Category Archives: Business

Labour’s new era for agriculture: Can political stability drive agri-tech innovation?

GK Senior Adviser James Allan analyses the government’s agriculture policy plans and the opportunities that could arise for investors.

With the Labour government now in power, some may wonder if the food, farming and agriculture sectors are about to see a major shift – a shift from being an important constituent of the then Conservative administration of 14 years to lower down the political list of priorities within Labour’s “mission led” government.

The Autumn Budget on 30 October will partly address this concern and end the speculation about potential changes to agriculture property relief and Defra’s agricultural budget. But with a Party of a different political hue now occupying the corridors of power, it’s worth considering whether Labour’s pro-growth messaging of “political stability” to attract private sector investment extends to the food, farming and agriculture (FFA) sectors, and if so, to what extent.

Why Labour must harvest more than just political stability

To attract private investment, ‘political stability’ alone is not sufficient – it needs to be backed up by policy substance and public investment, and with long-term strategic thinking. From aquaculture to viticulture, solar farms to biodiversity, food pricing and standards to foods high in fat, salt and sugar, there are many agendas and issues at play. These will all be playing out against a political backdrop with a renewed sense of momentum, a government with a greater willingness to intervene in the name of public health, an entire mission focused on decarbonisation, and a tight fiscal environment impacting the potential for significant public investment.

The first 100 days for the new government have proved that governing isn’t easy. Political pinch points and missteps aside, a common thread in the criticisms levelled against Labour ministers has been the absence of a defining vision for the sector to provide the framework for policy thinking and development; not least for food security which is set to become one of the defining political issues of the parliament. Without this overarching vision for the sector, the ability for businesses to plan their own investment and growth strategies becomes much more difficult and limits the ability of government to ‘crowd in’ private capital to drive growth.

The sowing of early seeds positive for UK investors

There are a few positive and recent developments of note. First, the Farming Minister, Daniel Zeichner, has confirmed the government’s intention to introduce secondary legislation which will bring to reality the regulatory regime of the Genetic Technology (Precision Breeding) Act 2023.[1] This will help to simplify the authorisation process for bringing new products to market from 1o years to an estimated 12 months.[2] Investors should note the government’s familiar caveat of “as soon as parliamentary time allows” which means the introduction of secondary legislation is unlikely to be imminent and will compete with an already packed legislative calendar. Speeding up routes to market will be welcomed by investors backing early-stage or growth-stage companies involved in gene editing, crop efficiency technologies, or those innovating in climate-resistant crop varieties. The streamlined regulatory environment lowers barriers, creating the potential for significant returns more quickly. Zeichner has also confirmed 43,000 Seasonal Worker visas for the horticulture sector and 2,000 for the poultry sector for 2025. Accompanied by a few additional measures to simplify free-range labelling requirements, this signals that the Defra ministerial team is actively listening to the sector and willing to flex policy to meet operational challenges and remove barriers to growth.[3]

Secondly, the government has secured access to the US market for British beetroot farmers, boosting export opportunities and attributed to the efforts of DEFRA’s agri-food attaché in the US.[4] This establishes an interesting precedent for securing market access outside of more formal and comprehensive free trade agreements, and creates attractive investment opportunities in companies that produce export-ready, high-quality British agricultural goods. Crucially, produce by produce access deals averts the political tightrope of negotiating comprehensive trade deals, not least one with the US which has long been the envy of previous Conservative Prime Ministers. For investors and argi-businesses on the lookout for export opportunities, engaging with DEFRA’s eleven attaches located in British embassies and consulates in Canada, Mexico, Brazil, Kenya, The Gulf, India, Japan, China, Thailand and Vietnam will be important to replicate this success.

Thirdly, there is recognition in government of the long and fraught dissatisfaction among farmers concerning the future viability of the agricultural sector.[5] The Labour ministerial team perceives a lack of confidence among farmers as the rationale for needing to optimise Environmental Land Management schemes as part of a wider new deal for farmers. The precise details of this new deal have yet to be clarified but the government has signalled a focus on:

Trade deals undercutting low welfare and low standards
Maximising public sector purchasing power to back British produce
A land-use framework to balance nature recovery and long-term food security

A latter focus on food security will be important for investors seeking opportunities which align with Labour’s aim to make the UK more self-reliant in the food and energy sectors, but especially where technological innovation contributes to more efficient and resilient farming processes and produce. Defending their record in government and playing in safe political territory, this was a focus of a recent opposition day debate in Parliament where several Conservative MPs made the case for greater public investment in new farming technologies to safeguard the nation’s food supply.[6] However, as noted by DEFRA Secretary, Steve Reed, the government’s ability to do so is up for consideration in the upcoming Budget and next year’s Spending Review and therefore competes with other public spending priorities.

A wet start for the farming sector

This year’s harvest of the five key crops – wheat, winter and spring barley, oats and oilseed rape – saw a decrease of 15% compared to the 2023 harvest with an estimated loss of £600m in revenue for English farmers due to considerable wet weather.[7] The impact has extended beyond these core crops with a south Devonshire winemaker reporting a 70% decrease in expected volumes compared to 2023 and another winemaker noting heightened disease pressures due to constant rain. For the British viticulture industry, the wet weather year of 2024 follows a boom in capital investment and overseas wine producers buying into the UK as a hedge against climate change. Rural and farming communities might not be this government’s traditional supporter base but neglecting the sector – with its sub-sector growth gems like viticulture – risks undermining long-term food security and economic growth not just farmers but the broader economy and consumers alike.

[1] DEFRA, New legislation to support precision breeding and boost Britain’s food security (Sept-23 link)

[2] DEFRA, Impact Assessment – Impact Assessment – Genetic Technology (Precision Breeding) Bill (Mar-22 link)

[3] DEFRA, Government provides certainty to horticulture and poultry businesses (Oct-24 link)

[4] DEFRA, British beetroot growers to put down roots in US market (Sept-24 link)

[5] DEFRA, Government to restore stability for farmers as confidence amongst sector low (Aug-24 link)

[6] House of Commons, Opposition day debate on farming and food security (Oct-24 link)

[7] Energy & Climate Intelligence Unit, England has second worst harvest on record with fears mounting for 2025 (Oct-24 link)

Roundtable discussion: Local authority funding and its impact on the future of social care

Images: Seb Wright Media

For a roundtable event held in July 2024, hosts Hannah Haines (Head of Healthcare Consultancy, Christie & Co), Michâela Deasy (Head of PR & Comms, Compass Carter Osborne) and Lizzie Wills (Senior Partner & Head of Private Equity, GK Strategy) were joined by some of the biggest female names in the UK social care sector.

The roundtable brought together operators, lawyers, investors and sector experts, all of whom share a passion for quality healthcare and for driving an increased awareness of the challenges faced by operators as a result of funding challenges across the country.

Below are some of the key highlights from what was discussed around local authority funding and its impact on the future of social care.

According to the Local Government Information Unit, 50% of local authorities (LAs) have reported that they are likely to be bankrupt in the next five years, with 9% predicting they would be bankrupt in the next 12 months. This is already the case for a number of LAs, including Birmingham. These struggles are not going to be resolved without fundamental reform – of how services are delivered at a local level, or how they are funded.

To address the funding challenges they are facing, most LAs have identified areas to make direct cost savings. For example, many have confirmed that they will make budget cuts relating to parks and recreational spaces. Although this may not directly impact the social care sector, it could end up affecting the mental health of the communities that rely on these facilities. Meanwhile, 16% of LAs said they are looking to reduce spending in adult social care, 12% in children’s care services, and 10% in SEND, though statutory services will be better protected from funding cuts.

… For the full article on the Christie & Co website, click here.

To find out more about the team’s next roundtable event, contact Michâela Deasy: michaela@compasscarterosborne.com

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.