Tag Archives: election

‘End of Term’ Reflections for Labour

The highs and lows of the first parliamentary year

In its first year since winning the 2024 general election, Starmer’s government has shown intent to implement its manifesto pledges, but whether this has translated into successful policy delivery remains a subject of debate. Ministers have pursued ambitious reforms in areas like trade, education, health, and energy, but they have also faced political turbulence and criticism over policy missteps, particularly around tax, grooming gangs and welfare reform.

Crucially, the government seems to be unable to unlock that elusive growth on which so much of its spending plans depend. Much of Labour’s policy programme is still in its early stages, with a strong emphasis on structural reform in Whitehall and long-term planning which should be commended. However, this emphasis leaves the government with few immediate wins to show the public and, with key reforms still light on detail and outcomes, questions are already mounting about the government’s effectiveness.

On the international stage, however, the Prime Minister has emerged as a confident statesman. His handling of the Trump presidency, securing of trade deals with the US, EU and India, and continuation of the UK’s support for Ukraine have won praise both at home and abroad. This has helped to re-establish Britain’s role as a serious global actor – although notably absent of any meaningful involvement from foreign secretary David Lammy.

Domestically, there has been modest progress on housing and NHS waiting times, but delivery has been hampered by fiscal constraints. But domestic policy also reveals some of the sharpest criticism. The removal of the Winter Fuel Payment from millions of pensioners, presented as a necessary fiscal decision, sparked major backlash and a messy U-turn. The electorate does not expect these sorts of economic decisions from a Labour government, which has resulted in widespread reputational damage from a policy that seems to contradict Labour’s core identity. The increase in employer National Insurance contributions (NICs) has also been poorly received, with concerns over its impact on jobs and wages. On immigration, growing public unease and the government’s mixed messaging has opened space for Nigel Farage’s Reform UK to gain traction and control the narrative.

Overall, the government has had a mixed first year. There was no political honeymoon, with downbeat messaging on the economy, the early ‘freebies scandal’ and unpopular welfare cuts undermining any prospect of ministers picking up some early momentum. Coupled with a challenging economic backdrop, rising support for Reform UK and the geopolitical volatility exacerbated by Trump’s return to power, the need for a recalibration of political and policy strategy is becoming clear. The government’s commitment to its manifesto is not in doubt, but turning that commitment into visible, meaningful results is the test that now lies ahead.

Labour and the business & investor community: a genuine partnership for growth?

Courting investors and businesses was a key part of Labour’s pre-election pitch. The Prime Minister and Chancellor were keen to demonstrate the party’s credibility on the economy and support investment into the UK as part of its wider growth ‘mission’. However, in government, Rachel Reeves used her first fiscal event – the 2024 autumn budget – to increase employer NICs by 1.2%, representing a £25 billion tax hike on businesses. This came alongside increases to Capital Gains Tax and the National Living Wage. The latter measure has been particularly costly for businesses with a large proportion of low paid workers on their payroll.

While the government argued this was necessary to address the fiscal ‘black hole’ it inherited from the outgoing Conservatives and to boost support for low-paid workers, it has done little to inspire confidence in the business and investment community. Indeed, GK Strategic Advisers and former ministers David Laws and Rob Halfon both warn that the employer NICs rise has been particularly damaging to the government. This is despite early positive decisions on infrastructure and commitments to speed up planning processes. Since last year’s budget, ministers have been playing catch up in their efforts to restore confidence amongst businesses and stimulate private investment at a time when geopolitical uncertainty is threatening to wreak havoc on the global economy.

President Trump’s ‘Liberation Day’ announcement on 2 April, which saw his administration unveil sweeping global tariffs, was a watershed moment and one which Starmer deftly navigated. The US-UK Economic Prosperity Deal sees the UK sidestep many of the Trump’s tariffs and, amongst other provisions, allows UK car manufacturers to sell vehicles to the US at a 10% tariff rate and cuts tariffs on UK aerospace exports to zero.

Despite Starmer’s success on the international stage, challenges lie ahead for the government in its relationship with businesses and investors. The Employment Rights Bill is due to complete its passage through Parliament in the autumn. The legislation introduces a new package of workers’ rights, including day one employment rights, ending the use of certain zero hours contracts and improving access to flexible working arrangements. Many of the measures contained in the bill will be subject to further consultation with businesses over the coming months. It is vital that the government gets the eventual implementation of these reforms right to avoid any further damage to its relationship with the business and investment community.

As parliament rises for summer recess and we take stock of the government’s first full parliamentary year, it is fair to say that the public-private partnership for growth that Labour first envisaged when it came to power has not yet materialised. As put by GK Strategic Adviser and former Health Minister Steve Brine: “The growth mission, which sits at heart of the government’s plan to get re-elected, has been hampered by uncertainty from the shifting taxation landscape and the many reviews and consultations that are yet to translate into firm policy direction.”

Starmer will need to translate the success he has found on the international stage to his domestic agenda if he hopes to bring businesses and investors back on side and enable them to deliver the economic growth upon which so much of his government’s policy agenda relies.

The ‘ones to watch’

Westminster has been speculating for several months as to whether the Prime Minister will instigate a cabinet reshuffle before the end of 2025. Though it may seem like a distant prospect, many are already keeping an eye on some Labour MPs who could be next in line for promotion.

Peter Kyle MP: With experience as a former Special Adviser in the last Labour government, Kyle is a slightly more seasoned voice in the Labour ranks than other rising stars. Described by Steve Brine as “hugely gifted”, the Science and Tech Secretary has consistently impressed, particularly in his initiative to coordinate a unified cross-government approach to data, digital and AI, and as a talented and dependable ‘Minister for the Morning Round’.

Torsten Bell MP: Formerly the chief executive of the Resolution Foundation and a Labour party aide during the 2008 financial crisis, Bell knows the ins and outs of policy, economics and politics. Though a fresh-faced Labour MP, part of the 2024 intake, he is already holding ministerial positions across both HM Treasury and the Department for Work and Pensions, and is expected to continue to rise through the ranks.

Miatta Fahnbulleh MP: Taking over the seat Harriet Harman represented since 1982 was no small feat, but Fahnbulleh has not disappointed. Like Bell, Fahnbulleh was elected in July 2024 and was immediately appointed to a junior ministerial role. A former Cabinet Office official and CEO of the New Economics Foundation, her experience has made her a capable MP and minister. Her reputation for going above and beyond has not gone unnoticed, with David Laws remarking she is “a bright junior minister who has already impressed her colleagues”.

Josh MacAlister MP: Otherwise known as education and social care’s ‘golden child’, MacAlister entered parliament with a reputation that precedes him. MacAlister was chosen by the Conservative government to conduct an eponymous review of children’s social care in 2021. Now serving as the parliamentary private secretary to Pat McFadden – one of the government’s most instrumental figures – MacAllister has been carefully watching the recommendations of his review being implemented through the Children’s Wellbeing and Schools Bill. He is certainly proving himself to be successful campaigner and capable MP.

The next 12 months, and beyond…

For David Laws, the priority for the next 12 months is “growth”. The Chancellor faces the daunting task of stabilising the public finances while avoiding tax rises in the autumn. However, recent briefings suggest that tax rises, particularly on higher earners, seem inevitable unless economic performance improves. Her Mansion House Speech set out Reeves’ plans to unlock growth in the financial services sector, while trade deals struck signal an important first step towards a more outward-facing agenda. A more pragmatic approach to Europe, while politically fraught, remains a low-cost, pro-business lever available to the government to recover some of the growth lost post-Brexit.

Another priority is the ‘retail offer’ that helped Labour win in 2024: NHS reform. Steve Brine argues that meeting the 18-week waiting time target for NHS elective care would be seen as a real mark of success. Elsewhere, there are the structural reforms underway for planning and devolution that were fundamental to the “decade of national renewal” promised during the election campaign. Deputy Prime Minister Angela Rayner, empowered and ambitious within the government, is quietly progressing with this agenda with little sign of slowing down.

David Laws suspects that we will also see those more talented ministers begin to demonstrate progress in exciting vanguard sectors like technology, AI and clean energy: areas which are vital to enhancing the UK’s economic position.

Measurement of success in May

The real test of success will be the elections in major cities and, significantly, in the Welsh and Scottish parliaments in May 2026. While midterm elections are often tricky for incumbent governments, Labour would not have been expecting to weather such dissatisfaction so soon, and a poor performance at the May 2025 local elections was an early warning sign of this.

The traditional dividing lines of left and right, class and geography, are no longer accurate measures of voter sentiment. Rather, the electorate is split into groups defined less by ideology, and more by attitudes to institutions, cultural, social and economic issues. Steve Brine emphasises that support for the two main parties has always been fluid. However, in 2024, Labour and Conservatives collectively won just 54% of the vote – a post-war low. Recent polling showing double digit support for smaller parties like the Greens suggests fertile ground for insurgent parties that are attracting support from new parts of the electorate that they wouldn’t normally have.

Technocrats vs. Populism

GK Strategic Adviser and former Care Minister Phil Hope warns that the rise in populism is the “biggest threat to our democratic institutions”. For No.10, the immediate concern is Reform UK. The Prime Minister’s Chief of Staff, Morgan McSweeney – who is often characterised as the architect of Starmer’s premiership – believes that right-wing populism must be defeated by showcasing competent government. In practical terms, this means delivering real improvements to the way people interact with public services, and being tougher on immigration, to reassure disenfranchised, Reform-leaning voters that their economic and cultural concerns are being addressed.

While Reform grabs the headlines, Labour also faces mounting dissent from the left. Disillusioned, younger voters are drifting towards alternatives that they believe are more convincing and radical on climate, equality and security issues. While 6% of Labour’s 2024 voters have moved to Reform, three times as many have shifted to parties of the left. Recent polling gains for the Green Party and a new party led by Jeremy Corbyn underscore this trend. It is worth remembering that Corbyn secured 40% of the vote in 2017 compared to Starmer’s just 33.7% in 2024. For a Labour leadership that has worked hard to marginalise the hard left, this insurgent left-wing movement could expose vulnerabilities in Labour’s emerging strategy of wooing Reform voters on issues such as immigration and the so-called ‘culture wars’.

Clowns to the left of me, jokers to the right

Labour now finds itself squeezed on both its political flanks, while struggling to articulate a unifying strategy for the broad, fragile coalition it assembled in 2024. Without a coherent narrative, it risks alienating voters whose priorities and values increasingly diverge.

In political terms, there is still a long way to go until the next election. But in the absence of a compelling narrative or delivery on issues such as immigration, Downing Street faces a difficult task to work out who its voter base is and what it wants. As GK’s strategic advisers all note, an economic upturn would relieve much of this pressure. But with that unlikely in the next 12 months, the consequences will be felt at the ballot box in May 2026 – where Labour’s already narrow share of the vote could be eroded further.

Scott Dodsworth // Senior Partner & Managing Director // scott@gkstrategy.com

GK Point of View – View from Westminster

GK Associate, Joshua Owolabi, assesses Rishi Sunak and Keir Stramer’s recent struggles with rogue MPs.

Internal strife muddying the waters for both the Conservatives and Labour

Former Prime Minister, Harold Wilson, joked frequently about the frenetic pace at which politics could move. Over his long career, he became well-acquainted with the turbulence that intra-party politicking could bring. Keir Starmer and Rishi Sunak may be able to relate. Clearly, the last few weeks have been taxing for them both as they struggle to deal with internal conflicts.

There has been scant opportunity for Starmer to enjoy the emphatic byelection result in Wellingborough, where the Labour Party overturned a Conservative majority of over 18,000 votes. It doesn’t matter that only a fortnight ago Starmer led his party to its largest swing in a byelection since 1994. Since then, the Labour Party has needed to clamp down on grassroots dissent over the decision to withdraw support for its Rochdale byelection candidate, Azhar Ali. Days later, Starmer was scrambling to avoid a rebellion and the potential resignation of Shadow Ministers, after the SNP brought forward an opposition day motion on the war in Gaza.

The Prime Minister has been blindsided yet again by some of the more outspoken Tory MPs. Lee Anderson, who had been Deputy Chairman of the Conservative Party as recently as January, had the whip suspended following his incendiary remarks about the Mayor of London. Various Tory MPs have either defended or criticised Anderson since his outburst. Sunak has attempted to placate both sides, calling Anderson’s comments ‘wrong’ while also refusing to label them as ‘Islamophobic’.

However, Anderson doubling down on the comments has left Sunak with a problem to solve. Can he deal with the Anderson situation in a way that keeps the right-wing of his party happy, but also heeds the calls from ‘One Nation’ MPs for Anderson to be disciplined? Unfortunately for the Prime Minister, the answer to that question seems obvious.

Meanwhile. a speech from Sunak’s predecessor elicited the response “err… who is Liz Truss?” from a perplexed American audience at a conservative political conference in Maryland. Despite the criticism that Truss’ speech has received, Sunak will be concerned by her decision to lean into conspiracy theories about the ‘deep state’ and her call for Nigel Farage to rejoin the Party. Along with the Lee Anderson headlines, it highlights the way in which Sunak is struggling to control the narrative.

As Tory factions battle each other for control after the election and the Labour leadership works to limit self-inflicted wounds before it, the approaching Spring Budget hasn’t received much attention. Sunak, Starmer, Hunt and Reeves will need their MPs to get back on message as they set out their economic visions. They’ll be hoping that the infighting of February gives way to a renewed focus on policy in March.

GK Point of View – The Early Years Conundrum

GK Adviser Felix Griffin assesses the potential battle lines between Labour and the Conservatives in the early years sector ahead of the General Election.

A Political Football in the Education Arena

In the ever-evolving education landscape, early years policy has found itself thrust into the centre of a complex and highly contested arena. Incrementally, the situation has worsened over the years, with the ‘cost of living’ crisis and systemic staff recruitment and retention issues taking their toll. Early years policy is now a political football, bouncing between competing ideologies and vested interests.

There are now clear division lines between Labour and the Conservatives. Labour appears staunchly focused on prioritising comprehensive child development, emphasising a holistic and nurturing approach to early education. On the other side, the Conservatives have pivoted towards viewing the early years as a means of getting parents back to work, shaping their policies with a lens primarily focused on economic productivity.

With the Conservatives using free childcare as a ‘vote winner’, as previous governments have done, there is concern that the implementation failures that have plagued the sector for so long will persist.

As the prospect of Labour taking the reins becomes increasingly likely, it stands at a crossroad. The Party is confronted with the pressing decision of whether to persist with a clearly broken framework, risking further erosion of the quality of early childhood education, or opting for the challenging path of withdrawing the current ‘free childcare’ system, potentially facing backlash from parents and stakeholders.

However, amidst this dilemma, there is a transformative opportunity – to reform the existing system comprehensively. By engaging in strategic overhauls and policy adjustments, informed by its ‘major’ review of the early years sector, Labour has the chance to steer the course towards a more effective, equitable, and responsive early years education system, ensuring a brighter future for the nation’s youngest minds.

GK Point of View – The impact of student visa reforms

GK Associate Hugo Tuckett assesses the recent student visa reforms, and what they mean for the higher education sector.

With the Government continuing to struggle in the polls, Rishi Sunak has launched a full-frontal assault on the immigration system aimed at bringing numbers down and cutting into Labour’s seemingly unassailable lead.

Following a record net migration figure of 745,000 in 2022, the Government has undertaken a series of measures to tighten the UK’s immigration system. As they are the largest group of non-EU migrants, international students have come into the firing line.

In May 2023, the Government introduced new restrictions to student visa routes by preventing international students from bringing family members on all but post-graduate research routes, as well as banning people from switching into work routes until their studies have been completed. These measures officially came into force on 1 January 2024.

The Government expects this to result in an estimated 140,000 fewer people arriving in the UK. However, with years of frozen domestic tuition fees and reductions to teaching grants stemming from Britain’s exit from the EU, it is unclear whether the UK will retain its attractiveness to international students, the very group who have been covering the sector’s budgetary shortfalls.

Notably, the Government’s own impact assessment refuses to consider the effects of preventing international students from bringing dependants on all but post-graduate research routes, given the lack of available evidence to determine how many students (who bring dependants) will be dissuaded. On a more positive note, the impact assessment finds that only 2% of total students with an expired student visa would be affected by the ban on switching work routes until their studies had been completed.

Given the distinct possibility that numbers of international students arriving in the UK drop because of the changes, financial pressure will grow on higher education providers who have made over-optimistic assumptions about future growth in international student numbers as a means of balancing the books.

As we enter an election year in which the Conservatives will be reluctant to loosen immigration controls, the likelihood that some providers collapse under the financial strain cannot be overlooked.

Party conference 2023

As the annual conference season draws to a close, possibly the last before a general election next year, the main political parties will be reflecting on the success or otherwise of the Manchester and Liverpool gatherings. Both conferences were attended by our political advisers, who reflect on Conservative and Labour conference below.

As with past conferences, the measure of success differs, this was Rishi Sunak’s first as Tory leader, a more stable but still divided party. Just a year ago Liz Truss led a chaotic prelude to her short time in No10 and this year’s collection of Nigel Farage (as journalist) and long awaited HS2 announcement wasn’t the best backdrop as the Prime Minister attempted to cast his leadership as a force for change. Contrast Liverpool and the balance of a Labour party consistently ahead in the polls, with a more united and coherent party than for the past decade – a gathering of Labour activists who were at pains not to be carried too high on the prospect of government.

In a change to the usual order, the Conservative’s met first. The ongoing saga of will they, won’t they with HS2 didn’t help Rishi Sunak’s first conference as party leader. While the Prime Minister’s team struggled to get a hold of the narrative over the three days in Manchester, the former leader and likely leadership hopeful, Liz Truss and Suella Braverman, were quick to try and seize the agenda. Where the party truly seemed united was on the importance of support for climate action, and this was reflected in the sheer number of well-attended fringe events giving serious attention to how the UK can credibly retain its status as a climate leader. The Conservatives, despite recent announcements seemingly backing away from climate policy, understand that this remains a key vote-winner. Cobbling together a sell-able vision for the climate to the electorate could be make-or-break for the party in any upcoming election.

Sunak’s conference speech, his most important as leader saw the Prime Minister attempt to create some separation between his premiership and what he referred to as the previous “30 years of a political system which incentivises the easy decision, not the right one”. This will be a tough balancing act in the months ahead of the upcoming election. The 30-years Sunak references encompasses not only former Labour leaders Tony Blair and Gordon Brown, but no fewer than five Conservative Prime Ministers. The key question going into an election year will be whether Sunak can create that separation and be given the opportunity to push forward with his ambitious reforms to education, or whether he will be rejected by the electorate as more of the same.

Keir Starmer’s speech embodied Labour conference in Liverpool this week. A leader and a party more at home with its values and a confident, clear, coherent, even hopeful message about Britain’s future – a decade of national renewal. The party wanted a clean conference, a solid platform speaking to business leaders and the wider public, the opportunity now to project Keir Starmer’s message for the country which faced down the shame of the Corbyn-era and proudly bound past Labour success with a party of service, building a new country over the next decade and beyond. The test now is for the party to successfully project the same confidence beyond Liverpool, and Westminster, to the country at large.