Category Archives: Government

Wales says BOGOF to unhealthy food & drink

GK Associate Director Thea Southwell Reeves analyses the Welsh government’s progress on regulating unhealthy food. 

This week, the Welsh government took an important step towards tightening the regulatory environment around high fat, sugar and salt (HFSS) food. The measures include prohibiting retailers from offering promotions such as buy-one-get-one-free and three-for-two offers on unhealthy foods; a ban on free drink refills in restaurants; and preventing retailers from placing HFSS food in certain locations in stores. Worth noting, these regulations are also set to apply online so website entry pages, shopping basket and payment pages will all need to comply.   

The consultation is open until midnight on 23 September and is seeking views from industry on the draft regulations and their proposed enforcement approach. If the proposals are approved by the Senedd, the legislation is likely to come into force in 2025.  

These proposed changes form part of a broad range of approaches, both voluntary and regulatory, that the Welsh government is said to be considering to encourage the food and retail sector to produce, promote, and ultimately sell, healthier food and drink.   

The increased regulation of HFSS foods has been on the table for years and is also being explored by Holyrood and Westminster. A consultation on Scotland’s ambitious HFSS regulations closed in May and the King’s Speech included measures to restrict the advertising of junk food to children, along with the sale of high-caffeine energy drinks to children. The cost-of-living crisis has derailed anything more ambitious in Westminster… for now.   

Industry has, for the most part, been critical of moves to tighten legislation, arguing that they disproportionately impact the small food and drink producers and make selling food complex and costly. However, for businesses that are nimble, the rules represent an opportunity to gain advantage over non-compliant brands or big brands that are slow to adapt. In a similar vein, producers who can emphasise a healthier product range in marketing and brand positioning are set to attract consumers who are looking to reduce their HFSS intake.  

GK Strategy is a political advisory firm. We help investors, business leaders and organisations to engage with policymakers and advise on the political, policy and regulatory aspects of M&A processes.  

To discuss what the Welsh government’s consultation may mean for you and how you can engage with policy debates in the year ahead, please reach out to Thea@gkstrategy.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.

GK Strategy – General Election Update

General Election Results Briefing

The GK team reacts to the 2024 General Election results, with GK’s Strategic Advisers sharing their insights on Labour’s historic victory, and the implications for Sir Keir Starmer’s new government.

To read our briefing please click here.

UK General Election

General Election Update

5th July 2024

Election Result

As widely anticipated by all major polling conducted during the election campaign, the Labour Party secured its second-best electoral performance after Tony Blair in 1997 with a projected majority of 170 seats. The Labour Party leader, Sir Keir Starmer, will be appointed as Prime Minister in an audience with the King this afternoon. Achieved on a share of almost 35% of the vote – a tally lower than that achieved by Jeremy Corbyn in 2017 – Labour has benefitted significantly from the increase in the Reform UK vote, which has had the effect of splitting the right-wing vote in many key constituencies.

The Conservative Party has seen its support collapse across many parts of the country. Its projected final tally of approximately 120 MPs is worse than when it previously lost office in 1997 – with over 200 Conservative MPs losing their seats, including many prominent Cabinet ministers, including Penny Mordaunt, Grant Shapps, Alex Chalk and Gillian Keegan. The party vote share also provides grim reading having gone from 43% of the vote share in 2019 to 23%

Reform UK has outperformed initial expectations, polling 14% nationally, with its leader and chairman, Nigel Farage and Richard Tice, both being elected to Parliament for the first time. The Liberal Democrats have significantly improved on their previous performance; returning over 70 MPs to the new House of Commons, having picked up a large number of seats off the Conservative across the south of England. Meanwhile, the Scottish National Party has collapsed across Scotland, losing its status as the third largest party in Parliament to the Liberal Democrats with a mere 9 seats.

Next Steps

It is expected that the new Prime Minister will appoint his cabinet later this afternoon, which will then meet for the first time tomorrow morning. Whilst most cabinet ministers are likely to take on the portfolios they shadowed in opposition, some changes will be necessary in order to fill gaps left by the two shadow ministers who lost their own seats – Jonathan Ashworth and Thangam Debbonaire. Junior ministerial appointments are expected to follow over the course of the weekend.

The new House of Commons will meet for the first time on Tuesday 9th July, where MPs will be sworn in and elect a Speaker. The State Opening of Parliament and King’s Speech are due to take place on 17th July, where the new Government’s legislative priorities for the coming year will be set out. The Labour Government’s first budget is not expected until at least September, with incoming Chancellor Rachel Reeves having previously stated that she would give the Office for Budget Responsibility the ten-weeks required it requires to conduct a forecast before delivering any fiscal event.

Analysis from GK Senior Advisers

David Laws, former coalition government minister

“It was expected to be brutal, and it was. On 4th July, the UK electorate handed to the Conservative Party a redundancy notice, delivering it its worst ever electoral defeat in its 200 year history. Amongst the final results to be announced was that of ex PM Liz Truss, who has been thrown out of Parliament. The constituencies of Boris Johnson, Theresa May and David Cameron are now all in Labour or Lib Dem hands”.

“Political parties that have been in power for long periods are always at risk of landslides, but this was more than a landslide – it was a political earthquake, sweeping away numerous ministers and around two thirds of Conservative MPs. The public wanted revenge for the low personal standards of Boris Johnson, the economic chaos unleashed by Truss, and a Parliament of declining living standards”.

“With a few seats left to declare, Labour looks set to end with over 400 seats, perhaps just short of Blair’s 1997 haul of 418. The Lib Dems are now expecting a massive boost to their numbers – with over 70 MPs, three times their expectation of a year ago. The Conservatives have dropped well below their previous 1906 low of 156 seats, and the SNP will lose around 80% of their seats. Reform UK currently have 4 seats – crucially including Nigel Farage”.

“Labour now has a huge majority and can get on with delivering its programme for government. The results are broadly as expected by the polls, but with a couple of important caveats. Many pollsters thought the Conservatives might do even worse – finishing with well below 100 seats. The Tories are still though (just about) in business, with over 120 seats . The Lib Dems have exceeded even their own very highest private expectations, while the SNP have suffered a much bigger blow than expected – on the scale of the Lib Dem 2015 wipeout. And while Labour will be over-joyed to be in government with a solid majority, their seat total was well below the 450-480 level that many pollsters forecast, while their vote share (around 35%) is mediocre at best given the Conservative meltdown, and well below their recent ratings of 42/43%”.

“What are the implications? Let’s start with the easy ones. The Lib Dems are back in business. The SNP is in a deep hole and an independent Scotland is a very distant prospect. Reform UK are going to remain a real influence, with Farage in Parliament. Labour interest in voting reform may wane given their predicament and that PR would largely benefit Reform UK at present”.

“The big implications? The Conservative Party is in a deep hole. In 1906, its 156 seats still resulted from a healthy 43% vote share. This time the Tories polled a miserable total of around 24%. They are now likely to split between those wanting to move back to the centre ground and others looking for a partnership with Farage to reunite the right-wing vote. There are nasty choices to be made which all have major risks”.

“Meanwhile Labour looks in a superficially very strong position, but sensible Labour MPs will realise that the party’s resilience beyond the next election is far from guaranteed. Their victory owes almost everything to Tory weakness and the impact of Reform rather than enthusiasm for Labour. Seats that come easily can go easily. Farage has already put Labour on notice that it is now aiming to suck away predominantly Labour voters and win seats in areas where Reform’s strong vote gives them a good future chance. Farage will now target Labour on issues such as immigration, net zero costs, the state of the NHS, higher living standards, and relations with the EU. If Labour doesn’t deliver rapidly in office, it could face a pincer movement in future elections from Reform to its right and Lib Dems/Greens/Nationalists to the left”.

“Starmer is right that he changed his party and helped them exploit the Conservative weakness. But the failure of most disillusioned Tories to switch to Labour, and their inclination to go instead to Reform or stay at home should worry Starmer greatly. He has done the easy bit. Governing well will be harder. The electorate has decided clearly that it wants the Conservatives gone. Whether it wants a Labour government for long is still an open question”.

—

Phil Hope, former Labour government minister

“Labour’s landslide victory carries profound political, social, and economic significance, marking a seismic shift from recent Tory dominance and a realignment of voter priorities. The nation has given Labour a mandate for progressive policies to address inequality, climate change, and improve public services. This victory symbolizes a cultural shift that rejects austerity, turmoil, and inward-looking attitudes; and endorses economic competence and stability, trust and good governance, humanity and social justice, decent public services, fairness at work and strong international relationships”.

“But the practical reality is very tough. In inheriting a grim economic situation and broken public services, Labour’s long-term mission will be to rebuild trust and prosperity over time. The focus will be on sustainable economic growth through attracting private investment, supporting public infrastructure, and more effective regulation of critical utilities and services. New approaches to green energy, technology and AI, rapid house building, economic devolution, and workforce skill upgrades will drive sustainable growth. Internationally, Labour will pursue closer economic ties with the European Union and adopt a multilateral approach to global challenges and conflicts”.

“Limited and targeted tax reforms on wealth will secure greater contributions from the affluent to address immediate challenges in public services such as the NHS, social care, and education, alongside better support for families on low-incomes. But substantial investment in public services and significant support for those in most need will only come from future economic growth”.

“The election will spark intense internal debate within the Conservative party regarding its direction, policies, and identity. The influence of Reform and its xenophobic populism will exacerbate internal divisions and trigger a bitter leadership struggle to redefine the party’s vision. The outcome could see a centrist shift to regain moderate voters or, more worryingly, a pronounced rightward shift to consolidate the base”.

“The 2024 election marks a pivotal moment for the nation and a turning of the page on the past. It will be very challenging with high expectations of change. But Labour’s huge majority enables them to confidently plan a phased decade of renewal, and to build the restoration of trust in our national and democratic institutions. It allows Labour, over time, to reshape the UK’s domestic landscape, and regain Britain’s position as a reliable partner in the global framework for sustainable growth, peace and security”.

Will Sunak’s Latest Reset Work?

GK Associate Hugo Tuckett examines the Prime Minister’s recent speech at Policy Exchange and whether he can address the Conservative Party’s declining fortunes.

Rishi Sunak turns his attention to security in bid to tackle Labour’s poll lead.

Following a dismal set of local election results and the high-profile defection of Dover MP Natalie Elphicke to Labour, Prime Minister Rishi Sunak has attempted to reset the political agenda. He used his latest relaunch at Policy Exchange, a Conservative-friendly think tank, to portray himself as the best leader to guide the country through what he described as the “dangerous and transformational” years ahead.

References were made throughout to ensuring the UK’s security in the wake of the Russian invasion of Ukraine and the ongoing conflict in the Middle East. It was also telling that Sunak made a pitch to voters on the opportunities presented by artificial intelligence – an area where he will feel comfortable promoting his tech credentials against the Labour leader Keir Starmer, who is 17 years his senior.

It is not unusual for incumbent (and unpopular) governments to paint opposition parties as inexperienced and incapable at a time of potential national peril. Former Prime Minister Gordon Brown famously argued “this is no time for a novice” in the wake of the 2008 financial crash amid David Cameron’s growing popularity. However, to go for this tactic right at the start of a general election campaign does suggest Sunak’s No.10 operation is running out of levers to pull to tackle Starmer’s seemingly unassailable lead in the polls.

Sunak’s pivot into security marks a clear distinction from his previous attempts to put the Conservatives on the path to election victory. At the 2023 Conservative Party Conference, he tried to paint himself as the change candidate and separate himself from the then 13 years of Conservative rule. Sunak was subsequently forced to adopt a continuity-focused strategy and defend the Conservatives’ record in office following David Cameron’s return as Foreign Secretary later that year.

The extent to which Sunak’s latest reset will work will depend on whether the electorate is still listening. The Conservative Party can highlight its commitment to raise defence spending to 2.5% of GDP by 2030, a pledge yet to be matched by Labour, who have adopted the looser definition of meeting the 2.5% figure “as soon as resources allow.” However, with Labour so far ahead in the polls and three changes of tack in less than a year, it does raise the prospect that the Prime Minister is trying to engage an electorate which is simply no longer interested in what the Conservatives have to offer.

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.