Category Archives: Business

The GK Post-Election Breakfast Event

GK Strategy Adviser Rebecca McMahon reviews the GK Post-Election Breakfast Event.

The coming weeks and months will see the new Labour government pressing ahead with its agenda for government, and getting to grips with a number of difficult challenges facing the UK, from sluggish growth, to growing NHS waiting lists, to precarious local authority finances.

GK Strategy was delighted to host a panel discussion this week looking at how the government will tackle some of these issues, and how it will prioritise its time and resources to deliver on its ambitious policy pledges. GK was joined by former Minister and Health Select Committee Chair, Steve Brine, and Head of Research at Labour Together, Christabel Cooper, who shared their insights into the government’s approach, and some of the inevitable obstacles it will face in the coming months.

Both panelists agreed that while the list of public policy challenges inherited by Starmer and his team is by no means a short one, Labour ministers will now be deciding on areas where urgent action is most needed.

Reforming the UK’s planning system was identified as one of the priority areas for Starmer’s new administration. Our two panelists noted that the new Government’s ambition in this area has already been illustrated by repealing the de facto ban on onshore wind, re-introducing mandatory housing targets, and pledging to update the National Planning Policy Framework via consultation by the end of the Party’s first month in power.

As a policy area with implications for multiple sectors – including housebuilding, the green economy and major infrastructure– planning reform to unlock private investment will be at the core of the new Labour Government’s agenda. As Chancellor of the Exchequer Rachel Reeves set out in her first speech following her appointment, its ultimate success will rely on “unlocking private investment that we so desperately need”.

Healthcare and the future of the NHS was another policy area which featured prominently. Steve Brine pointed out that under current spending plans, funding for the health service is projected to rise at a lower rate than during the austerity years. Meanwhile, the NHS Workforce Plan continues to be underfunded and the outcome of the Health Secretary’s talks with the junior doctors uncertain. He noted that while the Government will soon have to make difficult spending decisions, there would be an emphasis on creating an investor-friendly NHS to support Labour’s ambitions to “crowd in” private investment to improve efficiency and health outcomes.

There was a consensus that Labour’s perspective on the use of the private sector in supporting the delivery of public services is a pragmatic one. Labour’s ‘wide but shallow’ majority – achieving 64% of parliamentary seats on roughly 34% of the vote – means that the Party will need to reassure voters that it is making headway on its policy programme. Our panelists agreed that working with the private sector will be key to successfully demonstrating this.

Please do get in touch via rebecca.mcmahon@gkstrategy.com if you are interested in attending future events or would like to set up a call to discuss the year ahead in politics.

What a Labour government means for UK immigration policy

Immigration will be a major point of contention in the upcoming General Election. Britain’s exit from the EU and the introduction of the Points-Based Immigration System was heralded as the end to free-movement and the beginning of the UK regaining control of its borders. However, with record high net-migration figures in recent years and significant numbers still crossing the Channel in small boats in the hope of successfully claiming asylum, politicians continue to grapple with potential solutions to this seemingly intractable challenge.

Labour remains well ahead in the polls and is increasingly likely to form a majority government. The Party has committed to reduce net migration and has pledged to reform the Points-Based Immigration System “so that it is fair and properly managed, with appropriate restrictions on visas, and by linking immigration and skills policy.”

Labour also plans to strengthen the role of the Migration Advisory Committee – the Government’s immigration adviser – and establish a framework for joint working with skills bodies across the UK, the Industrial Strategy Council and the Department for Work and Pensions. The Party hopes to end the UK’s “long-term reliance” on overseas workers in some parts of the economy by bringing in workforce and training plans for sectors such as health and social care, and construction.

All these measures point to a more strategic approach to immigration under an incoming Labour administration. The Party recognises that overseas workers and the skills they possess will play a key role in delivering the economic growth which is so central to Starmer’s agenda for change. However, the Party is likely to take a dim view of sectors deemed to have become too reliant on foreign workers without making sufficient investment in upskilling the UK’s domestic workforce. Labour is expected to support employers with this transition, although we anticipate repercussions those who fail to adhere to new workforce and training plans as the Party looks to present itself as tough on immigration.

Starmer is also likely to benefit from rapidly falling net migration which he can present as a quick win in his efforts to reduce the UK’s reliance on overseas workers. Over the past 18 months, successive Home Secretaries have implemented reforms to visa rules affecting international students, skilled workers and care workers to reduce arrivals to the UK. Chair of the Migration Advisory Committee, Professor Brian Bell, has said that these measures are having a far bigger impact than originally anticipated and could see net migration fall to between 150,000 and 200,000 by September 2024. This would represent a considerable drop from the high of 745,000 in 2022.

However, it is unlikely that a significant fall in net migration will enable a Starmer-led government to materially relax the UK’s visa rules. The likely election of Nigel Farage for Reform UK will see a continued focus on immigration in the next Parliament and Labour will be keen to dispel any suggestion of being the party in favour of open-door immigration.

Businesses operating in sectors which rely on overseas workers should be actively engaging with a likely new Labour government to help shape the finer details of the Party’s policy proposals. New ministers will need support to understand what is possible in relation to the proposed workforce and training plans, and what support businesses need to enable the recruitment of domestic workers in these roles.

Please get in touch via email at hugo@gkstrategy.com if you would like to discuss Labour’s approach to immigration policy and what it will mean for your business.

Disrupted Global Supply Chains: Is a Strategic Shift on the Horizon?

GK Adviser Felix Griffin looks at the forces disrupting global supply chains and explores how industries and governments are adapting to this ‘new normal.’

Beyond shortages and delays: the existential challenges facing global supply chains

The intricate network of global supply chains currently faces a confluence of unprecedented challenges. The initial shockwaves of the COVID-19 pandemic exposed vulnerabilities in meticulously planned production and transportation systems. While there were tentative signs of recovery in 2023, geopolitical developments, like the war in Ukraine and heightening tensions in the Middle East, have exacerbated disruptions, impacting the flow of critical resources. This is compounded by the growing impacts of climate change, which manifests in extreme weather events that disrupt production and transportation, highlighting the limitations of just-in-time manufacturing models. Inflationary pressures are squeezing margins for businesses and impacting consumer spending due to rising costs of raw materials and energy. Labour shortages in many industries add another layer of complexity, creating bottlenecks and hindering smooth operations.

The consequences of these pressures are far-reaching. Consumers face significant price hikes across various goods, driven in part by supply chain disruptions. Shortages of certain products are becoming commonplace, and even when available, delivery times have significantly increased. Businesses are caught in a precarious position, struggling to meet demand while grappling with rising costs and the potential for product scarcity.

The question remains: are these disruptions a temporary blip or a sign of a new normal? Experts suggest that we are entering a new era for global supply chains, one that necessitates a paradigm shift towards increased resilience. Businesses need to adapt and become more agile to navigate this increasingly complex landscape. Diversifying their supplier base and production locations can mitigate risk by reducing reliance on any single geographic region. Nearshoring, the practice of relocating production closer to consumer markets, can lessen dependence on long-distance transportation, which is vulnerable to disruptions and rising fuel costs. Technological advancements offer a compelling solution where they can be realised. Investments in automation and data analytics can enhance efficiency, transparency, and even enable real-time adjustments to production based on fluctuating demand.

Governments themselves play a crucial role in ensuring supply chain integrity. Strengthening import/export controls and fostering domestic production of critical goods can lessen reliance on potentially volatile regions. Fostering international cooperation on supply chain diversification and transparency is proving to mitigate risks and ensure access to essential resources during periods of heightened tension. Echoing the concerns of Deputy Prime Minister Oliver Dowden, this new era necessitates a reassessment of national security risks embedded within globalised supply chains. Dowden aptly pointed out, in a recent address at Chatham House, that while globalisation has brought economic benefits, it has also exposed vulnerabilities. The recent actions announced by the UK government, including a review of Outward Direct Investment (ODI) risks and an update to the National Security and Investment (NSI) Act, serve as a model for other nations. These steps acknowledge the potential for exploitation by hostile actors, as highlighted by Russia’s manipulation of gas prices and China’s use of economic coercion. By working collaboratively with the private sector, governments can play a crucial role in building a more resilient and secure global supply chain network for the future.

Building a more resilient and adaptable supply chain network is not without its challenges. It requires a strategic shift in perspective and potentially higher upfront investment. However, the long-term benefits far outweigh the initial obstacles. By collaborating effectively, businesses and governments can foster a more robust system that ensures a smoother flow of goods, minimises disruptions, and ultimately benefits all stakeholders, from manufacturers and retailers to consumers across the globe.

How can Public Affairs become more Inclusive?

GK Advisers Noureen Ahmed and Annabelle Black discuss how the public affairs sector can improve inclusivity and share some thoughts on their own experiences as women working in public affairs.

Much more work is needed to represent and retain women working in public affairs

When considering how public affairs can be more inclusive, it is important to acknowledge the historical exclusion of women in politics more broadly. Women make up just 27% of the Cabinet, 35% of the House of Commons, and until 1997, there had never been more than 10% of seats held by women. However, the narrative has been changing as MPs speak up about their experiences in Parliament – an inquiry was launched into Sexism in the City in 2023, and there are currently 226 female MPs, the highest number ever to sit at the same time.

Whilst progress is being made in Westminster, the public affairs sector still has room to improve. Men continue to dominate senior roles in the industry, with just 22% of senior management teams being made up of more women than men. Whether it is because of caring responsibilities, inflexible workplaces, or gendered ageism, women are underrepresented in senior positions and quitting at the peak of their careers. This trend exacerbates financial disparities, as women typically retire with average pension savings of £69,000, compared to men with £205,000.

For these reasons, the public affairs sector must work towards bettering their flexible working and menopause policies, defeating sexism and ageism in the workplace, ensuring full transparency about pay structures, and offering benefits such as parental leave and childcare assistance. Gender diversity in senior leadership teams is imperative for representation, reducing the gender pay gap, and challenging gender stereotypes. It also provides young women aspiring to work in the sector with role models, helping them navigate the industry and the barriers they may face.

Public affairs is an exciting industry to work in. As advisers at GK Strategy, we enjoy working with a range of clients and seeing firsthand how politics sits at the heart of what businesses want to achieve. Equally, the challenge of developing the right support programme for clients and seeing the difference thoughtful policymaker engagement makes for them is fulfilling.

Whilst we feel that progress is starting to be made in the industry to improve inclusivity, there is still a discernible difference between men and women in the sector, particularly when it comes to confidence, career progression, and pay discussions.

It is imperative that we make the public affairs space as inclusive as possible for all women. There are many women who are conscientious, ambitious, and determined and should be provided with the right support to help bring their goals to life. I’m grateful to be working at GK, working with women in senior and junior positions, all of whom are confident, inspirational, and truly brilliant.