Please click here to access the briefing: GK Strategy – Andy Burnham Labour Party Conference – October 2026
This will be followed up a separate briefing on the government’s commitment to reform the adult social care system and introduce a National Care Service.
In his first address to Labour Party Conference as prime minister, Andy Burnham set out plans for a new government-backed body, Great British Grid (GBG), as part of a wider effort to address high energy costs, accelerate infrastructure delivery and support economic growth.
For investors and businesses, the government’s plans for GBG are unlikely to represent a fundamental change to the ownership or operation of Britain’s electricity network. The Department for Energy Security and Net Zero has said that GBG will ‘complement, rather than replace’ the companies already responsible for operating the electricity system, with the role of existing network operators remaining unchanged. Instead, the focus is on changing how future transmission infrastructure projects are developed and delivered.
GBG will operate as a branch of Great British Energy (GBE) and will participate in bids for future transmission projects. Rather than incumbent network operators automatically developing new infrastructure, projects could be awarded through a competitive process involving bids from GBG, existing network companies and private investors. The government argues that increasing competition in this way will help speed up grid expansion, support economic growth and reduce the costs of network investment that are ultimately passed on to consumers through energy bills.
The scale of GBG’s involvement will depend on the funding available to it. GBE was allocated £8.3 billion of capital funding for this parliament, although a proportion of that funding has already been committed to other priorities, including support for small modular nuclear reactors. While the final allocation to GBG has yet to be confirmed, it is likely to be small compared with the scale of investment required across the electricity network. Planned transmission investment during the 2026-31 regulatory period alone is expected to total around £70 billion, with substantial further investment required throughout the 2030s.
The use of competition to deliver transmission infrastructure is not entirely new. The Competitively Appointed Transmission Owner (CATO) regime, introduced under the Conservative government in 2023, was designed to open parts of the transmission network to competitive procurement. GBG therefore builds on an existing framework for competition, while giving the state a more direct role in bidding for future transmission projects.
The government has also announced reforms that would allow businesses to construct their own grid connections rather than waiting for network operators to undertake the work. Ministers hope this approach will accelerate the delivery of energy projects, industrial developments and AI data centres in the UK.
While these reforms may help reduce some delays, many industry groups continue to argue that the planning and consenting system remains one of the biggest barriers to faster infrastructure delivery. The success of the government’s approach is therefore likely to depend not only on changes to grid connections, but also on whether wider planning reforms can shorten approval times for major energy projects.
Please contact Brett Morton via brett.morton@gkstrategy.com if you would like to discuss the government’s energy reforms in more detail.
Erin Caddell of GK Strategy’s American partner Anchor Advisors examines the shifting US midterm landscape and the implications of a potential Democratic resurgence.
Like a surfer looking out at the ocean for the next big swell, US political observers are seeing signs of a gathering political “Blue Wave” – a potential shift in control of the House of Representatives and/or the Senate to Democrats in the midterm elections on 3 November. At this point, it is difficult to tell whether the wave will be big or small, and in the rapidly shifting seas of American politics, it could dissipate before it hits the shore. But US-focused investors and corporates should start paddling now to position themselves for the policy changes likely to occur.
As with most US political analysis these days, the midterm election outlook begins and ends with one man: President Trump. Arriving at the halfway point of the president’s term, midterms are often viewed as referenda on the incumbent administration’s progress. And with Trump dominating his party and the political debate as few have, midterm campaigns have been more focused on Trump than on the individual House and Senate candidates.
Here, the news is not good for Trump and the GOP. Continuing a trend we’ve noted in this column in recent months, Trump’s approval rating continues to grind lower due to high fuel prices driven by the unpopular US war with Iran, sticky inflation, and more recently, by a reacceleration of a trade war with Canada. An FT poll released on 6 September is indicative of the trend of recent US voter surveys: The poll of 1,914 registered voters found that 33% approved of Trump’s performance at the end of August, down from 39% in May. Equally troubling for the GOP, the survey found that independent voters’ approval of the president dropped from 32% in May to 26% in August.
Trump’s sagging popularity is being felt on the campaign trail. In the House, Republicans hold a slim majority of 218-214, meaning Democrats need to flip three seats to seize control. 270towin, an election forecaster, pegs 215 House seats as leaning Democratic, and 201 Republican equivalents, with 19 toss-ups in the 435-member body. Since 1946, the incumbent party has lost an average of 25 House seats in the midterms. Betting markets ascribe a 90% likelihood of a House flip in November.
In the fight for the Senate, with Republicans holding a 53-47 edge, Democrats need to win a net four seats to gain control (the Vice President breaks ties). The Democrat candidate is leading in the latest polls for GOP-held seats in Alaska, Maine, Iowa, North Carolina, Ohio and Texas, according to RealClearPolitics, though the margins are within a point or two in several, and a couple of Democrat-controlled Senate seats are also close. Betting markets peg odds of a Democratic Senate flip at 62-3%, up from 30% a year ago.
A lot can change in two months. But the data begs the question: What would it mean for US-focused investors and corporates for Democrats to win one or both houses of Congress in November? We focus here on two sectors: healthcare and renewable energy:
Healthcare. The healthcare and health insurance sectors have faced stiff headwinds throughout the second Trump Administration. The One Big Beautiful Bill (OBBB) – the centerpiece of the Republican legislative agenda in the first half of Trump’s second term – approved US$911 billion in spending cuts in the Medicaid health-insurance program for the poor over 10 years (some 15% of projected spending before the bill’s passage) and tightened eligibility requirements. Trump’s health secretary, Robert F. Kennedy Jr., has also pursued an anti-vaccine agenda that has hurt large pharmaceutical companies as well as primary-care physicians who administer vaccines to young children.
Democrats would not gain the ability to overturn administrative decisions even if the party wins the House or Senate in November. But through the appropriations process, a Democrat-led congressional chamber would dig out an old DC playbook: delay and live to fight another day. Democrats would attempt to delay the mandated spending cuts and tougher eligibility requirements for Medicaid recipients, many of which are not scheduled to come into effect until 2027. Democrats would also push back through budget tactics and oversight hearings against RFK Jr.’s moves to water down vaccine mandates and appoint anti-vaccine members of government health advisory panels. Beneficiaries could include hospitals (which receive substantial revenue from serving Medicaid recipients), Medicaid-focused insurers, primary-care physicians’ practices and drug manufacturers.
Renewable Energy. It is a worthwhile debate whether healthcare or renewable energy has been a bigger punching bag for Trump 2.0. We’ll give the nod to renewables, as not even health providers have been paid by the government not to provide their service. The Trump Administration has taken this unusual step, offering to pay more than US$2 billion to offshore wind developers sponsors to stop and invest in fossil-fuels projects instead. The Administration reported it approved new oil and gas leases on federal lands at a pace 55% greater in 2025 than in the last year of the Biden Administration in 2024. Yet the advantages of renewable development over fossil fuels – notably lower costs and faster speed to market – have meant that renewable production has still been growing despite the Trump Administration’s stance. The U.S. Energy Information Administration (EIA) reported that total U.S. energy production grew 3.4% y/y in 2025, with natural gas production increased by 4%. Renewable energy production rose 3%, equal to the growth in crude oil output, with both solar and wind setting new records (see below). Despite Trump’s constant anti-renewable, pro-fossil-fuels rhetoric, 61% of Republicans told Pew Research Center in 2025 they support more solar power (77% for all respondents), while 48% favor more wind (68% overall).
This bipartisan base of support could lead to improved market conditions for renewables firms under a Democrat House and/or Senate. As part of broader negotiations over the federal budget or on raising the debt limit, Democrats could push to restore tax credits for renewables projects passed during the Biden Administration in the Inflation Reduction Act (IRA) that the Trump Administration and the GOP-controlled Congress have reversed or limited thus far in Trump’s second term. Democrats would also use their investigative powers in Congress to scrutinise the payments the Trump Administration has made to halt offshore wind developments. Ultimately, market demand may lead policy: The new data centers necessary to power the AI boom are expected to increase total U.S. electricity demand by 5-10% by 2028, according to estimates by the University of California’s Lawrence Laboratory. As loyal Westminster Unwrapped readers know, the data-center boom has been met by a sudden public backlash across the U.S. (see our August 2026 note “Can’t buy me love: American public opinion turns against data centers – what’s next?”). But even if actual data-center construction is half that of projected, the U.S. will need significantly more renewables capacity to meet demand even if oil and gas development proceeds apace.
If Republicans rebound and hold both houses of Congress in November, the healthcare and renewables sectors would face a challenging policy landscape, but one no more hostile than the one they have managed through since January 2025. But a small blue wave could materially improve the operating environment for sectors out of favor thus far in Trump’s second White House stint, even better if a big one crashes to shore.
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.
GK’s report on apprenticeships and skills can be accessed here: GK Strategy – Apprenticeships Report – April 2026
Lessons from the battlefields of Ukraine, combined with rapid technological innovation, have pushed drones firmly into the centre of UK defence policy. Yet, the implications of this shift extend far beyond military capability and the defence sector. By scaling domestic manufacturing and considering drone technology within wider growth strategies, there is potential to unlock growth across many sectors in the UK economy.
The pace of technological development seen in Ukraine has demonstrated how quickly drone capability can evolve when innovation is tested under real-world conditions. Low-cost drones, AI-driven autonomous systems, and advanced first-person view drones have challenged traditional defence strategies. For the UK, this has underscored the importance of building domestic drone capability to enhance national security.
To build these capabilities, the Ministry of Defence’s 2024 Defence Drone Strategy and 2025 Defence Industrial Strategy set out a vision that includes drones as a central component of military capability. This has been reinforced by the 2025 Strategic Defence Review, in which the government recognised that drones will be central to future conflicts and outlines its ambition to support innovation and growth in the drones sector.
For defence contractors, the implications are immediate. The government’s desire to deliver progress at pace on these strategies means that businesses that can demonstrate resilient and tested technologies are positioned to win contracts. However, the effects of this industrial strategy will be felt far beyond defence, with these moves creating large spillover effects to the civilian drone market. Defence procurement can help firms scale production, de-risk investment, and move more quickly into civilian markets. In addition, many of the technologies that are useful as defence capabilities will assist in commercial settings. For instance, advanced first-person view drones will allow drones to be used more easily for law enforcement and infrastructure inspection. Counter-drone technologies also have clear commercial value, Systems developed to detect and neutralise hostile drones can be deployed to protect airports, prisons, critical national infrastructure, and other sensitive sites.
Together, these applications illustrate how defence-led innovation can unlock the sector’s wider economic potential – estimated by government-commissioned analysis to reach up to £103 billion by 2050, as we highlighted in our recent article. This demonstrates the scale of the commercial opportunities now emerging for businesses and investors, as technologies initially developed for defence are increasingly able to scale into regulated civilian markets, supported by a growing ambition within government to be a world-leader in drone technology.
However, despite this opportunity, risks remain. Defence procurement is politically sensitive and shifts in budget priorities over the course of a parliament could constrain investment. This means that businesses must continue to engage with government to reduce regulatory barriers to create a favourable regulatory environment. Businesses who engage with the government’s existing work on regulatory innovation and help government understand where other challenges exist will reap the benefits of the UK’s focus on the drones sector.
If you’d like to discuss the drones sector and related policy in more detail, please reach out to Jacob on Jacob.walsh@gkstrategy.com