Author Archives: GK Strategy

Conservative Party Conference 2025

GK’s Associate Director, Will Blackman, shares his take on the Conservative Conference.

This year’s Conservative Party conference – Kemi Badenoch’s first as party leader – was a major test for the party that has struggled to find its sense of direction after its catastrophic election defeat last year. Against a background of plummeting polling numbers, and criticism of what some see as Badenoch’s low energy and lethargical approach to the job, the opportunity was hers to lose. A successful conference was necessary to stabilise the ship and shore up her position, at least in the short term.

The conference began with a conveniently timed announcement of a new party policy – to leave the European Convention on Human Rights. Other headline grabbing announcements then followed; including a pledge to remove 750,000 illegal migrants, cutting overseas aid to 0.1% of gross national income, and £47bn of cuts to government spending, including welfare. These were preceded before the conference by a pledge to repeal the Climate Change Act 2008, which Badenoch said “tied us in red tape, loaded us with costs, and did nothing to cut global emissions”.

What these policies do tell us is that the Conservative Party has decided where it wants to focus its electoral energies. New policies that are thinly veiled replicas of longstanding Reform or Farage positions, including on migration, aid and net zero, are evidently not intended to appeal to so-called ‘blue wall’ voters that the party lost to disastrous effect to the Liberal Democrats at the last General Election.  Instead, the so-called ‘red wall’, where Reform is increasingly at its strongest, it would seem is where the Conservatives want to apply their focus. How far this strategy can take the party, which continues to be out-polled by Reform by more than two-to-one, will be the defining story of the Conservative Party in this parliament, and of Badenoch’s leadership.

The conference itself was something of a mixed bag. Footfall was clearly significantly down on previous years, with reports of fringe events being cancelled and photos of a half empty conference hall on social media, all adding to the general sense of malaise. However, on the whole, shadow cabinet performances were fairly assured, with no major missteps or negative headlines. To that extent, the conference largely delivered what the party leadership needed it to.

The dog that didn’t bark during conference was further high-profile MP defections to Reform; much speculated about in recent weeks and hinted at by Nigel Farage himself following his own party’s conference. Whether it was ever true or if it was a case of cold feet, the Conservative leadership will have breathed a sigh of relief, at least for the moment.

Badenoch’s own speech on Wednesday was, on all accounts, a good performance. It won’t have escaped some people’s notice that many of her policy commitments appear to involve reversing policy decisions taken by the last Conservative government, with those on energy and net zero being the most obvious. Nevertheless, it was a speech that delivered the goods for now and received a strong reception from those in the hall. The announcement that a future Conservative government would abolish stamp duty will be music to the ears of many party members. However, with the prospect of a Conservative government taking office any time soon looking highly remote, the more interesting question will be whether the Labour government feels under pressure to make any moves of its own in this area between now and the next general election.

On balance, Badenoch has probably given just enough on policy and performance to see off any immediate threat to her position. However it remains the case that next year’s local elections will be the crunch electoral test for Badenoch’s leadership. Whilst some of the murmuring may fall away for now, without a significant positive change in the party’s polling position and as MPs grow increasingly concerned about losing their own seats, her longer-term future remains far from secure. Having only lost office last year, the Conservatives need more time for memories to fade on their record in office and to benefit from the failings of the Labour government. Unfortunately for Badenoch, with little discernible movement in the polls, time is not on her side.

Tiny Humans, Big Lessons: Early years under Labour a year on

GK’s Thea Southwell Reeves examines how Labour has placed early years at the heart of its social mobility agenda by focusing on high-quality, education-led provision.

 

Early years is a priority for government and has been since it first entered office last year. High quality early years education is a cornerstone of the equal opportunities ‘mission’ to break the link between a child’s background and their future success. Bridget Phillipson had championed early years long before the election and the appointment of the first ever early years minister was an indication of the priority it would have in the new Department for Education (DfE).

Although several of Labour’s early years policies have continued the work of previous governments, this government’s key ideological shift is away from seeing childcare as simply an economic issue to a focus on the provision of high-quality early education as a driver of social mobility. Addressing regional gaps in childcare provision known as ‘childcare deserts’ is fundamental to this, as is increasing the focus on quality to close the growing disadvantage gap in school readiness.

During its first year, the government’s priority has been implementing the final stages of the funding entitlements roll outs, which were completed this month. Now, eligible working parents of children aged 9 months to 5 years are entitled to 30 hours of funding per week. Overall, the expansion of funding has driven demand for spaces. The government had set a target of creating 85,000 new early years childcare places by September 2025 to support the roll out of funding expansions. It is not yet clear whether this target has been met, butInitial analysis suggests that most of this additional capacity has been concentrated in areas where provision already exists rather than creating new capacity in childcare deserts.

The government’s schools-based nurseries programme is designed to focus new provision in disadvantaged areas with 189 of the 300 government-funded new or expanded in-school settings opening this month. About 10% of school-based nursery provision is delivered by a PVI partnership. The second phase of funding is now open for applications and is prioritising high quality bids from schools in the most disadvantaged communities.

What’s next for early years?

The funding rates to deliver the government-funded childcare have always been contentious, with the industry maintaining that the funding simply does not reflect the true cost of provision. This has led many providers to use additional charges to ‘top up’ their income but the government has pushed back on this, revising the guidance around chargeable extras earlier this year. In its new strategy for the sector, published in July, the DfE announced a full review of early years funding, including the merits of national funding formulae. It will consult on proposals by summer 2026 and businesses should be monitoring and contributing to this process. The strategy also includes plans to increase the funding available to providers to support children with SEND and improve the way funding is allocated as part of the government’s wider reforms to the SEND system. More detail will be set out on this in the schools white paper this autumn.

The early years strategy, for the first time, raises DfE concerns about a rise in large providers backed by private equity. These providers, according to DfE, ‘are less likely to operate in deprived areas…and over time this can result in price rises and disruption to services.’ At the heart of this is a concern about market exits that could destabilise regional childcare provision. Policymakers will continue to monitor the financial sustainability of the early years market and may take further steps to increase market transparency if appropriate. This could include measures like those being taken in adult or children’s social care, such as a financial oversight mechanism. For businesses and investors, monitoring the development of this policy thinking and engaging with the policymaking process is vital to minimising any risk associated with such policy change, as well as realising commercial opportunities.

If you’d like to discuss early years policy in more detail please reach out to Thea on thea@gkstrategy.com

Labour Party Conference 2025 Takeaways

As the party departs Liverpool, still clearly grappling with the challenges of what being the party of government brings, we’ve learned a lot about the direction the party is going. Here are our quick takeaways.

Keir Starmer has shored up his position…for now. With the noise going into this conference all about the leadership challenge from Manchester’s Andy Burnham, the sight of his early departure from conference before the PM’s speech will please No.10. In what could have been a perilous week for the PM, strong reaffirmation of the Chancellor’s fiscal rules, coupled with strong defences from cabinet ministers and aides, resulted in Burnham conceding that Starmer is the “right person for the job”. You can’t help but add the line “for the moment…” with other rising stars like Shabana Mahmood and Wes Streeting clearly biding their time.

Labour is taking the fight to reform. In what was probably his strongest speech as party leader, Starmer clearly set the parameters for British politics. For him, this is about Labour vs Reform. Decency vs division. Ultimately, the class-conscious speech was a deliberate attempt to win back the working class that has increasingly abandoned the party over the years to the likes of Reform. In this more combative approach, he also decried Reform’s policies on immigration as “racist”. A punchy line of attack which worked in the room, but he will hope doesn’t unravel as a perceived attack on all Reform sympathisers who are doubting the centrist parties’ ability to deliver.

The looming budget has not got any easier. In media briefings over the weekend, and in her speech, Rachel Reeves continued the manifesto commitment to not raise taxes on working people. Whilst at the same time, to appease critical voices in the Labour party, she is flirting with the idea of more spending – both on infrastructure and lifting the two-child limit. She said she is a chancellor that wants to invest. None of this sounds like a chancellor staring down the prospect of having to find £30bn in November to plug the gap predicted by the OBR.

The difference a Labour government makes. This has been the underlying strategic narrative of the conference to fend off criticism there is no difference between this government and a Conservative one. We saw speech after speech rattle off long lists of tangible activities the government has taken across the policy spectrum.  We can expect much more of this narrative to come, together with a clear focus on ‘showing’ that delivery to the electorate, rather than just ‘telling‘ them.

Policy spotlight: the future of the UK food system

 

https://gkstrategy.com/wp-content/uploads/2025/09/GK-Strategy-Policy-Spotlight-Report-The-Future-of-the-UK-Food-System-September-2025.pdf

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GK Strategy – Policy Spotlight Report – The Future of the UK Food System

 

GK is delighted to share its first policy spotlight report on the food and agriculture sectors where geo-political, economic and health priorities increasingly collide.

From tackling obesity and diet-related ill-heath to food security and investor appetite for agri-tech innovation, the government’s policy agenda is ambitious. Our report explores:

 

  • The future of food and health: analysis of the government’s more interventionist stance on obesity, sugar reform and the development of a new national food strategy.
  • Innovation in agriculture: why agri-tech is now a priority in the UK’s industrial strategy and where the opportunities lie for businesses to partner with government.
  • Investor sentiment: how food, agriculture and natural capital are performing as asset classes and where private capital flow is likely to follow.
  • The view from the US: how the political and regulatory landscape in the US is evolving and how this might shape UK markets.

 

With the government eager to demonstrate delivery and progress towards much-needed economic growth, businesses and investors have a critical window of opportunity to shape policy and regulation. This policy spotlight report highlights where the engagement opportunities lie, how to align with government priorities, and how to mitigate regulatory and political risks while unlocking commercial growth.

To explore the findings of this report in more detail and what they mean for your organisations, please reach out to thea@gkstrategy.com.

Anchors aweigh: A way for private investors to play potential Fannie, Freddie IPOs

By Erin Caddell, Anchor Advisors in partnership with GK Strategy

President Donald Trump’s second White House term has sparked discussion that his Administration might return the two U.S. Government Sponsored Enterprises (GSEs) to full public ownership after more than 16 years under federal control following their bailouts in the depths of the 2008 financial crisis. In May, Trump said his Administration is giving “serious consideration” to conducting IPOs for the GSEs. And in late July Bloomberg reported that the Administration was holding meetings with bankers interested in underwriting the IPOs.

Fannie Mae and Freddie Mac’s vital place in the US mortgage system make them compelling assets for investors to look at should the IPOs move forward. Critical to the nation’s economy, the complexities of these entities and the market they serve present challenges necessitating a multi-year transition period to full private ownership. As Fannie and Freddie have swept billions of dollars in profit back to the government in the post-conservatorship era, both companies would need to build up their capital to stand as independent companies. The GSEs’ equity combined represent only 2% of their total assets, far less than traditional banks or mortgage finance firms.

This is where anchor investors could play a role. Anchor investors (we promise we do not like this idea just because we also have Anchor in our name) take meaningful equity stakes in companies preparing to go public, agreeing to hold the positions for a given period post-IPO as a sign of confidence for other investors and to lessen the fundraising need for the company. For instance, in the 2022 IPO of Life Insurance Corp. (LIC), India’s largest insurer, anchor investors including Norges Bank (Norway’s sovereign wealth fund) and the Government of Singapore (GIC) investment fund purchased about 25% of the issue in advance of the IPO. Sometimes anchor investors receive a discount on their shares in exchange for taking down large chunks of the IPO and agreeing to hold their shares though a post-IPO lockup period.

One can imagine the appeal to the government of anchor investors in the GSE IPO process, particularly for the Trump Administration, focused as it is on boosting investment in the US. For that matter, any future presidential administration will be attracted to the idea of contributing hundreds of billions to federal coffers in an attempt to offset multi-trillion-dollar federal budget deficits. Anchor investors could allow the government to generate income from early sales early, as the GSE transition plan and public offerings would likely take several years. A combination of domestic and foreign sovereign wealth funds would be most desirable: the domestic players to emphasize the US’ ability to invest in itself; the global investors to highlight the international attraction to the US capital markets. Expressing interest in the GSE privatizations now would give anchor investors a shot of having a seat at the table if the deals come together.

For investors, a day-one commitment to the GSE IPOs would provide a unique opportunity to invest in scale players in the $14 trillion US mortgage market – about 70% of which is supported in some way by Fannie or Freddie. The GSEs operate as critical components of the US mortgage industry infrastructure, setting standards and ensuring liquidity for residential and multi-family mortgage markets. Such “utility” functions have been rewarded with handsome valuation multiples and stock performance across financial services, energy, technology and other sectors, including those whose protective moats are protected by government regulation. Indeed, in the years leading up to the Global Financial Crisis, Fannie and Freddie performed well in the equity markets, though critics argued their accomplishments were driven by overly aggressive balance-sheet practices and lobbying activities.

Risks abound when investing in entities with multi-trillion-dollar balance sheets, as the wipeout of billions of dollars in the GSE’s market caps demonstrated in 2008. Numerous issues must be worked out to return the GSEs to private hands, most notably the current federal backstop on Fannie and Freddie’s combined $7 trillion-plus in debt, the lion’s share of which is backed by the mortgages the two entities guarantee. Even a modest increase in borrowing rates on such a large debt load could result in a big hit to the GSE’s earnings post-IPO, necessitating a long period in which the federal backstop is withdrawn over time.

But these are risks that large, sophisticated investors are well-equipped to navigate. A once-in-a- chance to invest in unique, highly profitable and protected franchises critical to the US economy, and to build goodwill with a President attracted to out-of-the-box deals, make the GSE privatizations an opportunity worth considering.

Why building 1.5 million homes isn’t as simple as it sounds….

Building 1.5 million new homes over the course of this parliament was a flagship policy commitment in Labour’s general election manifesto. The recently appointed housing secretary Steve Reed initially echoed the government’s ambition with the slogan ‘build baby build’. Reed has gone onto say the rate of construction is ‘unacceptable’ and has promised to increase the pace of housebuilding to deliver on Labour’s ambitious pre-election pledge.

The housing industry is facing a series of skills shortages. The Office for National Statistics warned that there are over 35,000 job vacancies in construction, many of which remain unfilled due to a lack of qualified workers. The Construction Industry Training Board (CITB) has stated that 61,000 new workers are needed each year to meet the government’s housebuilding target. Ministers have heard the calls of the CITB and in March announced that they would be investing up to £600 million to support training in the construction sector. This includes £165 million to help colleges deliver more construction courses and £40 million to support new foundation apprenticeships (launched in August). The £40 million includes an incentive of £2,000 per foundation apprentice hired and retained by employers which has been widely welcomed by the construction industry. The government has signalled that there could be continued investment, although this is likely to be restricted due to the current pressure on the public finances.

Another hurdle is the planning process. The number of new homes built in the UK has fallen during the government’s first year in office. Ministers have conceded there are ‘excessive rules’ delaying construction. The government is attempting to streamline the planning process through the Planning and Infrastructure Bill which is currently before parliament. Ministers claim that the bill will create a more decisive planning system and increase the amount of land available for developers. Whilst the bill is a step in the right direction, the impact is unlikely to be immediate.

Despite these barriers, there are some clear opportunities for the construction sector. Increases to training investment, new apprenticeships and the promise of reforms all signal the government’s continued prioritisation of the sector. The changing environment and the development of a potential second planning bill present stakeholders with a wide range of opportunities to engage with policymakers, shape regulation and improve relations between the government and sector.