Category Archives: Government

View from the US: The Rise of American Progressives

Erin Caddell of GK Strategy’s American partner Anchor Advisors examines the ideological battle reshaping the Democratic Party and what it could mean for investors, corporates and the future direction of US policy

Sir Isaac Newton’s Third Law of Motion, published in 1687, states that for every action there is an equal and opposite reaction. This centuries-old theorem may go some way toward explaining the ideological split currently occurring in the U.S. Democratic party – one that could carry significant importance for the congressional midterm elections in November 2026 and for U.S. policy for many years to come.

Republican President Donald Trump faces a difficult political backdrop approaching the midterms, often thought of as a referendum on the incumbent U.S. president’s first two years in office. Trump faces sagging approval ratings in his second term, with notable weakness on his handling of the economy due to rising inflation, as well as a Middle East war with no easy way out. As this column has noted before, Republicans are already defending one of the narrowest House majorities in American history (218-212, with four vacancies and one independent).

Given these dynamics, many Democratic leaders and pundits have suggested the party employ a midterm campaign version of Napoleon’s military adage to never interrupt your enemy when he is making a mistake: focus voters’ attention on Trump policies that many voters view unfavorably rather than on promoting a robust alternative agenda. To these strategists, the poster child for the ideal Democratic candidate in 2026 is Roy Cooper, a two-time former governor of North Carolina running for U.S. Senate in that state with the simple slogan “Make Stuff Cost Less”. Cooper focuses fairly narrowly on criticizing Trump actions that he argues have resulted in “farmers… getting crushed by tariffs” and “families… seeing prices rise at grocery stores and restaurants.” In response, Cooper proposes a modest set of reforms such as tougher anti-trust enforcement and making data centers pay more for the power they draw from public utilities.

Cooper may well reach the Senate – he has run ahead of his Republican opponent in every poll published since the race began. But the middle-of-the-road approach of Cooper and other moderates is not capturing the hearts of Democratic voters writ large. The hard-edged governing style of Trump and his Republican congressional allies, in areas ranging from immigration enforcement to foreign policy to social spending, has, to use a scientific term, made Democrats mad as hell. And – returning to Newton’s Third Law – Democrats want their leaders to push back hard at Trump with policies equal and opposite to those promulgated by the GOP-led Administration and Congress.

Evidence of Democrat voters’ more confrontational impulse is ample in recent party primaries to select candidates to run in the November congressional elections. In June, two progressive U.S. House candidates running to represent district in New York City – Brad Lander and Darializa Avila Chevalier – ousted incumbents, while a third (Claire Valdez, a member of the state Assembly) defeated the Brooklyn borough president in a race for another U.S. House seat. All three candidates support increased government support for public housing, universal federal health insurance, abolishing the U.S. Immigration and Customs Enforcement (ICE) agency, cutting defense spending, shifting energy production from fossil fuels to renewables to address climate change, and reducing American military involvement abroad, among other progressive policies. All are vocal in their criticism of Trump. It is not just in deep-blue New York where the left is gaining momentum: earlier this month, Melat Kiros, a 29-year-old Democratic U.S. House candidate in Colorado, backing an agenda similar to her New York counterparts, unseated U.S. Rep. Diana DeGette, who had represented the district in D.C. for nearly 30 years. Progressive candidates have tallied recent election wins in states from Maryland to Oregon.

A number of the candidates cited above, and others squaring off against more-moderate Democrats, are members of the Democratic Socialists of America (DSA), a left-leaning political organization founded in 1982. DSA’s importance in the U.S. political ecosystem can be easily exaggerated by both critics and supporters – the organization reports about 120,000 members, compared to 45 million Democrats and 39 million Republicans. Yet the DSA has clearly touched a nerve within a Democratic party still trying to figure out how best to oppose Trump and his MAGA movement – and position itself for a post-Trump future. The party’s goal to create “a system where ordinary people have a real voice in our workplaces, neighborhoods, and society” (see below) echoes in the campaign speeches and placards of progressive candidates on the stump today. The most famous DSA member is New York City Mayor Zohran Mamdani, the 34-year-old political wunderkind who rode his own anti-Establishment, anti-incumbent wave to power in January, defeating Andrew Cuomo, former New York governor and scion of a well-known political family.

What is Democratic Socialism? “Capitalism is a system designed by the owning class to exploit the rest of us for their own profit. We must replace it with democratic socialism, a system where ordinary people have a real voice in our workplaces, neighborhoods, and society… We want a democracy that creates space for us all to flourish not just survive and answers the fundamental questions of our lives with the input of all. We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation. We want the multiracial working class united in solidarity instead of divided by fear. We want to win “radical” reforms like single-payer Medicare for All, defunding the police/refunding communities, the Green New Deal, and more as a transition to a freer, more just life.” (Source: Democratic Socialist of America)

The recent success of DSA members and similarly inclined progressives has led to an equal and opposite (Newton again!) reaction from moderates who argue that moving too far to the left will cost Democrats in the midterm elections in November as well as the presidential election in 2028. In a July 20th note, Third Way, a center-left think tank, warned: “If [Democrats] follow the siren song of the left, they will steer their ships into the rocks. If they remain in the mainstream, they will have a fighting chance of winning not only the primary, but also most crucially, the general election.” Third Way and other naysayers of the progressive wave cite the example of Kamala Harris, who ran on a progressive agenda as the Democratic party’s presidential nominee in 2024 after then-President Joe Biden opted not to run for re-election. In the 2024 campaign, Harris proposed ambitious spending to combat climate change, an increase in the corporate tax rate and anti-price gouging laws for groceries, among other policies popular with many progressives. Trump, of course, comfortably defeated Harris in the presidential election (though the hurried mid-campaign handoff from Biden to Harris certainly didn’t help).

What does this mean for US-focused investors and corporates?

The moderate, middle-of-the-road approach of some Democratic candidates doesn’t seem to meet the political moment. Thus, we do think the progressive movement will move the Democratic Party to the ideological left in the years to come, even if “socialist” candidates remain a small portion of the electorate and the Congress. This could benefit sectors that have been out of favor thus far in Trump’s second term. For instance, health insurance companies that provide insurance under Medicaid and other healthcare programs for disadvantaged Americans could benefit from reversal of recent cuts to such programs under a Democrat-controlled Congress and/or White House. Similarly, apartment-focused real estate investment trusts (REITs) would benefit from expanded public spending on housing in a more progressive political climate. Child-care providers could see the same from federal programs to provide more support for working families. In sum, Democrats’ intense anger at Trump’s policies and persona are likely to be quelled only by a similarly forceful agenda on the other side of the spectrum – the equal and opposite reaction crystallized by Newton so long ago.

 

 

What does Andy Burnham’s social care announcement mean for providers?

On Tuesday 29 July, Prime Minister Andy Burnham, Louise Casey and Health Secretary Yvette Cooper outlined the government’s approach to adult social care reform. Burnham said it was ‘shameful’ that decades of political point-scoring had come at the expense of meaningful reform and argued that he is prepared to spend political capital to deliver lasting change. The prime minister used the speech to make three key announcements.

First, Burnham confirmed that Louise Casey’s independent review of adult social care will be accelerated by a year, with final recommendations now expected by summer 2027. He said Casey had been asked to consider how the government could deliver a National Care Service, arguing that social care should become more preventative, person-centred and better integrated with the NHS.

Second, Burnham announced a renewed focus on the social care workforce. Building on the government’s plans to introduce a Fair Pay Agreement for care workers from 2028/29, he said ministers would explore wider reforms to improve pay, training and career progression. He also proposed creating clearer pathways between social care and NHS roles to help professionalise the workforce and improve recruitment and retention.

Third, Burnham announced the launch of cross-party talks on social care reform involving the Conservatives and Liberal Democrats. He argued that lasting reform would require political consensus and described the discussions as the first test of his commitment to a less adversarial style of politics. Burnham said common ground must be found if policymakers are to address challenges that have remained unresolved for decades.

Both Andy Burnham and Louise Casey signalled that future reform would involve greater scrutiny of private providers. Casey argued that there remains an important role for a mixed market in adult social care, but criticised providers perceived to be “profiteering” from care services. Burnham echoed these concerns, arguing that some parts of the sector have prioritised profit and cost-cutting over the quality of care and outcomes for vulnerable people. However, Burnham has historically adopted a pragmatic rather than an ideological approach to public service reform. As health secretary in the Brown-led government, he recognised the role that independent providers could play in increasing NHS capacity and reducing waiting times where they delivered value for patients and taxpayers.

As a result, he is unlikely to pursue reforms that materially reduce the private sector’s role in adult social care. Given the significant share of care capacity and expertise provided by independent providers, the prime minister is likely to be mindful of avoiding reforms that could destabilise the market by causing market exits and place further pressure on already stretched services. Instead, providers should expect a greater focus on accountability and transparency, clearer standards to improve the quality and consistency of care, and enhanced scrutiny of how public funding and provider profits are used. The NHS Modernisation Bill currently going through the Commons is one key place to watch if any substantive change is to come forward.

On funding, Burnham argued that significant improvements could be achieved through more effective use of existing resources before tax rises are considered. He highlighted the costs associated with avoidable hospital admissions and delayed discharges caused by inadequate social care provision, suggesting that greater investment in prevention could deliver substantial savings across the wider health system. However, significant questions remain about the long-term funding model for a National Care Service. Reports suggest officials are exploring options ranging from social insurance-style contributions to inheritance-based levies, although ministers have stressed that no decisions will be taken until Casey’s review is complete and the new prime minister remains constrained to some extent by Labour’s 2024 manifesto commitments on tax.

Phil Hope, GK’s Strategic Adviser and former care services minister under Andy Burnham at the Department for Health, who was directly referenced in the prime minister’s speech said: ‘The prime minister was clear that he wants to build a broad consensus around social care reform and move the debate beyond the political point-scoring that has hindered progress in the past. Bringing forward the Louise Casey review to 2027 creates an opportunity for that conversation to take place away from the pressures of a forthcoming general election. While concerns about profiteering were raised, there was little detail on the scale of the issue or how ministers might address it, making this an area the Casey review is likely to explore further.’

Steve Brine, GK’s Strategic Advisor and former health minister as well as chair of the cross-party Health and Social Care Select Committee said: ‘It was a hugely impressive performance from Andy Burnham with what was more a political than a policy announcement but his authenticity on the subject is welcome and important. It was really about creating the political conditions for reform rather than announcing the detail, but that day will come – along with who pays – and that is the next big moment. Casey’s challenge is to define what ministers actually mean by ‘National Care Service’ – is it about standards, funding, eligibility – and for the PM it’s how will someone’s experience be different in two, three or five years’ time? That’s ultimately how people will judge success.’

What could skills policy look like under a Burnham-led government?

The prospect of Andy Burnham succeeding Keir Starmer as Prime Minister is significant for the skills sector. Burnham is a strong advocate for technical education and has criticised previous governments for their ‘obsession’ with higher education, including former Labour Prime Minister Tony Blair’s target of having more than 50% of young people go to university.

In his first major speech since launching his bid to replace Starmer on Monday 29 June, Burnham acknowledged that while university is ‘great for those who want it’, there also needs to be a focus on the life chances of those who don’t wish to opt for the higher education route. Given he has long called for ‘true parity’ between academic and technical education, as highlighted in his manifesto for his 2015 Labour leadership bid, Burnham is likely to place much greater emphasis on study programmes linked to in-demand technical and vocational occupations as part of a broader effort to create clearer pathways into employment for young people.

Burham’s Manchester Baccalaureate (MBacc), which provides a pathway into the region’s high growth sectors through technical and vocational qualifications, is a clear example of what this shift could look like on a national scale. Launched by the Greater Manchester Combined Authority (GMCA) in September 2024, the MBacc guarantees every young person in the region a clear pathway to employment opportunities through a combination of careers advice services, work experience placements and technical qualifications, including by expanding access to T Levels and apprenticeships.

Since its launch in 2024-25, the MBacc has benefitted from growing support amongst local employers. In January 2026, GMCA confirmed that several leading employers, including Autotrader, IBM and the NHS, had pledged over 1,000 additional work placements to T Level students. This demonstrates how engaged and invested businesses can be in skills and the future workforce, provided the right policy framework is in place. The MBacc not only provides technical education routes into growing regional industries, but it also encourages young people to make subject choices at the ages of 14, 16 and 18 that support progression into these pathways.

Another aspect of Burnham’s approach is the emphasis he places on greater collaboration between skills, health and employment, specifically the need to adopt a place-based model while pivoting away from a nationally directed skills system. One of the advantages of a place-based model is the recognition of significant regional differences in the causes of unemployment and the nature of local labour markets. This includes inconsistent access to training provision and the variety of opportunities for growth across the country. A Burnham-led government is likely therefore to see more devolution by default, whereby employment support is further integrated with local health, skills and community services. This would mean that providers in the FE and HE sectors play a much larger role in supporting people into work.

A Burnham premiership is likely to see a more devolved and technically-focused skills and training system. On a practical level, this is likely to involve granting established combined mayoral authorities (like London, Greater Manchester and the West Midlands) greater autonomy in shaping skills provision around local labour market demands. For employers and training providers, this direction of travel will place greater emphasis on more joined-up local working and support across education, health and employment services. While this has the potential to significantly transform the skills sector, the test for Burnham is whether he can demonstrate that a localised, devolved approach will deliver economic growth, boost living standards, and give every young person growing up a ‘clear path into a re-industrialised Britain’.

If you would like to talk more the potential of a Burnham-led government and what this could mean for the skills sector, please email Noureen@gkstrategy.com.

EU Youth Mobility Scheme: Brexit divisions and the Burnham factor

GK’s Brett Morton examines the ongoing negotiations with the EU on a youth mobility scheme and what it means for the future of the UK-EU relationship

A youth mobility agreement has become a central component of the Labour government’s drive to improve UK-EU relations. Although both sides broadly support the principle of making it easier for young people to live, work and study across borders, the parties remain divided over the terms. Points of contention over immigration caps and tuition fees risk preventing a wider package of UK-EU cooperation measures. Both sides had been keen to secure these at a second bilateral summit scheduled for 22 July in Brussels. The summit has now been delayed following the Prime Minister’s resignation.

The scheme under discussion would allow 18-30-year-olds from the UK and EU to spend a limited period living, studying and working in each other’s countries. In broad terms, it would resemble the agreement the UK already has with countries such as Australia and Canada. Under those arrangements, young people can come to Britain for up to three years, subject to visa rules and annual caps, and work, travel or study without employer sponsorship. The UK would like any deal with the EU to follow the same basic model: temporary, managed and clearly distinct from free movement.

That distinction matters because immigration remains one of the most politically charged legacies of Brexit. Opponents of the proposal, including Nigel Farage, argue that such a scheme would amount to freedom of movement under a different name. Ministers have been keen to stress that any agreement with the EU would be time-limited and capped. Reports suggest the Starmer government favoured a ceiling of 50,000 participants a year. The EU, by contrast, is believed to prefer a more flexible arrangement, with no fixed cap but a break mechanism that would allow either side to intervene if numbers became excessive. For the next Prime Minister, accepting a scheme without a visible numerical limit would be politically difficult, particularly given the public’s appetite to reduce net migration.

Since Brexit, labour shortages have become a persistent problem in sectors such as hospitality, agriculture and construction. At present, a young EU citizen who wants to work in the UK for a limited period usually needs sponsorship from a British employer. In practice, that system is often costly, bureaucratic and tied to salary thresholds that many small businesses cannot meet. In many cases, sponsorship requires employers to offer a salary of at least £41,700 a year, or the going rate for the role, which places it out of reach for much seasonal, temporary and lower-paid work. Supporters of a youth mobility scheme argue that without the need for sponsorship or salary thresholds, it could widen the pool of labour and make it easier to fill temporary or seasonal vacancies. Even so, its impact would be limited, as it may ease pressure in high-turnover sectors but would do far less to address longer-term shortages in fields that depend on permanent skilled workers, such as healthcare or technology.

A major obstacle to a youth mobility agreement is tuition fees. The EU wants students to study in the UK and EU countries on the same basis as domestic students, meaning EU students at UK universities would pay home fees rather than higher international rates. With 24 institutions reportedly at risk of insolvency within the next year, according to the Education Select Committee, international student fees have become a vital source of income. The Russel Group, an association of 24 prestigious universities in the UK, has warned that granting EU students home fee status could cost the sector around £580 million, reducing universities’ ability to invest in programmes such as Erasmus+ and Horizon Europe.

The youth mobility debate must also be understood in its wider political context. Starmer had originally hoped that a UK-EU reset would help revive his premiership by showing that closer cooperation with Europe could deliver practical benefits, from smoother trade to lower costs for consumers. With his resignation, that personal political purpose has fallen away. Future negotiations are no longer about rescuing his administration, but about shaping the direction of the next Prime Minister’s agenda.

With an Andy Burnham coronation now increasingly likely ahead of 22 July, the EU has postponed the summit. A youth mobility scheme could offer Burnham an opportunity to pursue economic and social reforms in response to what he has described as the ‘damage’ caused by Brexit. However, Burnham is also likely to be cautious about making significant concessions to Brussels, particularly on a cap, as he seeks to appeal to Reform UK voters and avoid reopening divisions from the Brexit referendum ahead of a potential 2029 general election. The future of any youth mobility scheme with the EU will therefore depend on Burnham’s political calculus.

Community pharmacy settlement brings stability, but long-term challenges remain

As a former Pharmacy Minister, I watch the annual community pharmacy contract negotiations with interest because I know how important they are. This year’s settlement is notable for one reason above many in that it was agreed! That may sound like a low bar, but in today’s NHS it is anything but.

At a time when ministers find themselves in dispute with almost every part of the health workforce, the fact that Government and Community Pharmacy England have reached an agreement matters.

Negotiation remains preferable to imposition. It provides stability, certainty and, perhaps most importantly, a platform for future reform. The settlement itself is better than many in the sector (including me) were expecting. Indeed, compared with the rest of primary care, community pharmacy has secured one of the stronger funding settlements available anywhere in the NHS.

Minister Stephen Kinnock deserve praise for recognising that pharmacies cannot carry on indefinitely with rising costs. The increase in funding, the uplift in retained medicines margin and the write-off of historic over-delivery all sit on the positive side of the ledger.

But we should be honest about what this settlement is – and what it is not.

It is not a recovery plan. The uncomfortable truth is that a decade long funding gap – which I absolutely take my share of responsibility for – has not been closed. The additional investment announced for 2026/27 is largely consumed by increased activity levels and of course inflation. This matters because while the settlement should help stabilise the sector, I suspect it will not halt pharmacy closures.

There is another challenge too. I have great respect for Community Pharmacy England but there will come a point where it must decide whether it believes a deal is acceptable or not.

Last year, and now this, we hear of an agreement reached quickly followed by explanations setting out why the agreement is not good enough. I understand why this occurs, but it is not a position that can be sustained indefinitely and many in the sector will feel that. Ministers won’t much care so long as it’s done and they will come to rely on that.

At some point, the sector, government and negotiators alike need true alignment on what success actually looks like. The government’s clear priority in this settlement is independent prescribing. As a manifesto commitment and a central part of the neighbourhood health agenda, it is easy to see why ministers are keen to deliver here.

The principle is absolutely right. For years I have argued that community pharmacy is one of the NHS’ most underused assets. Everyone should want pharmacists diagnosing, prescribing and managing more patients – ‘hospital to community’ as they say.

My concern is whether the funding stamped on this settlement will be enough to deliver independent prescribing at a meaningful scale. Training people is vital. Creating the capacity, infrastructure and incentives to make independent prescribing a systemic part of community pharmacy practice is another challenge.

My verdict? This is a better deal than many anticipated and best in class in primary care. It provides some level of stability and demonstrates that constructive negotiation is still possible with this government.

But stability is not transformation.

The question facing us all is whether the settlement represents the first step towards a realised clinical future for community pharmacy – or merely another year spent managing decline, albeit a little more slowly.

This article from Steve Brine also appears at the Chemist + Druggist online magazine.