With 2024 bringing about a change in government following the summer General Election, 2025 will present many interesting opportunities for business and industry to engage with the Labour government as it settles into its first full year in office.
Following its thumping victory in July, the second half of 2024 saw Labour coming to grips with being in government for the first time in 14 years, as Whitehall adjusted to a new administration not used to wielding the levers of power. Sir Keir Starmer’s first 6 months have been characterised by a ‘blame the previous government’ strategy, primarily around the Conservatives economic mismanagement and failing public services.
This strategy will fall increasingly on deaf ears and the Prime Minister now needs a strong set of plans to change the country and win over the electorate amidst his party’s plummeting popularity.
The Departmental Spending Review
The upcoming spring spending review will therefore be a significant event, even more so given how poorly received the first Labour budget was in the latter half of 2024. The review will outline spending plans for government departments over the course of this new Parliament, and gives the Labour Party a chance to demonstrate their economic credentials and efficiencies in running Whitehall.
This will undoubtedly be yet another tough test for Chancellor Rachel Reeves, who has preached the need for efficiency gains but also acknowledged the need for public services crying out for investment.
Elsewhere much has been made of the government’s 10 Year Health plan, with the potential to instigate large-scale reform of the NHS. Health Secretary Wes Streeting is expected to outline further how the recommendations in Lord Darzi’s independent review will be implemented in the early part of 2025. With the NHS being one of the big three policy areas voters care the most about (along with immigration and the economy/cost of living), this will be a crucial period for the new government and one which presents many opportunities for collaboration.
The future of local government
A significant development in the last few weeks of 2024 centred around the government’s reshaping of devolution and local governance. Deputy Prime Minister Angela Rayner announced the ‘Devolution Revolution’, increasing the powers given to mayors on housing, transport and skills, as well as increasing the number of mayors to cover England.
The announcement has divided opinion, but the immediate effect will be the necessity of adapting elections to the redesigned electoral systems, which has created the potential for delays in some of the upcoming local elections this May.
This inevitably led to public criticism of perceived ‘cancelled’ elections, set against a backdrop of a government struggling to establish a foothold for competency with the voting public. As its first key electoral test, a delay could offer valuable time for Labour to rebuild support amongst the electorate and save themselves a difficult few months defending bad results.
The future of the Opposition
Given the size of Labour’s parliamentary majority, it would be easy to assume that the opposition parties carry little weight over the course of this Parliament. However, given the early struggles that the Labour Party are experiencing it is important to engage across the political spectrum.
New Leader of the Opposition Kemi Badenoch will want to ensure that she solidifies the Conservatives as the true alternative, even after the disastrous results in the summer. Elsewhere, Reform leader Nigel Farage, fresh from his Christmas baiting of the Tories over Christmas and potentially flush with foreign investment, will want to continue to build his momentum and capitalise on his party’s insurgent popularity, taking chunks of support away from both left and right.
An international affair
International affairs will inevitably be dominated this year by the return of President Donald Trump to the White House following his election victory against Kamala Harris in November.
The Trump presidency will have ramifications across foreign relations, especially with regards to China, Russia, Iran and North Korea, as well as allies such as Europe and the UK, and global bodies such as the United Nations (UN).
Much has been made of many less than complementary remarks that Labour politicians have historically made of the President-elect, and it will be therefore crucial for Prime Minister Starmer to look to solidify his own relationship with Trump when he returns to the Oval Office, especially given the potential talk of trade tariffs coming from Washington.