Author Archives: GK Strategy

Housing Policy Under Labour: One Year On

Twelve months ago, the Labour government was elected on a manifesto with housing policy at its heart. It pledged to improve the lives of renters, as well as make housing more affordable by accelerating housebuilding and reforming planning policy, which in turn placed housing policy at the centre of the government’s ‘growth mission’.

One year on from this government taking office, what have been the major trends in housing policy under Labour, and how much progress is it making against the commitments it set out before the election? In this blog, our consultants Sam Tankard, Will Blackman and Joshua Owolabi look at the biggest housing policy initiatives from the government and what to expect next.

Planning and Housebuilding

The root of many troubles facing UK construction and housebuilding lies in the planning system which, in its promise of reform back in 2023, Labour committed to “back the builders not the blockers”. This move was seen as necessary if Labour had any hopes of meeting its manifesto promise to build 1.5 million homes over the course of this parliament. This was always a tall order given the UK has averaged 150,000 new homes between 2013 – 2023, despite targets often still sitting at around 300,000 a year.

The government’s Planning and Infrastructure Bill was introduced earlier this year as one of its flagship pieces of legislation, designed to speed up the delivery of new homes, increase capacity of local planning authorities with new planning officers, unlock land through compulsory purchase orders, and introduce a Nature Restoration Fund to offset environmental impacts.

This was welcomed by developers, investors and pro-housing campaigners as a sign that the government was finally putting in the policy requirements to unlock the level of growth needed to hit their targets, especially as housebuilding ‘starts’ since the beginning of this parliament are sitting at 186,000 – some way off the government’s target.

However, those same supportive voices now feel disappointed that the government has already started to water down the bill, even after removing the whip from an MP for leading a rebellion against it. In its original form, the bill was not considered hugely radical: criticised in part for only making tweaks rather than wholesale change. It does not, for example, even deal with the wider issues hindering development such as zoning and the value of available land, the labour skills shortages in construction, or the rising cost of materials that are pushing up the cost of housebuilding.

Now in the Lords, the government has introduced amendments that would make Environmental Delivery Plans harder and more complicated, as developers will now have to demonstrate how it will contribute positively to nature, and giving Natural England a potential veto on the delivery of new homes.

This significant concession signals the bill could be weakened further still, making it neither effective in delivering the housing at scale, nor enshrining the environmental protections that campaigners want to see. Housing Secretary, Angela Rayner, will need to use her political heft in the Cabinet to demonstrate the government remains on track and isn’t just compromising on a damp squib. After all, as a former prime minister once said, “standing in the middle of the road is very dangerous, you get knocked by the traffic from both sides”.

Rental Reform

One of the most significant areas of housing policy reform over the last 12-months was in fact originated under the last Conservative government. The Renters’ Rights Bill, which is currently coming towards the end of its passage through Parliament, has been a long time in the making.

It was the Theresa May government in 2019 that first consulted on reforms to rebalance the rights and responsibilities of landlord and tenants, which included ending the ability of landlords to issue Section 21 notices, or ‘no-fault’ evictions. This change continues to be the centrepiece of the bill and is intended to give greater stability and security of tenure to tenants. The bill also provides landlords with reformed and expanded grounds for seeking possession of their properties under Section 8 of the Housing Act 1988. This includes cases where the landlord wishes to sell or to move into the property themselves. Other measures include stricter requirements around rent increases, the creation of a new ombudsman, new requirements on landlords to remedy mould and damp problems, and a new right for tenants to request a pet.

The Conservative government’s version of this legislation – then called the Renters’ Reform Bill – fell away following the dissolution of the last parliament. Labour’s version of the legislation includes some significant differences to its predecessor, including increased notice and grace periods, and a three-month requirement of rent arrears before a landlord can seek possession, up from the two months proposed by the Conservatives. Almost all of the changes put forward by Labour are to the benefit of tenants rather than landlords.

Taken together, these reforms are the most significant changes to the regulation of the private rented sector for over 35 years. The residential landlord sector has been careful not to be seen to oppose the legislation outright given the unhelpful optics around this. However, many individual landlords are concerned that the balance has tipped too far away from them, potentially leaving many unable to take back possession of their properties in reasonable circumstances. Court backlogs have provided an additional layer of concern, with delays in processing evictions claims already persisting in many parts of England, and many landlords calling for significant improvements in order to allay their concerns.

Some industry leaders such as Propertymark and the National Residential Landlords Association have warned that the proposed provisions could lead to landlords withdrawing from the sector, in turn limiting supply and driving up rents. The Ministry of Housing, Communities and Local Government’s own impact assessment does not predict an exodus of landlords from the sector. Indeed, landlords have been subject to a raft of regulatory and tax changes since 2015, but these have not resulted in significant divestment from the private rental market, which many had predicted at the time. There is no question that these reforms are significant, but the longer-term impact of them may not be seen for many years to come.

Leasehold Reform

The Leasehold and Freehold Reform Act 2024 (LAFRA 2024) was passed by the previous Conservative government to strengthen leaseholders’ rights. However, its implementation has become the responsibility of the Starmer government as many of the reforms within the act require secondary legislation before they come into effect. This is a significant task given the high number and complexity of the provisions within the act.

In March 2025, the government implemented measures set out in LAFRA 2024 strengthening Right to Manage (RTM) provisions. Prior to March, landlords had been able to recover the costs of dealing with the RTM claim from the RTM company at the end of the process. Now, in a non-contentious claim, the landlord cannot recover any of its costs from the RTM company or the participating leaseholders.

The government is also consulting on the charges leaseholders – and homeowners on freehold estates – pay and the services they receive. One of the most significant challenges for leaseholders under the previous system was the inconsistent format of service charge demands. Once implemented, the new format will require landlords and managing agents to ensure that all demands on leaseholders are consistent, clear, and easy to understand. Any deviation from this prescribed format will render non-payment or late payment provisions in the lease unenforceable, providing a powerful incentive for landlords to comply.

While measures in the LAFRA 2024 will reduce excessive fees for leaseholders, many leaseholders may not fully understand their new rights under the reforms given the complexity of the act. Property agents will need to stay up-to-date with the regulations to guide tenants effectively, especially when it comes to disputes or questions about lease terms. Agents who manage leasehold properties will also need to maintain clear communication with freeholders, ensuring that lease terms comply with the new rules.

Despite the work already undertaken, the government intends to introduce further reforms. The Minister for Housing and Planning, Matthew Pennycook, has long favoured moving away from the leasehold system. As a result, the government has proposed a Leasehold and Commonhold Reform Bill, which will be introduced to parliament before the end of 2025. The bill would aim to make commonhold the default tenure for new flats and allow individual properties within a building or larger development to be owned on a freehold basis.

High quality property managing agents are likely to benefit from the proposed measures. Pennycook has made it clear that agents already play a key role in managing multi-occupancy buildings and freehold estates, and their importance will only increase with the proposed commonhold reforms.

Under the proposed model, agents would be employed by commonhold associations to assist in the day-to-day management of a building, and it is anticipated that almost all new commonhold developments, especially larger or more complex buildings, will be established with a managing agent to help run the site on their behalf. This could drive demand for agents with a strong track record of block management. The government is also considering whether it should be mandatory for a managing agent with appropriate expertise to look after high-risk buildings. Furthermore, the government is consulting on proposals for mandatory qualifications for agents and is highly likely to include measures regulating training and standards for agents in the proposed commonhold bill.

So far, the government made significant progress in enacting its leasehold reform agenda. Despite legal challenges to LAFRA 2024 and opposition from landlords to reforms, Matthew Pennycook and Angela Rayner seem determined to press ahead. Therefore, we can expect major changes to leasehold, commonhold and freehold regulation over the course of this parliament that will present new obstacles and opportunities for the housing sector.

Policy Spotlight: Energy and Net Zero

Foreword

Scott Dodsworth, Managing Director and Senior Partner at GK Strategy

The central part of Labour’s election pitch to the country last year was unlocking economic growth. Over Labour’s first year in office, it remains clear that Energy Secretary Ed Miliband, with the backing of the Prime Minister and Chancellor, sees delivering energy security and the net zero transition as central to that.

The consistently high cost of energy, against the background of an ongoing cost of living crisis and struggling public finances, is contributing to growing scepticism about the transition to net zero – largely from the Conservatives under Kemi Badenoch, and an increasingly popular Reform party. Despite this, the Prime Minister has doubled down on net zero as part of the UK’s industrial strategy.

After something of a false start after the 2024 general election, the government is now moving at pace. It sees the remainder of 2025 as a crucial period to deliver on its promises to an impatient electorate: to bring down energy bills and push to 95% clean power by 2030. Since the spring, we have seen the government publish its Industrial Strategy, of which green industries were seen as a frontier sector. Ed Miliband also secured a healthy departmental budget in the June spending review despite cuts elsewhere. These, together with the wider cross government approaches to planning, infrastructure and the National Wealth Fund, are all signals that the government is kicking up a gear on its net zero delivery.

To deliver on its promises, the government is looking for solutions from businesses. There is a renewed willingness across Whitehall to engage with those who can partner with government to unlock the private investment to fund these commitments at the pace and scale required. There is also impatience within mission-driven departments to ‘get on with the job’ – including for DESNZ’s ‘Mission Control’ – so speed is of the essence. Good government relations have rarely been so important to businesses that want to be on the right side of the relevant policy debates underpinning this mission.

Our cross-sector and connected team at GK Strategy is immersed in energy and industrial policy. We work to support businesses and investors to better understand the political and regulatory environment and align our advisory services around your strategic and commercial aims. This report takes a closer look at the key pillars of the government’s net zero agenda: energy efficiency, grid and power supply, and transport decarbonisation.

In politically febrile times like these, it is important that organisations are consistently making their case to government so that they can maximise opportunities where they arise, as well as mitigate risk. We look forward to working with you to realise opportunities.

Energy efficiency – the quiet engine powering Labour’s net zero agenda

Sam Tankard, Senior Associate

In the race to net zero, energy efficiency is perhaps one of the less glamourous parts of the policy puzzle. The government’s mission to achieve 95% clean power by 2030 has dominated public messaging and policy bandwidth. But while clean energy generation captures the headlines and the government’s attention, reducing demand through insulation and electrified heating remains one of the more cost-effective levers available to a government with little money to throw around.

Retrofit and ‘fabric first’ measures – such as insulation upgrades and draught-proofing – are proven, scalable technologies that deliver immediate benefits, not least on household bills. After all, the cheapest energy is that we don’t use. With many households still feeling the impact of the cost-of-living crisis, voters are likely to judge the success of the energy transition by whether they feel it’s becoming cheaper to heat their homes. In that context, energy efficiency should be seen as not just central to climate strategy, but to the government’s economic and electoral strategy.

The Warm Homes Plan: A consolidated approach

The government’s flagship Warm Homes Plan aims to consolidate and scale existing schemes including the Warm Home Discount, Boiler Upgrade Scheme, and the Social Housing Decarbonisation Fund. It also introduces new Minimum Energy Efficiency Standards (MEES) across both the private and social rented sectors. Energy Secretary Ed Miliband successfully secured the full £13.2 billion needed to deliver the scheme in the June spending review – no small feat in a fiscal environment defined by restraint. This commitment is a clear signal of Labour’s intent to start to put energy efficiency on a par with clean energy generation – and of Ed Miliband’s strength within the Cabinet, despite the negative briefings against him.

Will the Plan deliver a genuinely integrated approach to home decarbonisation, or is it a rebranding of legacy Conservative programmes? The recent restructure of DESNZ – giving the Plan its own delivery team – suggests it will. Energy efficiency is also being linked to job creation, supply chain development, and regional growth. However, if this ambition is to be realised at scale, subsidies alone and piecemeal grants will not suffice. The sector needs a long-term investment framework that can attract institutional capital and mobilise private finance – one that de-risks retrofit projects, supports innovation across the supply chain and gives confidence to the investor community. This framework has not yet been brought forward, and its absence may hamper large-scale investment in the space.

Regulation will drive the market

Regulation is beginning to move the dial. Reforms to the Energy Performance Certificate (EPC) methodology will require more homeowners and landlords to invest in fabric-first improvements, smart controls, and low-carbon heating. From 2026, new MEES requirements and an updated Decent Homes Standard are set to kick in, compelling landlords to upgrade their properties by 2030. These reforms are expected to drive significant market demand through the remainder of this Parliament – providing a welcome growth stimulus for retrofit supply chains, innovators and engineers.

Clean heat still stuck in second gear

Progress on the clean heat transition continues to lag behind the government’s targets. Labour has consulted on expanding the Boiler Upgrade Scheme to include air-to-air heat pumps and heat batteries, reflecting a desire to support a range of technologies. However, political caution looms large. The backlash faced by Germany over heat pump mandates has made ministers wary of appearing prescriptive, particularly where upfront costs for consumers, and particularly for lower income households, remain high for these technologies.

Heat pumps are still significantly more expensive than gas boilers, both in terms of installation and ongoing energy costs. Public funding falls short of matching the scale of ambition set by national targets. As of May 2025, the UK had just 412 heat pumps per 100,000 people, compared to over 3,000 per 100,000 across comparable European countries, highlighting the significant implementation gap in the UK.

The electricity pricing trap

Underlying many of these challenges is a structural pricing problem. The UK’s gas-heavy energy mix means that gas sets the marginal price of electricity 98% of the time, compared to just 39% in other European markets. As a result, electricity remains artificially expensive, making the economics of clean heat harder to justify. Labour’s clean power push aims to shift this overreliance on gas but change will take time.

In the interim, the government is considering options such as rebalancing environmental levies away from electricity and onto gas, or absorbing them into general taxation. These options are politically sensitive and the nettle is yet to be grasped. The recent debate over zonal pricing in the electricity market review signals deeper tensions in how costs are distributed geographically and socially.

The pricing debate about who pays for energy in a way that is fair will be back soon enough. How this will impact the decarbonisation of heat will be one businesses should follow closely, and take the opportunity to share their view accordingly.

Energy efficiency may not dominate the net zero headlines, but for a Labour government seeking to deliver tangible economic outcomes, reduce bills, and meet its climate targets, it is increasingly central to the political and policy equation. The coming months will reveal whether this this is matched by delivery, investment, and a market framework robust enough to make retrofit a genuine national success story.

Clean power meets smart tech

Noureen Ahmed, Adviser, and Arth Malani, Researcher

The government’s Clean Power 2030 Action Plan, published late last year, positioned wind and solar energy as the backbone of the UK’s future energy system.

It also highlighted how these developments will support the rapid growth of Artificial Intelligence (AI) and the digital infrastructure underpinning it, particularly data centres. It is no surprise that clean energy and AI remain central pillars for this government, as they underpin both economic competitiveness and energy security in an increasingly volatile global environment.

The government is committed to securing a cost-effective, low-carbon energy system while catalysing the growth of new energy and technology industries. Leveraging cutting-edge technologies such as automation and AI will be crucial to accelerating the decarbonisation of the grid, reducing emissions, and enhancing system resilience. Against a backdrop of rising geopolitical tension and global energy market instability, the Action Plan – and the subsequent strategy documents like the Clean Energy Industries Sector Plan and Solar Roadmap – underscore the urgency of fortifying the UK’s energy infrastructure. These initiatives also work towards derisking much of these large scale renewable generation projects – particularly through changes to the contracts for difference auction programme.

Grid connections still an obstacle

One of the most pressing challenges identified in recent strategy documents is the exponential growth of the grid connection queue, which has expanded more than tenfold over the past five years. Financial and regulatory barriers have slowed progress, stalling renewable projects at a time when urgency is paramount. In response, the government is pivoting toward a more agile, readiness-driven grid connection regime. By reforming planning frameworks and moving toward a “get on or get out” approach to the queue with Ofgem and the National Energy System Operator, the government is sending a strong signal to renewable developers that this government is about more than just subsidies to stoke supply. The intended outcome is twofold: accelerating the deployment of renewable infrastructure while enabling the co-location of energy-intensive facilities, such as data centres and transformers, near these clean power sources. This strategic alignment demonstrates the increasingly symbiotic relationship between AI technologies and the energy transition.

This approach reflects the growing economic footprint of the UK data centre industry, which currently contributes £4.7 billion in Gross Value Added (GVA) annually, a figure projected to rise to £44 billion by 2035. Unlocking the productivity and innovation gains associated with AI and data centres will be key for the UK’s global competitiveness. Yet the growth of this sector brings significant energy challenges. As one of the most energy-intensive industries, data centres demand not only increased capacity, but a cleaner, more reliable energy supply to keep compliant with many businesses’ own climate ambitions – as well as the government’s. The path to net zero must therefore keep pace with the evolving needs of the digital economy. A coordinated approach between the Department for Energy Security and Net Zero (DESNZ) and the Department for Science, Innovation and Technology (DSIT) will be fundamental in aligning energy and digital infrastructure planning.

Powering the AI transition

To help navigate these challenges, the government has established the AI Energy Council, a cross-sector forum of energy and technology leaders focused on ensuring the energy system can accommodate the explosive growth of AI. The Council has a dual remit: to guide infrastructure planning for AI-related growth, and to assess the more than 200 bids from local authorities vying for designation as AI Growth Zones – regions earmarked to become hubs for AI development and deployment. These zones sit at the intersection of energy policy and regional growth, dovetailing with the government’s broader devolution agenda, which aims to empower local leadership in strategic authorities to unlock economic potential.

The AI Energy Council has recognised that without targeted interventions in energy security and infrastructure, AI-led growth could stall. Ensuring a stable, clean, and scalable energy supply for AI-intensive industries is not just a technical challenge, but an economic one. Preventing energy-related bottlenecks will be key to enabling innovation across all sectors – from manufacturing and transport to healthcare and financial services. As the UK accelerates its clean energy transition, AI will not only be a consumer of energy but also a catalyst for smarter, more resilient energy systems. AI-enabled grid forecasting, predictive maintenance, and autonomous energy trading are already beginning to redefine how power is generated, distributed, and consumed.

Taken together, these developments mark a new phase in the UK’s industrial strategy – one where the convergence of clean energy and digital technology is central to the nation’s economic, environmental, and geopolitical goals. As such, AI and energy should not be seen as separate policy challenges, but as intertwined pillars of a modern, secure, and sustainable economy.

Little slack in the government’s decarbonisation tightrope, especially for transport

James Allan, Senior Adviser

The government is walking a decarbonisation tightrope. Nowhere is this clearer than in its approach to transport. As the net zero consensus is fracturing, most acutely under building pressure from the right of the British political system, onlookers will have noticed a few shifts in government policy impacting transport decarbonisation. This includes a watering down of the Zero Emissions Vehicle (ZEV) mandate and a previously unthinkable policy position on Heathrow expansion for a Labour cabinet. These are the perhaps inevitable concessions that have to be made in the face of a seemingly undeniable fact: decarbonising the transport sector entails an element of economic trade off.

These two decisions, measured against what Labour committed to in its election manifesto, throw into sharp relief a common critique of this government: that the manifesto’s language was sufficiently opaque to allow for a significant degree of wiggle room. Now in government, there is plenty of talk of change, but a continuing weakness on policy detail and substance, not least concerning transport decarbonisation.’

Understanding the rationale behind the government’s policy choices will be critical for businesses and investors looking to engage with ministers. As policy positioning subtly changes in government from bold rhetoric to balancing economic pragmatism with climate ambitions, sectors such as aviation, freight and automotive will need to recalibrate their expectations. Businesses will need multiple channels of influence as transport decarbonisation spans a range of policy areas, priorities and government departments. For the Department for Energy Security and Net Zero, the focus is clean energy by 2030; for the Department for Transport, it is rail nationalisation and infrastructure delivery.

Backing Heathrow expansion

Expanding Heathrow is a long way off despite the government’s recent support. Ministers have set out four tests for approval, including i) compatibility with the UK’s climate change targets, ii) mitigations to increases to noise pollution, iii) and air pollution, as well as iv) providing economic benefit to all parts of the UK, not just London and the South East. The fast-tracked review of the Airports National Policy Statement will provide substance to these four tests and commitments to sustainable aviation fuel (SAF) are expected to feature strongly when the refreshed policy statement is published later this year.

The justification is clear. The expansion of Heathrow, while mandating that the industry transitions to SAF (which is in short supply globally) is immensely costly and requires high levels of capital investment to deliver. To support the transition, the government is legislating for a revenue certainty mechanism that aims to de-risk and attract private investment into this nascent technology. It is the familiar carrot and stick approach to transport decarbonisation of mandate and incentives.

Mild tweaks to the ZEV mandate

The government’s tweaks to the ZEV mandate reinstated the 2030 target of banning the sale of internal combustion engine (ICE) cars but relaxed the rules around which vehicles can be sold until 2035, including hybrid vehicles and ICE vans, and introduced greater flexibilities for manufacturers. The mixed reaction from the automotive industry suggests that ministers may have struck a workable compromise – a willingness to trade speed for political and economic deliverability.

Key to pulling off the transition to EVs is scaling up the deployment of EV infrastructure and chargers. Consumer confidence to purchase and drive an EV across the country is an important precursor of the transition to EVs. A lack of publicly available chargepoints risks this and stokes the flames of range anxiety often cited as a major barrier to buying an EV vehicle. Government work toward mitigating this risk is chiefly being delivered through the Local EV Infrastructure (LEVI) Fund but buried deep within the spending review published in June was £400 million to support the roll out of charging infrastructure from 2026-27 to 2029-30.

Walking the government’s tightrope

For businesses and investors, the key message is that the government’s transport decarbonisation agenda is no longer linear, but layered, tactical and coloured by a degree pragmatism. Backing Heathrow and making tweaks to the ZEV mandate indicate that the terms of reference are not solely climate related but also economic. Labour’s policy decision making has shifted from the aspirational and broad ambitions set out in its manifesto, to a slow recalibration of understanding better the trade-offs involved. For investors looking to capitalise on transport decarbonisation and businesses operating in associated sectors, the implication is clear: aligning with the government’s transport decarbonisation goals now requires a credible case for job creation and economic growth and cost efficiency. Those that can anticipate and influence shifts in government thinking stand to benefit, while those that wait for clarity may be too late to adapt and overcome.

Contact Information

Contact: 020 7340 1150

Louise Allen // Senior Partner & Chief Executive // louise@gkstrategy.com

Scott Dodsworth // Senior Partner & Managing Director // scott@gkstrategy.com

Lizzie Wills // Senior Partner and Head of Private Equity // lizzie.wills@gkstrategy.com

Sam Tankard // Senior Associate // sam@gkstrategy.com

‘End of Term’ Reflections for Labour

The highs and lows of the first parliamentary year

In its first year since winning the 2024 general election, Starmer’s government has shown intent to implement its manifesto pledges, but whether this has translated into successful policy delivery remains a subject of debate. Ministers have pursued ambitious reforms in areas like trade, education, health, and energy, but they have also faced political turbulence and criticism over policy missteps, particularly around tax, grooming gangs and welfare reform.

Crucially, the government seems to be unable to unlock that elusive growth on which so much of its spending plans depend. Much of Labour’s policy programme is still in its early stages, with a strong emphasis on structural reform in Whitehall and long-term planning which should be commended. However, this emphasis leaves the government with few immediate wins to show the public and, with key reforms still light on detail and outcomes, questions are already mounting about the government’s effectiveness.

On the international stage, however, the Prime Minister has emerged as a confident statesman. His handling of the Trump presidency, securing of trade deals with the US, EU and India, and continuation of the UK’s support for Ukraine have won praise both at home and abroad. This has helped to re-establish Britain’s role as a serious global actor – although notably absent of any meaningful involvement from foreign secretary David Lammy.

Domestically, there has been modest progress on housing and NHS waiting times, but delivery has been hampered by fiscal constraints. But domestic policy also reveals some of the sharpest criticism. The removal of the Winter Fuel Payment from millions of pensioners, presented as a necessary fiscal decision, sparked major backlash and a messy U-turn. The electorate does not expect these sorts of economic decisions from a Labour government, which has resulted in widespread reputational damage from a policy that seems to contradict Labour’s core identity. The increase in employer National Insurance contributions (NICs) has also been poorly received, with concerns over its impact on jobs and wages. On immigration, growing public unease and the government’s mixed messaging has opened space for Nigel Farage’s Reform UK to gain traction and control the narrative.

Overall, the government has had a mixed first year. There was no political honeymoon, with downbeat messaging on the economy, the early ‘freebies scandal’ and unpopular welfare cuts undermining any prospect of ministers picking up some early momentum. Coupled with a challenging economic backdrop, rising support for Reform UK and the geopolitical volatility exacerbated by Trump’s return to power, the need for a recalibration of political and policy strategy is becoming clear. The government’s commitment to its manifesto is not in doubt, but turning that commitment into visible, meaningful results is the test that now lies ahead.

Labour and the business & investor community: a genuine partnership for growth?

Courting investors and businesses was a key part of Labour’s pre-election pitch. The Prime Minister and Chancellor were keen to demonstrate the party’s credibility on the economy and support investment into the UK as part of its wider growth ‘mission’. However, in government, Rachel Reeves used her first fiscal event – the 2024 autumn budget – to increase employer NICs by 1.2%, representing a £25 billion tax hike on businesses. This came alongside increases to Capital Gains Tax and the National Living Wage. The latter measure has been particularly costly for businesses with a large proportion of low paid workers on their payroll.

While the government argued this was necessary to address the fiscal ‘black hole’ it inherited from the outgoing Conservatives and to boost support for low-paid workers, it has done little to inspire confidence in the business and investment community. Indeed, GK Strategic Advisers and former ministers David Laws and Rob Halfon both warn that the employer NICs rise has been particularly damaging to the government. This is despite early positive decisions on infrastructure and commitments to speed up planning processes. Since last year’s budget, ministers have been playing catch up in their efforts to restore confidence amongst businesses and stimulate private investment at a time when geopolitical uncertainty is threatening to wreak havoc on the global economy.

President Trump’s ‘Liberation Day’ announcement on 2 April, which saw his administration unveil sweeping global tariffs, was a watershed moment and one which Starmer deftly navigated. The US-UK Economic Prosperity Deal sees the UK sidestep many of the Trump’s tariffs and, amongst other provisions, allows UK car manufacturers to sell vehicles to the US at a 10% tariff rate and cuts tariffs on UK aerospace exports to zero.

Despite Starmer’s success on the international stage, challenges lie ahead for the government in its relationship with businesses and investors. The Employment Rights Bill is due to complete its passage through Parliament in the autumn. The legislation introduces a new package of workers’ rights, including day one employment rights, ending the use of certain zero hours contracts and improving access to flexible working arrangements. Many of the measures contained in the bill will be subject to further consultation with businesses over the coming months. It is vital that the government gets the eventual implementation of these reforms right to avoid any further damage to its relationship with the business and investment community.

As parliament rises for summer recess and we take stock of the government’s first full parliamentary year, it is fair to say that the public-private partnership for growth that Labour first envisaged when it came to power has not yet materialised. As put by GK Strategic Adviser and former Health Minister Steve Brine: “The growth mission, which sits at heart of the government’s plan to get re-elected, has been hampered by uncertainty from the shifting taxation landscape and the many reviews and consultations that are yet to translate into firm policy direction.”

Starmer will need to translate the success he has found on the international stage to his domestic agenda if he hopes to bring businesses and investors back on side and enable them to deliver the economic growth upon which so much of his government’s policy agenda relies.

The ‘ones to watch’

Westminster has been speculating for several months as to whether the Prime Minister will instigate a cabinet reshuffle before the end of 2025. Though it may seem like a distant prospect, many are already keeping an eye on some Labour MPs who could be next in line for promotion.

Peter Kyle MP: With experience as a former Special Adviser in the last Labour government, Kyle is a slightly more seasoned voice in the Labour ranks than other rising stars. Described by Steve Brine as “hugely gifted”, the Science and Tech Secretary has consistently impressed, particularly in his initiative to coordinate a unified cross-government approach to data, digital and AI, and as a talented and dependable ‘Minister for the Morning Round’.

Torsten Bell MP: Formerly the chief executive of the Resolution Foundation and a Labour party aide during the 2008 financial crisis, Bell knows the ins and outs of policy, economics and politics. Though a fresh-faced Labour MP, part of the 2024 intake, he is already holding ministerial positions across both HM Treasury and the Department for Work and Pensions, and is expected to continue to rise through the ranks.

Miatta Fahnbulleh MP: Taking over the seat Harriet Harman represented since 1982 was no small feat, but Fahnbulleh has not disappointed. Like Bell, Fahnbulleh was elected in July 2024 and was immediately appointed to a junior ministerial role. A former Cabinet Office official and CEO of the New Economics Foundation, her experience has made her a capable MP and minister. Her reputation for going above and beyond has not gone unnoticed, with David Laws remarking she is “a bright junior minister who has already impressed her colleagues”.

Josh MacAlister MP: Otherwise known as education and social care’s ‘golden child’, MacAlister entered parliament with a reputation that precedes him. MacAlister was chosen by the Conservative government to conduct an eponymous review of children’s social care in 2021. Now serving as the parliamentary private secretary to Pat McFadden – one of the government’s most instrumental figures – MacAllister has been carefully watching the recommendations of his review being implemented through the Children’s Wellbeing and Schools Bill. He is certainly proving himself to be successful campaigner and capable MP.

The next 12 months, and beyond…

For David Laws, the priority for the next 12 months is “growth”. The Chancellor faces the daunting task of stabilising the public finances while avoiding tax rises in the autumn. However, recent briefings suggest that tax rises, particularly on higher earners, seem inevitable unless economic performance improves. Her Mansion House Speech set out Reeves’ plans to unlock growth in the financial services sector, while trade deals struck signal an important first step towards a more outward-facing agenda. A more pragmatic approach to Europe, while politically fraught, remains a low-cost, pro-business lever available to the government to recover some of the growth lost post-Brexit.

Another priority is the ‘retail offer’ that helped Labour win in 2024: NHS reform. Steve Brine argues that meeting the 18-week waiting time target for NHS elective care would be seen as a real mark of success. Elsewhere, there are the structural reforms underway for planning and devolution that were fundamental to the “decade of national renewal” promised during the election campaign. Deputy Prime Minister Angela Rayner, empowered and ambitious within the government, is quietly progressing with this agenda with little sign of slowing down.

David Laws suspects that we will also see those more talented ministers begin to demonstrate progress in exciting vanguard sectors like technology, AI and clean energy: areas which are vital to enhancing the UK’s economic position.

Measurement of success in May

The real test of success will be the elections in major cities and, significantly, in the Welsh and Scottish parliaments in May 2026. While midterm elections are often tricky for incumbent governments, Labour would not have been expecting to weather such dissatisfaction so soon, and a poor performance at the May 2025 local elections was an early warning sign of this.

The traditional dividing lines of left and right, class and geography, are no longer accurate measures of voter sentiment. Rather, the electorate is split into groups defined less by ideology, and more by attitudes to institutions, cultural, social and economic issues. Steve Brine emphasises that support for the two main parties has always been fluid. However, in 2024, Labour and Conservatives collectively won just 54% of the vote – a post-war low. Recent polling showing double digit support for smaller parties like the Greens suggests fertile ground for insurgent parties that are attracting support from new parts of the electorate that they wouldn’t normally have.

Technocrats vs. Populism

GK Strategic Adviser and former Care Minister Phil Hope warns that the rise in populism is the “biggest threat to our democratic institutions”. For No.10, the immediate concern is Reform UK. The Prime Minister’s Chief of Staff, Morgan McSweeney – who is often characterised as the architect of Starmer’s premiership – believes that right-wing populism must be defeated by showcasing competent government. In practical terms, this means delivering real improvements to the way people interact with public services, and being tougher on immigration, to reassure disenfranchised, Reform-leaning voters that their economic and cultural concerns are being addressed.

While Reform grabs the headlines, Labour also faces mounting dissent from the left. Disillusioned, younger voters are drifting towards alternatives that they believe are more convincing and radical on climate, equality and security issues. While 6% of Labour’s 2024 voters have moved to Reform, three times as many have shifted to parties of the left. Recent polling gains for the Green Party and a new party led by Jeremy Corbyn underscore this trend. It is worth remembering that Corbyn secured 40% of the vote in 2017 compared to Starmer’s just 33.7% in 2024. For a Labour leadership that has worked hard to marginalise the hard left, this insurgent left-wing movement could expose vulnerabilities in Labour’s emerging strategy of wooing Reform voters on issues such as immigration and the so-called ‘culture wars’.

Clowns to the left of me, jokers to the right

Labour now finds itself squeezed on both its political flanks, while struggling to articulate a unifying strategy for the broad, fragile coalition it assembled in 2024. Without a coherent narrative, it risks alienating voters whose priorities and values increasingly diverge.

In political terms, there is still a long way to go until the next election. But in the absence of a compelling narrative or delivery on issues such as immigration, Downing Street faces a difficult task to work out who its voter base is and what it wants. As GK’s strategic advisers all note, an economic upturn would relieve much of this pressure. But with that unlikely in the next 12 months, the consequences will be felt at the ballot box in May 2026 – where Labour’s already narrow share of the vote could be eroded further.

Scott Dodsworth // Senior Partner & Managing Director // scott@gkstrategy.com

From farm to fork: An ambitious food strategy published by Defra

The government has published its food strategy, setting out a vision for a healthier, more affordable, sustainable and resilient food system. It is ambitious in scope and designed to reconcile often competing objectives from farm to fork.

The food strategy identifies three interlocking dynamics of the UK food system:

i) a junk food cycle driven by our appetite for highly processed, energy-dense foods and the strong commercial incentives this creates to produce foods high in sugar and fat,

ii) the invisible cost to nature which fails to reward sustainable and environmentally friendly food production, and

iii) a resilience gap that means the UK is highly exposed to multiple and increasing risks, such as climate change.

The next step for ministers and officials is to develop an implementation plan, as well as metrics and indicators to measure progress towards achieving the strategy’s ten priority outcomes. This will take time and require ministers to engage with industry and business to ensure the government’s transition to a ‘good food cycle’ is achievable. It will also need to align with forthcoming strategies in Defra’s to-do list to deliver real, joined-up change across the entire food system. To name a few – the Land-Use Framework, the Food and Farming Decarbonisation Plan, the Farming Roadmap and Farming Profitability Review, and the Circular Economy Strategy.

What does the food strategy mean for agri-tech?

There is a huge opportunity for businesses in the space to engage with government off the back of the publication of the food strategy. Ministers clearly see innovation as critical to resolving system challenges in everything from public health to food security. Agri-tech businesses should take note: the government is not only signalling interest but actively investing in solutions that can deliver measurable impact.

To maximise this opportunity, businesses should look to demonstrate how they can support the government in achieving the food strategy’s core objectives – boosting productivity, enhancing resilience and delivery environmental sustainability. Collaborating with early adopters to demonstrate real-world use cases can help build a compelling evidence base that convinces policymakers of a solution’s viability and impact. Engaging with policymakers means staying ahead of regulatory change and shaping policy and market reforms to establish pathways to commercialisation.

Agri-tech may well represent the silver bullet policymakers are searching for, but unless the sector speaks up and showcases its impact, those solutions risk going unnoticed.

If you need help with demonstrating how you can become a key player in the government’s food strategy, contact GK Strategy today.

Sky’s the limit: Why agri-tech should engage on drone law reform

Drones and autonomous flight technologies are set to revolutionise how we travel, deliver goods and produce food, and the government has taken note. As part of a comprehensive three-year review into the regulatory framework of autonomous flight and the use of drones, the Law Commission has launched a second consultation. Its three-year review is nearing completion with recommendations expected to be published by early 2026 and will shape how this fast-moving sector evolves. For innovators in agri-tech and beyond, the opportunity to help design the rules that will govern a sky filled with commercial drones is now.

Flying free from EU constraints

Legislative agility to facilitate innovation is the ambition and ties into the government’s wider economic growth agenda. Aviation law in the UK is prescriptive and duly geared towards the passenger aviation sector. With the UK no longer bound by EU aviation rules, policymakers can now craft a more bespoke, agile regulatory environment that encourages experimentation, accelerates innovation and attracts investment.

However, the government has identified a possible post-Brexit dividend as the current regulatory regime is largely a carryover from current EU law. This presents a unique opportunity to break away from legacy constraints and design a tailored regime for UK-specific innovations and ambitions. A more flexible regime could fast-track the safe deployment of cutting-edge drone technology and give UK-based companies a first-mover advantage, enabling them to export innovations globally.

Drones on farms: Unlocking agri-tech potential

Commercial applications of drone technology are wide ranging. For the food and agriculture sectors alone, drones could revolutionise farming operations:

Precision agriculture from monitoring crops based on thermal sensors to scanning fields and accurately predicting crop yields.
Agricultural sprays deploying pesticides, fertilisers and herbicides thereby reducing labour costs, use of chemicals and their environmental impacts, and identifying diseases or pests to prevent wider outbreaks.
Irrigation management by identifying drainage issues to drought-stressed areas and enabling the more efficient use of water and real-time crop water requirements.
Crop insurance and assessment by providing accurate, unbiased and detailed imagery required by insurers to speed up claims processes.
Harvesting assistance by providing crop maturity assessments to more effectively plan harvesting schedules and boosting the quality of crop yields.
Forestry and orchard management by measuring canopy growth, quantifying tree populations and aiding pruning schedules.

The economic case for drone-powered agriculture

There are many economic benefits – from reduced labour and input costs through more precise allocation of resources, to increasing crop yields via data driven decision making. Lower chemical and water usage not only cuts costs but also supports environmental sustainability. For businesses able to make the capital investment, drone technology is set to become a core component of modern agricultural management, policymakers should be engaged on this.

Government support signals lift-off

There is clear momentum in government to embrace drone technologies. The aviation minister has confirmed £20 million in funding for new flight technologies, including £5m earmarked for the Future of Flight Challenge. These initiatives could create government-backed testbeds for agri-tech solutions and help de-risk businesses ready for investment. For innovators in the sector, this is a moment to engage directly with policymakers, to shape the regulatory framework and unlock the commercial potential of drone led farming. The Law Commission’s second consultation is open until 18 July 2025, and alongside a wider engagement programme, this is a key opportunity to have your voice heard and set the direction of travel for the sector.

Food standards or economic growth? A very British trade-off

Recent months have been busy for Prime Minister Keir Starmer, having secured trade agreements with the EU, USA and India which promise to rewrite the future of the food and agriculture sectors. With these agreements having largely been welcomed by the UK food industry, attentions will now turn to ensuring the UK remains firm in a turbulent geopolitical environment to uphold future protection of UK food production.

UK-US

Among the most headline-worthy agreements is the revised trade policy for the beef and bioethanol sectors between the USA and UK. The Prime Minister allayed tariff concerns and secured reciprocal access to US beef markets, permitting British farmers to export up to 13,000 metric tonnes of beef per year. In return, the 20% tariff on US beef imports has been removed, as have tariffs on US ethanol and bioethanol.

The government has assured the food industry that closer ties to the US market will not be to the detriment of UK food standards. Concerns over chlorinated or hormone-treated meat, which is legal in the US but banned in the UK, have frequently been raised by British farmers and consumers. Defra secretary, Steve Reed, clarified that British standards will be upheld and agricultural food imports must still adhere to UK standards. The UK has previously come under pressure from the USA to dilute these standards.

While the UK appears firm in its resolve this time around, some in the sector are concerned that competition with cheaper and lower quality international products might push British farmers out of the market and force the government to revise its standards. The National Farmer’s Union has expressed concern that US beef might undercut British beef as it is often cheaper, making it an attractive product to hospitality and catering groups but putting British meat at risk. The food sector should be vocal about holding the government to account on food safety and standards, and promoting British products, in order to insulate the sector from potential risks.

While the agreement presents a series of opportunities for British farmers to capitalise from profitable US beef markets, the industry must closely monitor the UK’s dedication to strict food standards.

UK-India

The UK has signalled its interest in forging closer economic ties with India, with the IMF predicting it to be the third largest economy by 2030. The UK-India Free Trade Agreement commits India to reduce tariffs on 90% of UK exports, with the UK in return scrapping tariffs on 99% of Indian exports. Similarly to the US agreement, it is hoped that this will reap long-term benefits for British farmers.

Lamb exports to India, which had previously been subject to a 33% import duty will now face no cost, increasing British competition in Indian markets. Other UK goods including chocolate, salmon and cod will also be tariff free, and alcohol including whisky and gin will see their tariffs halved to 75%.

Following the deal, the government has confirmed that British food standards will be upheld. However, Indian use of pesticides has been raised by farming and environmental groups who have suggested this could cause risk to UK consumers. The Pesticide Action Network has labelled the deal a ‘toxic trade’, given the higher number of highly hazardous pesticides that India permits on its produce. As concerns have been mounting following both the India and USA agreement, businesses operating in the food and farming sector should consider how they best communicate their concerns to government.

UK-EU

Rounding off a busy month of trade negotiations was the agreement with the EU. A natural ally on the importance of high food standards, the EU deal was a slightly simpler process given there was no pressure to dilute the UK’s position on food and welfare standards. The deal removes some routine checks on animal and plant products, easing the flow. Additionally, the deal enables raw meat including burgers and sausages to be sold back to the EU for the first time following Brexit under new sanitary and phytosanitary (SPS) agreements.

While the trio of trade agreements will significantly broaden opportunities for British farmers and help boost UK competition, many fear they will ultimately dilute the government’s commitment to food and welfare standards. The government has signalled that it is not willing to jeopardise its commitment to health and food standards – yet. However, food and farming businesses must remain alert to the threat that cheaper overseas products can have on British markets and the potential for costs to be saved through lower food safety regulations.

Despite the government’s commitment to “Back British” produce so that 50% of food supplied in catering contracts comes from British farms, it is essential that Defra is held to account on this. Keeping on top of government policy and actively communicating the importance of food standards to policymakers will be key to protecting British food.