GK’s ‘Westminster in 2025’ report sets out the key political themes from 2024 and what we can expect to see over the coming year. Please click here to download the report.
2024 will undoubtedly be remembered as a year which played host to a seismic shift in the political landscape. Labour secured a landslide election win, overturning 14 years of Conservatives in No.10, and Donald Trump became the first US president since Grover Cleveland to be elected to serve non-consecutive terms.
While we won’t have a general election and a US presidential race to contend with this year, 2025 shows no signs of slowing down and there will be several significant political events which the team at GK will be paying close attention to. The local elections in May will serve as the first major electoral test for the new Labour government which could place further pressure on Keir Starmer’s administration. Next, Chancellor of the Exchequer Rachel Reeves will be presenting the government’s first Comprehensive Spending Review (CSR) to set individual departmental budgets for the rest of the parliament. Then, Secretary of State for Health and Social Care Wes Streeting will put forward his 10-year plan for the NHS which is likely to have significant ramifications for businesses and investment in the healthcare sector.
This report, which is the first of a series that we plan to publish throughout 2025, analyses Labour’s record in power since last year’s general election, the Conservatives’ performance in opposition, the economic outlook, as well as business and investor sentiment. It draws on GK’s depth of expertise from across the political spectrum, experience in government and knowledge of financial markets from our expert transaction advisory team.
Louise Allen, Senior Partner and Chief Executive
State of the Nation
Scott Dodsworth, Senior Partner & Managing Director, with reflections from GK Strategic Advisers the Rt Hon Rob Halfon (former Skills Minister) and Phil Hope (former Care Minister).
Labour has found it hard to communicate to voters what it wants to do and why. The first 100 days – typically a time when a government makes its most significant impact – was a series of false starts. Multiple rebrands, milestones, missions and foundations have all served to compound the problem.
As we start this new year, we are reminded that our politics is as fractious and volatile as ever, and that while losing parties might sometimes seem down, they are almost never out. Despite Labour’s recent electoral success, its unfavourable numbers are through the floor, the Conservative Party’s polling has recovered, and Reform UK is nipping at the heels of both the main parties. Joe Alder, of leading pollsters JLP, reminds us that ‘it is remarkable to remember that this time last year Labour led the Conservatives by some 20 points, with Reform UK on just 10 per cent’. British politics is entering unknown territory. JLP’s latest polling suggests a genuinely multi-party system, with only a few points dividing Labour, the Conservatives and Reform UK.
The year has started much the same way as the last ended, with Labour struggling not just to find its stride in government but more fundamentally still unable to find its feet. This is against a backdrop of the public’s waning patience and significant political events to navigate that are just around the corner, including the upcoming Spending Review, NHS 10-Year Plan, Spring Forecast and Strategic Defence Review. Former Labour minister and GK Strategic Adviser Phil Hope added:
‘The first six months of a Labour government has been challenging given the economic legacy it inherited. It chose to use its large majority to make difficult early decisions on taxation, spending and economic growth that will mainly bear fruit in the second half of a five-year parliament... 2025 will be a busy legislative time in parliament with, for example, the flagship Employment Rights Bill and a Fair Pay Agreement for care workers being of particular interest to social care.’
2025 will be critical for Labour – the government needs to show tangible progress against key election promises on waiting lists, living standards and immigration. A Cabinet reshuffle, with underperformers at the Foreign, Commonwealth & Development Office and possibly Department for Energy Security and Net Zero out; greater prominence given to stars like Wes Streeting and Peter Kyle, to name two; and a wider reshuffle of the junior ministerial ranks to bring on new talent are almost certainly on the cards. However, with such a large parliamentary party and so few jobs on the government payroll, expect this to be the year of the grumbling government backbencher keen to have clout and flex their political muscle.
After its historic defeat, the Conservative leadership contest saw Kemi Badenoch elected to lead the party and her plan to return to power has several elements. For all the optimism, it starts with a frank acknowledgment of the current state of the party and its standing in the country. As Badenoch made clear during the leadership campaign, the distance from the election means the Tories will not be setting out detailed policies anytime soon. The Conservative Party’s priorities for the year are laid out by GK Strategic Adviser and former minister and chair of the education committee, Rob Halfon:
‘First, rebuilding the party infrastructure both at CCHQ and on the ground. This is done by co-chairs Nigel Huddleston and Lord Johnson, tasked with renewing much-depleted funds. Second, ensure the office of the LOTO (Leader of the Opposition) is fit for purpose, and the Shadow Cabinet is strong and adequately supported. Senior hires like Lee Rowley as Chief of Staff and Rachel Maclean as Head of Strategy are key examples. James Roberts, head of political liaison, is regarded as a formidable operator. Shadow Chancellor Mel Stride and Shadow Home Secretary Chris Philp are highly regarded and regularly put out and about on the media to challenge the government. Third is policy renewal. Rather than rushing into significant policy positions, Badenoch is keen to develop policy over time and ensure the policies developed are credible and respected by the public.’
As we settle back into a busy political year at Westminster, we are all reminded that power ultimately sits with a frustrated, disenfranchised public and, as with many other countries across Europe, voters far more ready to accept lesser-known parties as a means of protesting the status quo. Last year was one of many elections across the globe, and this year must be one of delivery. The UK government needs to find its stride, the public must see positive change in public services, and we should all remain engaged to protect our interests and realise opportunity.