Category Archives: Investment

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.

View from the US: Wealth taxes and universal income

Erin Caddell of GK Strategy’s American partner Anchor Advisors unpacks the prospect of wealth taxes on ultra-high net worth individuals and universal basic income to address heightened scrutiny of wealth inequality in the US

Stunning rise in tech wealth reignites policy debate about U.S. income inequality

The dramatic increase in market capitalization among US-based AI and other tech-related companies in recent years, encapsulated by last week’s whopper IPO for SpaceX, is reinvigorating a long-running debate about income inequality in America. Proposals for redistributive policies, such as wealth taxes and universal basic income (UBI), are gaining a new currency in US state capitals and in Washington DC.

The wealth creation of the AI boom is staggering. The SpaceX IPO made founder Elon Musk the world’s first trillionaire. Following Musk, the next nine richest Americans have a collective net worth of $1.7 trillion according to Forbes. All but one of whom (Warren Buffett) is a tech co-founder. Americans for Tax Fairness, a tax advocacy group, estimated that the net worth of America’s roughly 1,000 billionaires has increased by $1.5 trillion in 2025 to $8.2 trillion. Much of the rise is being driven by AI’s boost to tech content and infrastructure providers (as well as the tax cuts approved by President Trump and the GOP-controlled Congress last year).

The achievements of the ultra-rich in harnessing the promise of the latest technology revolution have drawn the ire of everyday Americans grappling with high inflation, increased healthcare costs and the threat of jobs being displaced by AI. This shift in public sentiment is turning on its head an old adage that Americans do not support higher taxes on the wealthy because many believe they, too, will become rich one day in the land of opportunity. A YouGov poll released in January found that 59% of Americans surveyed agreed that the government should pursue policies that narrow the gap between the rich and poor, with a majority of those Republicans surveyed agreeing that the wealth gap is a big problem. Compare this to 1939, when a Fortune magazine poll found only 35% of Americans surveyed felt wealth should be redistributed through higher taxes on the rich.

Policymakers looking for support to address income inequality can point to evidence that the gap between rich and poor is even wider now than in the Gilded Age of the late 19th century when the technologies of the Industrial Revolution created the first cohort of the ultra-wealthy in America; and ultimately a backlash that led to the antitrust actions around the turn of the century, and later to establishment of the federal income tax in 1916.

Gabriel Zucman, a leading international scholar of wealth inequality, published a book in May with the wonderfully direct title ‘We Need to Tax Billionaires’. It found that the wealth of the top 0.0001% of the world’s richest families represented more than 16% of world GDP in 2025, up from 4% in 1910, and 3% in the mid-1980s.

The early skirmishes on the income-inequality debate are playing out in the American states, where public sentiment can be codified into policy more quickly than at the federal level. Earlier this year, the legislation in Washington state (home of Microsoft and Amazon) was passed and its governor signed a new 9.9% state tax on annual incomes above US$1 million. Massachusetts has levied a 4% surcharge on $1 million-plus earners since 2022. Colorado, Connecticut, Hawaii, Michigan, New York and Rhode Island are considering similar measures.

California, the epicenter of both the AI revolution and worries about thousands of jobs being made obsolete by it, recently submitted enough signatures to place a ‘billionaires’ tax’ on the November 2026 ballot. The measure would impose a one-time 5% tax on California residents with net worth of greater than $1bn, a move projected to raise US$100 billion to fund healthcare, education and food assistance. The initiative has already roiled the state and potentially national politics. California Governor, and likely 2028 Democratic presidential candidate Gavin Newsom, has opposed the measure, arguing it would hurt the state’s tech industry. Labor unions that initiated the proposal are considering a compromise to lower the proposed tax to 2%.

Universal basic income (UBI) is the flip side of the wealth tax. Dating back centuries, UBI intends to provide a modest but unconditional income to all citizens of a society to recognize the dignity and value of each person and to share the benefits of a nation’s bounty. The idea has gained new currency amidst renewed concern in recent years about displacement of workers by technology. Twitter founder Jack Dorsey gave $15 million to a group called the Mayors for a Guaranteed Income to divide into a series of UBI pilot programs. UBI pilots have been launched in recent years in cities including Stockton, California; Durham, North Carolina; and Baltimore, Maryland.

With Trump and the GOP focused on lowering taxes rather than raising them, wealth levies and UBI programs are non-starters at the federal level now. This could change. Democrats are making income inequality a key plank in their campaign for the November midterm elections. Should Democrats win back the White House and gain control of both houses of Congress in 2028 (as Biden and his party did in 2020), they would likely consider wealth-tax proposals already circulating among party leaders. The ‘Billionaires’ Income Tax’ bill proposed in September 2025, for instance, would subject individual taxpayers with assets of greater than US$1 billion or annual income of more than $100 million a year for three consecutive years to an annual tax based on the net gain of their assets (or to deduct the losses). The bill was proposed in the Senate by Finance Committee Ranking Member Ron Wyden (D-OR), a leading voice in Democratic tax policy, and co-sponsored by 20 Democratic Senators.

While UBI has less support at the federal level than wealth taxes, UBI could also gain favor in a Democrat-controlled White House, Senate and House. In October 2025, a dozen Democratic House members led by Rep. Bonnie Watson Coleman (D-NJ) introduced the Guaranteed Income Pilot Program Act, which would provide income equivalent to rent for a two-bedroom apartment for an initial test group of 20,000 Americans. Even Musk himself has become a proponent of UBI, posting on X in April that ‘Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI’.

Individual federal income-tax rates have declined in the US from 91% in 1955 (a vestige of increases to help pay for World War II) to 37% in 2025, while capital-gains taxes have held around 25% over the past decade, according to the Peterson Foundation (see below). Not coincidentally, the entrepreneur has risen in the eyes of the American public during this period, as the ’Organization Man’ archetype of the loyal cog in the paternalistic corporation gave way to the us-against-the-world mindset of the U.S. tech industry, best symbolized by the foundings of Apple and Microsoft in the mid-1970s.

Through the commercialization of the internet in the mid-1990s, to the rise of social media 20 years later, to the acceleration of generative AI with the launch of ChatGPT in 2022, technology has become ever-more central to the U.S. economy and society. Yet the widening gap between the few at the top and the rest below seems to have driven a policy tipping point. With the federal deficit at 6% of GDP, the highest in U.S. history outside of war and the covid-19 pandemic, and individual tax receipts the largest source of federal revenue at 50%, it seems a question of when, not if U.S. policymakers will have to consider raising taxes. The ultra-wealthy are an easy target as part of such an effort. At the same time, pressure to distribute more of the benefits of the tech boom to the rank-and-file who bear its brunt also seems poised to continue to rise through increased support for UBI, as well as for higher standard deductions for federal income taxes, as multiple progressive policymakers have proposed recently.

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

We do not profess to be able to predict when or by how much tax rates on wealthy Americans will rise. But we do see several downstream effects impacting US-centric companies and their owners from the increased focus on income inequality.

First, a redistributive shift in the tax system would be positive for firms that help individuals and small businesses prepare their income taxes (yes, including those who assist wealthy people in looking for ways to pay less in tax), as well as the many companies that provide services to the tax-preparation industry itself.

Second, companies and investors should be more prepared to view their actions in the U.S. through a more populist lens and to delineate the benefits of their products and services beyond the limited traditional corporate stakeholders of shareholders, customers and employees. Take data centers. In recent years, the tech firms developing the data centers powering the AI boom, led by the multi-billionaires highlighted above, believed the substantial tax revenue they planned to bring to mostly rural or suburban communities where data centers are located would be enough to win support from local citizens. With many local governments across the political spectrum working to halt data-center construction due to concerns about resource utilization and quality of life, developers must take a more holistic approach, thinking through ways to offset the centers’ electricity and water usage; expanding efforts to reduce noise and other potential environmental impacts; and partnering with impacted communities to share in the benefits of the center’s economic activity beyond just paying a tax bill.

Third, should UBI proposals gain further support at the state or federal level, it would help providers of affordable housing, an industry already under the spotlight at the federal and state level as many regions of the U.S. deal with housing affordability issues and shortages.

Whatever the outcome of these and similar debates, income inequality and policies to address it are sure to occupy a larger place in the U.S. policy landscape in years to come.

 

NHS Recovery and Productivity: Diagnostics are the place to start

Drawing on his experience as a Health Minister and Chair of the Health and Social Care Select Committee, GK’s strategic advisor Steve Brine argues that diagnostics are the critical but often overlooked foundation of NHS recovery, productivity and prevention.

Diagnostics rarely grab headlines in the way that waiting lists do. Yet during my time as a Health Minister, and later as Chair of the Health and Social Care Select Committee, I came to a simple conclusion – if you want to improve outcomes, reduce elective waits and modernise the NHS, they are the place to start.

The reality is that no patient can begin the right treatment until the clinicians know what is wrong. Whether it is cancer, heart disease or a musculoskeletal problem, diagnosis is the gateway through which every effective pathway runs.

Too often, however, diagnostics are viewed as a ‘supporting service’ rather than the critical infrastructure on which the entire system rests.

That is why I have been encouraged by the development of Community Diagnostic Centres (CDC’s) under the last government and continued under this administration.

The concept is straightforward but powerful; bring scans, tests and investigations closer to where people live, rather than requiring patients to navigate busy acute hospitals. It is one of the clearest examples of the much-discussed shift from hospital to community becoming more than words on a page and something that patients can see.

When I was a Minister, we spoke frequently about prevention and early intervention. Now it’s the talk of the town.

For my money, diagnostics sit at the heart of both. A CT scan, MRI scan or PET scan (Positron Emission Tomography, which is particularly important in cancer diagnosis and treatment planning) is not simply a test. It is an opportunity to identify disease earlier, provide reassurance quicker, and avoid patients deteriorating while waiting for answers.

As Select Committee Chair, I often heard evidence about the pressures facing the NHS workforce and the challenge of delivering constitutional standards. The current debate about the 18-week elective target is important, but it is worth remembering that elective recovery ultimately depends on diagnostic recovery. You cannot clear waiting lists if patients are waiting months for scans, endoscopy or reporting.

That is why diagnostics should be seen as a productivity issue as much as a clinical one. Faster access to tests means quicker clinical decisions, more efficient use of outpatient appointments and better use of operating theatres. Every delayed diagnosis creates friction elsewhere in the system and, most important of all, spikes anxiety in patients. The dreaded diagnosis ‘odyssey’.

The challenge now is ensuring that CDC’s become a permanent part of NHS infrastructure rather than simply a waiting-list initiative. That means investing not only in buildings and scanners, but also in the workforce; radiographers, radiologists etc.

If ministers are serious about restoring performance (which as we will explore further in this series of blogs I am writing for GK Strategy is only part of the story), improving cancer outcomes and delivering care closer to home, it’s hard to look past diagnostics as the place where the next chapter of NHS reform must begin.

Will the Chancellor’s ‘securonomics’ strategy drive growth in a new age of instability?

Throughout her time as Chancellor, Rachel Reeves has insisted that the government’s main objective is to facilitate economic growth. During her Mais Lecture on 17 March 2026, Reeves set out a vision for long-term economic growth, using the speech as an opportunity to highlight the ways in which the government will overcome challenges such as fiscal constraints, low productivity, and global instability.

Reeves reaffirmed her belief in ‘securonomics’, an economic strategy where the government helps individuals and businesses gain economic security by investing strategically in sectors like technology, financial services, science and infrastructure. Reeves emphasised that the government needed to play a more active role in guiding investment given the impact of the middle east conflict on the global economy. She stated that market disruptions caused by the COVID-19 pandemic, the Ukraine-Russia war, and the US-Israel war with Iran meant that ‘globalisation, as we once knew it, is dead’. As a result, the government would need to find balance between building resilient public services and facilitating private sector growth, as well as a balance between importing goods and products from other countries and bolstering domestic supply chains.

A central theme of the lecture was the ‘big choices’ the government is making to shape the UK economy over the next decade. The Chancellor placed significant emphasis on securing closer ties with the EU, arguing that it was essential for future growth. She stated that a closer alignment could reduce trade barriers. Reeves acknowledged that Brexit has had a negative impact on the UK economy, a shift from previous years where she had shied away from being overtly critical of Brexit. Reeves stopped short of expressing support for rejoining the EU, instead stating that the UK could find greater alignment with Brussels on policy, while still operating outside the EU’s formal structures. If the government is successful in forming a closer relationship with the EU, she remarked, it could ease the administrative and customs costs for businesses importing from and exporting to the European Union.

While business owners will be pleased to see the Chancellor discussing reducing trade barriers with the EU, Reeves’ attempt to set out a vision for regulatory alignment with the EU may be more concerning for businesses. Reeves said that the government would be prepared to align with EU regulation where it is in the ‘national interest’ to do so, and would maintain regulatory autonomy in sectors with strategic importance for the UK. However, this ignores the post-Brexit reality – the UK and the EU are growing apart on their regulatory goals.

Recent UK governments have increasingly highlighted their ability to implement more flexible approaches to regulation than the EU as a selling point to attract global business. Reeves herself wrote to 17 regulatory bodies in January 2025 urging them to ‘tear down regulatory barriers’ and focus on opportunities to facilitate economic growth. For example, Reeves has implored the Financial Conduct Authority to reduce ‘anti-risk’ regulations and improve competitiveness in financial services sub-sectors, including consumer finance. This is a significant contrast from the EU’s approach, which is more precautionary and is unlikely to result in the reduction of detailed consumer protection rules. If the government does pursue regulatory alignment with the EU in financial services, it would need to consider the impact on regulations, such as affordability assessments and disclosure requirements. Altering these regulations could increase compliance costs for businesses and would likely upset management teams that have spent the last five years adapting to the UK’s Consumer Duty.

The Chancellor also argued that technological advancement is critical to boosting productivity, creating jobs, and positioning the UK as a global leader in emerging industries. As part of this plan, Reeves said the government will support regional growth through fiscal devolution that will empower local leaders, and will also create sector hubs in different cities. This includes establishing Leeds’ Northern Square Mile as a destination for global financial services. To support regional growth the government will create new city-level investment funds and allow regions to retain more of the tax revenues they generate, with the aim of stimulating local investment and reducing reliance on central government.

Reeves commitment to supporting technological innovation in financial services, as well as facilitating growth across the country is likely to provide opportunities to businesses in emerging financial services sub-sectors that harness AI and machine learning. Tech-focused sub-sectors, such as embedded finance, could benefit from these plans, including businesses providing payments and money transfers services, peer-to-peer lending services, and insurtech services. Investors focused on these sectors should monitor the government’s progress in establishing finance or technology sector hubs in various cities across the UK, as well as any funding announcements relating to these sectors.

The Mais Lecture reinforced a consistent economic strategy centred on stability, investment, and reform. While the lecture did not introduce any new policies, it did clarify the government’s long-term economic goals and Reeves’ commitment to ‘securonomics’. However, Reeves will need to use the coming months to share further details on the extent to which she wants key sectors within the government’s industrial strategy, such as the financial services and technology sectors, to be aligned with the EU on regulation. The Chancellor is ‘optimistic’ about the government’s ability to drive investment and growth but will need support from the business community to do so. Investors and businesses should consider potential scenarios where they can support the government to ensure that policy, funding and regulation is geared towards creating the best possible environment for growth in the UK.

If you would like to discuss the Chancellor’s growth strategy and its impact on businesses in more detail, please get in touch with joshua@gkstrategy.com.

What impact will data centres have on the UK’s ability to meet its net zero ambitions?

Data centres have been subject to significant scrutiny in recent years, particularly in relation to their impact on the government’s net zero agenda. In correspondence sent to the cross-party Environmental Audit Committee on 20 February 2026, the Secretary of State for Energy, Security and Net Zero Ed Miliband admitted that energy future demand from data centres, and its interaction with the UK’s net zero ambitions, remains ‘inherently uncertain’.

The government has designated data centres as ‘critical national infrastructure’ given they support nearly all economic activities as well as the day-to-day running of public services. Forecasts undertaken by trade association TechUK suggest that data centres have the potential to contribute an additional £44 billion to the UK economy by 2035, highlighting their strategic importance to the government’s economic growth agenda. The government recognises the important role data centres will play in our economy, evidenced through its commitment to deliver nearly 100 new centres over the next five years. Nonetheless, this has led to environmental groups seeking clarity from the government on how it will deliver this ambition while meeting its environmental obligations.

Under plans to expand the number of data centres, policy challenges have been raised by the wider energy sector and industry bodies, particularly around their use of energy and water. In March 2022, the National Grid Electricity System Operator (ESO) estimated that data centres consume around 2.5% of the UK’s electricity. It is likely that data centres’ electricity consumption will increase significantly over the coming years. Forecasts published by Oxford Economics in December 2025 estimate that data centres’ demand will represent 30.4% of UK’s commercial electricity consumption by 2030.

Alongside rising demand for electricity to power data centres, there is widespread debate about their impact on the water sector. In a report published by the government’s Digital Sustainability Alliance’s (GDSA) in September 2025, global water usage is predicted to increase from 1.1bn cubic metres to 6.6bn cubic metres by 2027. There is limited data available on how much water data centres use given there is currently no obligation for centres to report their water consumption. It is unsurprising therefore, that there are a range of opinions around this issue. While trade associations like TechUK challenge the notion that data centres are ‘inherently water intensive’, non-profit organisations such as Global Action Plan, have criticised the sector’s lack of transparency.

Despite the uncertainty of the sector’s capacity to support the government’s net zero ambitions, there is appetite, particularly from parliamentarians, to better understand the environmental impact of data centres. Last month, the Environmental Audit Committee launched its own inquiry into the risks and opportunities of data centres in the UK, with the committee inviting submissions from interested parties until 6 April 2026. Parliamentarians have also launched a new All-Party Parliamentary Group  to examine the impact of data centres on economic growth and the UK’s net zero ambitions.

As an essential infrastructure for digital storage and the wider economy, there is potential for data centres to help facilitate rapid economic growth for the UK. While data centres are starting to come under scrutiny from parliamentarians regarding their impact on the environment, there is scope for the sector to engage with government which will be very much in listening mode. The government acknowledges the value of data centres but in order for businesses operating in this sector to succeed, the sector will need to challenge the notion that it will constrain the government’s environmental agenda.

If you would like to discuss the impact of data centres and the government’s net zero agenda in more detail, please reach out to Noureen Ahmed at Noureen@gkstrategy.com.