in 2028.

While this is a positive signal that the CAA wants to break down this regulatory barrier, it is important for the drone sector to engage closely with both the CAA and the government to ensure that the roadmap is delivered and enables routine BVLOS operations across all of these areas. It will also be important to build greater awareness among parliamentarians of the economic benefits of drones, which will make them more likely to scrutinise progress on this issue and to apply further pressure on the government and the CAA to ensure that there are routine and scalable BVLOS operations. Coordinated engagement with regulators, government and parliamentarians will be important in ensuring that the roadmap creates a regulatory environment that supports the commercial growth of the sector.

As parliament returns under the new Andy Burnham-led government, the drones sector has an important opportunity to firmly place the development of a supportive regulatory framework on the government’s agenda and build political momentum behind the reforms needed to enable routine BVLOS operations. At GK, we have launched the UK Drones Alliance, which will do exactly this by bringing together businesses from across the sector to speak with a coordinated voice to government, regulators and parliamentarians. The Alliance will provide a platform for the sector to demonstrate the benefits of drone technology and advocate for action to tackle the regulatory barriers constraining growth, enabling the industry to scale.

If you would be interested in hearing about our next UK Drones Alliance event, which we are hosting in partnership with the Department for Transport, or to discuss this policy area in more detail, please contact jacob.walsh@gkstrategy.com

Digital health: Are we transforming the NHS or merely digitising what’s there?

Drawing on his experience as a health minister and chair of the Health and Social Care Select Committee, GK’s strategic advisor Steve Brine examines the government’s ambition to shift the NHS from analogue to digital, arguing that its success will depend on whether technology genuinely transforms care and reduces frontline pressures, rather than simply digitising how patients access them.

The Labour government has made ‘analogue to digital’ one of the defining ambitions of the10-Year Health Plan. It is difficult to argue with.

A next-generation NHS App, (finally) a Single Patient Record, greater use of AI and digitally enabled neighbourhood health all offer the prospect of a service that is easier to navigate, more personalised and – whisper it – more productive.

Given the pressures facing the NHS workforce and public finances, technology is no longer an interesting addition to health reform; it is central to whether much of that reform can actually be delivered. Jim Mackey, Chief Executive of NHS England, believes this to his core.

But there is an important question underneath all this ambition: how deliverable is it in practice, and are we moving further away or getting closer since the change of personnel in government?

For most people, their interaction with the NHS happens through primary care. That means the digital NHS will ultimately succeed or fail not in Whitehall, but in thousands of GP practices, pharmacies, optometrists and other community settings.

And therein lies both the opportunity and challenge.

Digital technology should help patients reach the right service first time, automate routine administration, enable better self-management and allow clinicians to concentrate their time on people with more complex needs. Used intelligently, it can support the other great shifts the government wants to achieve too: from hospital to community and from sickness to prevention.

But there is a danger that we confuse digitising access with transforming care.

Making it easier to contact the NHS is not necessarily the same thing as reducing pressure on it. If a new digital front door simply produces more follow-up work for already stretched primary-care teams, we have made demand more efficient without making the service more productive.

That distinction seems to me, as a former minister for primary care, to matter enormously.

The real opportunity is not simply to give patients a digital route to the same services they have always used. It is to use technology to change where they go and, sometimes, whether they need to see a healthcare professional at all.

During my tenure as the minister, Pharmacy First was born of exactly that thinking and I wrote about it in a recent column. It is hugely successful but that success should give us confidence to ask the next question: is Pharmacy First an analogue service in a digital age?

Its great strength is its simplicity. You have a problem, you walk into a pharmacy and speak to a professional, often without an appointment. We must not lose that.

But today we should be able to open the NHS App, describe our symptoms and be directed towards the right destination: self-care, GP, urgent care or community pharmacy. If pharmacy is appropriate, we should be able to see which pharmacies nearby offer the service and, ultimately, which have the capacity to see us.

‘Try your local pharmacy’ is mere signposting. ‘Your local pharmacy can help you this afternoon’ is a pathway.

The same principle applies much more widely.

A patient should not need to understand the organisational architecture of the NHS before accessing it. The question should increasingly be not how do I get a GP appointment? but what is the quickest and most appropriate way for the NHS to help me?

A genuinely intelligent digital front door should help make that distinction.

This is where the government’s digital ambitions and its neighbourhood health agenda ought to come together. Digital should be the connective tissue which allows care closer to home to work, not a separate technology programme running alongside it.

The NHS App may become increasingly sophisticated, but a brilliant consumer interface sitting on top of fragmented clinical systems does not constitute a digital health service. In short, the NHS does not only have a digital-access challenge; it has an integration challenge.

There is a workforce issue here also. Digital transformation cannot simply become another set of requirements imposed upon primary care. Every new platform, pathway or form of digital access changes somebody’s working day.

For a GP practice already managing intense demand, the compelling technology is not necessarily the one with the most impressive functionality. It is the one that removes duplication, reduces avoidable contacts, automates routine processes or releases clinical time.

Perhaps that suggests a simple test for every significant piece of NHS digital transformation should be; what workload does it REMOVE, not simply what functionality does it ADD?

There is an important patient dimension too. Digital by default cannot become digital only. Some patients will continue to need telephone or face-to-face access and, for those with frailty, multiple conditions or other complex needs, human navigation may become more rather than less important.

That is not an argument against digitalisation. In many ways, it is the argument for it. If technology can deal more effectively with straightforward transactions and help digitally confident patients navigate services themselves, scarce capacity can concentrate on those who need it most.

That, ultimately, is the prize.

Digital transformation should not be an IT programme imposed upon primary care. It should be service redesign undertaken WITH primary care. And the real measure of success will not be what happens on the screen, but whether technology changes for the better what happens behind it.