FTI Consulting UK Public Affairs Christmas snapshot 2024

January

Prime Minister Rishi Sunak authorises joint UK–US air strikes against Houthi rebels in Yemen following attacks against cargo shipping in the Red Sea.

February

The Northern Ireland Executive is restored after the Democratic Unionist Party (DUP) ends its two-year Stormont boycott. Labour scraps its plans for a £28 billion annual green investment pledge. Labour wins the Wellingborough and Kingswood by-elections, while George Galloway is elected as the new Workers Party MP for Rochdale.

March

Chancellor Jeremy Hunt delivers the Spring Budget and focused his fiscal wiggle room on lowering employee National Insurance Contributions. Ashfield MP Lee Anderson defects from the Conservative Party to Reform UK. Sir Jeffrey Donaldson resigns as leader of the DUP after being charged with historical sexual offences. Vaughan Gething wins the Welsh Labour leadership election with 51.7% of the vote.

April

Rishi Sunak vows to increase British defence spending to 2.5% of GDP by 2030, while Keir Starmer commits to reaching the same level of spending but without a target date. The Safety of Rwanda (Asylum and Immigration) Bill is passed into law. Scotland’s SNP-Green power sharing agreement collapses and Scottish First Minister Humza Yousaf resigns.

May

Labour takes control of key councils and regional mayors across England, with the Conservatives losing more than 400 councillors. John Swinney is confirmed as Leader of the SNP and Scottish First Minister. Rishi Sunak announces that a general election will be held on 4 July.

June

Nigel Farage announces that he will stand for Parliament in Clacton and that he has resumed leadership of Reform UK. Douglas Ross resigns as leader of the Scottish Conservatives and Leader of the Opposition in the Scottish Parliament while Welsh First Minister Vaughan Gething loses a vote of no confidence in the Senedd following an investigation into the activities of a leading donor to his election campaign. A YouGov poll puts Reform UK ahead of the Conservatives for the first time.

July                        

Keir Starmer replaces Rishi Sunak as Prime Minister following a landslide Labour general election victory in which the party secured 411 seats. The Conservatives are reduced to just 121 seats, with the Liberal Democrats achieving their best ever result with 71 seats. Reform wins five seats while the SNP suffers heavy losses, going from 48 seats to only nine. Labour sets out its legislative programme for its first parliamentary session in the 2024 King’s Speech, covering over 30 bills. Proposals include bills to renationalise the railways, set up a national wealth fund, establish Great British Energy, strengthen the rights of workers, tackle illegal immigration, reform the House of Lords, speed up the delivery of high-quality infrastructure and housing and launch a Strategic Defence Review.

August

The government begins drawing up legislation to abolish the Strikes (Minimum Service Levels) Act 2023, which requires certain striking workers to provide a minimum level of service. A review is launched into Starmer’s appointments of Labour donors to senior civil service jobs following allegations of cronyism. Eluned Morgan replaces Vaughan Gething as leader of Welsh Labour and Welsh First Minister.

September

The government sets out its plan to abolish hereditary peers in the House of Lords. MPs vote 348–228 to restrict winter fuel payments to pensioners receiving Pension Credit. Russell Findlay replaces Douglas Ross as leader of the Scottish Conservatives and Leader of the Opposition in the Scottish Parliament. Cabinet Secretary Simon Case announces he will step down by the end of the year on health grounds.

October

Chancellor Rachel Reeves delivers the Autumn Budget, which saw a 6.7% increase in National Minimum Wage to £12.21 per hour, an increase in employer National Insurance Contributions, a £22.6 billion increase in the day-to-day health budget, cuts to agricultural property relief, an end to the non-domiciled tax regime, and the removal of business relief for private schools. The government publishes a “vision” for its Industrial Strategy. Sue Gray resigns as the Prime Minister’s Chief of Staff and is replaced by Morgan McSweeney. Britain announces that it will cede sovereignty of the Chagos Islands to Mauritius.

November

Kemi Badenoch wins the Conservative leadership election, becoming the first black leader of a major European party. Keir Starmer holds talks with Chinese President Xi Jinping at the G20 Rio de Janeiro summit and emphasises the importance of a “strong UK–China relationship” for both countries. Louise Haigh resigns as Secretary of State for Transport after a previous fraud offence comes to light.

December 

Sir Chris Wormald is appointed as the new Cabinet Secretary. Prime Minister Keir Starmer delivers a major speech on his “Plan for Change”, which sets out six objectives covering the economy, housebuilding, the NHS, policing, pre-school education and green energy.

The Labour Party’s return to power in 2024 will be celebrated as a major achievement in its history. After the 2019 general election, many doubted that the party could reverse its fortunes in a single term. Yet Labour has not only regained power, but it has done so decisively. Alongside the keys to No 10, the party now enjoys a commanding position in the House of Commons. With 402 MPs, Keir Starmer has the mandate and parliamentary majority to execute an ambitious agenda.

However, as a momentous year draws to a close, Labour has come to realise that the business of government is an altogether more serious affair than that of opposition. Polling has revealed a stark drop in support since the July election, with Starmer having the lowest favourability on record of a Prime Minister after five months in power. And with criticism of the Budget from businesses and figures released by the Office for National Statistics revealing that the British economy contracted in October, Labour enters 2025 with a significant amount still to prove.

That’s not to say that it hasn’t been a remarkable year. Having successfully positioned themselves as a government-in-waiting, Labour delivered on its promise when the opportunity came, with the surprise of a summer election doing little to sway the public’s desire for change. A strategically cautious election campaign – the so-called “Ming vase” approach – confirmed pollsters’ expectations and delivered Labour to a parliamentary majority second only to Tony Blair in 1997.

With economic growth the government’s guiding principle, the latter half of the year saw Labour seek to make its mark. Planning reform, enhanced workers’ rights and the publicly-owned GB Energy have been early priorities, with the “five missions” set out in opposition providing a foundation for this. Predictably, Labour has taken a more interventionist approach to the environment and transport than the previous Conservative government, but it has maintained its position that collaboration with the private sector is essential to its growth mission, a message enforced by sweeping reforms announced in the Chancellor’s first Mansion House speech. 

However, a lengthy gap between the King’s Speech and Budget, coupled with rioting at home and crises abroad, did the government few favours. The party’s annual conference in Liverpool, while a celebratory affair for members, was overshadowed by damaging headlines surrounding freebies, in-fighting and the thorny issue of the Winter Fuel Allowance. When Rachel Reeves’ inaugural Budget did come, it was bolder than some had anticipated. The £40 billion tax increase to boost investment was broadly well-received by the public but damaging to Labour’s pro-business credentials, with the rise in employer National Insurance Contributions remaining a point of contention for businesses. The political message of the Budget, however, was consistent with the argument that the Prime Minister has stuck to: the Conservatives broke the country and Labour must fix it; theirs was a politics of performance, ours is a politics of service; they shied away from difficult decisions, we will take those decisions in the national interest.

Yet “change” wasn’t merely Labour’s promise in 2024, it was the story of the party itself. Over half of its MPs are new – a cohort that is ambitious and aligned with Starmer’s vision. While several contentious issues have come to the fore – with Louise Haigh’s resignation, the furore over sue Gray, Starmer’s former Chief of Staff, and the removal of the whip from seven hard-left MPs – the factionalism that once defined the party seems a distant memory. Armed with political power, Labour will begin 2025 eager to deliver. While 2029 seems some way off yet, the clock will run down quickly, and after a rocky start, Labour’s key test will be to regain political momentum and the public’s support.

The writing had been on the wall for the Conservative Party for some time. The historic loss it suffered at the July general election left the party with only 121 MPs in the House of Commons. And while many MPs and advisers felt as though the Conservative government desperately needed to be put out of its misery, having been plagued with a seemingly infinite number of issues, the brutal blow it was dealt by the public was nonetheless devastating.

The former Prime Minister, Rishi Sunak, surprised some in the party and in the wider commentariat by continuing to serve as leader until his successor was elected – the contest being longer than some anticipated. At the outset of the 2024 leadership election, there were six candidates – Kemi Badenoch, Robert Jenrick, James Cleverly, Tom Tugendhat, Mel Stride and Priti Patel. After four months of campaigning, it was Badenoch, the former Secretary of State for Business and Trade and Minister for Women and Equalities – who emerged victorious and took the mantle of a job many judged as a poisoned chalice.

Sunak bowed out as Leader of the Opposition and leader of the party shortly after responding to the Labour government’s inaugural Budget, delivering a robust rebuke of the Chancellor’s political messaging. He defended the Conservative government’s record on the economy, insisting that he had left Britain with the fastest-growing economy in the G7, lower borrowing than France, America, Italy and Japan and the second-lowest debt in the G7. In a bittersweet twist of irony, many in the party felt that it was Sunak’s best performance at the despatch box and further evidence that he was always far more comfortable with an economic brief rather than the wide-ranging brief he had to manage as Prime Minister.

November saw Badenoch assume the reins of the party from Sunak as she became the first black leader of a major European party and the Conservatives’ fourth female leader. Positioned firmly on the right of the party, Badenoch’s overall analysis of the problems plaguing Britain in 2024 is that the “system is broken” and that the Conservatives must return to first principles when considering future policy. To that end, under Badenoch’s leadership, the party is set to launch a form of policy commissions to engage party members, councillors and MPs across the country as she shapes her policy platform. Businesses, too, will have a role to play in these consultations.

Overall, while she has been somewhat less vocal since assuming the leadership, Badenoch is widely judged to have made a decent start in her new role as Leader of the Opposition. And while there is no prospect of another leadership upheaval in the immediate future, the threat of a challenge from former rival Robert Jenrick in the medium term will be on Badenoch’s radar, as well as the possible threat of MP defections from the Conservatives to Nigel Farage’s Reform UK. On a more positive note, Badenoch’s team is encouraged by the unprecedented fall in support that the new Labour government has experienced. However, they are well aware that they will need to move mountains in order to regain the public’s trust and reunite the fracturing centre-right if they are to reverse such a heavy defeat by 2029.

After years of operating in survival mode since their 2015 decimation, the Liberal Democrats secured a remarkable revival in 2024 and, as a result, are once again a credible force in British politics. They now hold 72 seats in the House of Commons, the largest number in modern times for the third largest party.

Sir Ed Davey’s election strategy focused resources on a concentrated number of target seats in southern England in order to capitalise on anti-Conservative sentiments, an approach that paid dividends many times over. However, with their recovered size, the new cohort of Liberal Democrats in Westminster will need to work quickly to re-learn the muscle memory arguably lost post-2015 of speaking to a broader national policy agenda, rather than the single-issue campaigning normally associated with fringe parties. As part of that effort, an early Liberal Democrat victory in this new term came by securing the chair positions on the Health and Social Care, Petitions and Environment, Food and Rural Affairs committees. This alone will, in time, greatly aid the attempts of some of the party’s most senior figures to speak with significant credibility on some of their favoured policy topics in the Commons.

Davey’s personal experience as a carer has meant that health and social care has been, and will remain, a key priority for the party, and an area on which they feel confident they can pressure the government. In this regard, the 72-strong Liberal Democrat block is already making an impact on significant Commons votes, including on the Assisted Dying Bill. The party has also started to make more noise on other classic policy areas typically favoured by the Liberal Democrats, including pushing for electoral reform and calling for a youth mobility deal with the EU.  

There are, however, also challenges that come with such rapid growth over the course of a single election. Many of the party’s gains far exceeded its pre-election targets. As a result, there are many unknown quantities within the new MP cohort. The party and businesses alike in 2025 will need to be prepared for unpredictable moments as these MPs cut their teeth on a series of national policy issues for the first time. Despite this, a prevailing view is that the quality of much of the cohort is high. During a recent reshuffle of the party’s spokespeople, Davey clearly took the opportunity to promote potential rising stars.

Overall, the party’s successes this year have delivered a significant turnaround in its fortunes. However, with much of its growth based on the strength of public dissatisfaction with the Conservatives in 2024 – an effect likely to fade, at least to a degree, over time – and with many seats gained via wafer-thin electoral arithmetic, the question for the year and the parliamentary term ahead will be whether the Liberal Democrats have the necessary staying power for sustained and increased influence in the years ahead.

Scottish National Party (SNP)

2024 was a turbulent year for the SNP, marked by leadership changes and electoral losses. In April, First Minister Humza Yousaf resigned ahead of a no-confidence vote, following the collapse of the Bute House Agreement with the Scottish Greens. John Swinney succeeded him as SNP leader in May, appointing Kate Forbes as Deputy First Minister to help unify the party.

However, the SNP suffered a crushing defeat at the July general election, losing 37 Westminster seats, leaving them with only nine. A resurgent Scottish Labour capitalised on voter dissatisfaction, further weakening the SNP’s position. In response, the Swinney-Forbes administration launched a strategic reassessment, focusing on public service delivery, economic growth and abolishing the two-child benefit cap.

In December, the SNP introduced a politically strategic budget, reversing Winter Fuel Allowance cuts for pensioners not receiving pension credit and committing to end the two-child cap. These measures aimed to regain momentum and pressure Labour, which now faces a dilemma itself: support the Scottish Budget or risk voter backlash. As the SNP approaches the 2026 Holyrood election, its recent Budget offers a potential significant turning point. And by targeting policies with broad voter appeal and forcing Labour into challenging political terrain, the SNP is set to continue its efforts to rebuild trust and, crucially, its electoral prospects.

Reform UK

In 2024, Reform UK emerged as a significant force in British politics under the leadership of Nigel Farage, marked by notable electoral achievements and a surge in public support. At the July general election, the party secured five parliamentary seats and garnered approximately 14.3% of the popular vote, translating to over four million ballots cast in their favour and making a substantial mark on the political landscape, particularly affecting the Conservative Party’s voter base.

Despite these gains, Reform faced challenges, including controversies over alleged racist remarks by party supporters, which led to increased scrutiny and the suspension of certain candidates. However, the party’s ascent continues post-election, with opinion polls in December placing Reform (24%) ahead of Labour (23%) for the first time, with the Conservatives leading on 26%.

Plaid Cymru

In 2024, Plaid Cymru decisively ended its co-operation agreement with Welsh Labour, marking a strategic shift to reassert its independence ahead of the 2026 Senedd elections. The party’s bold approach coincided with electoral success at the general election, increasing its share of Westminster seats from three to four by reclaiming Ynys Môn and Caerfyrddin. Plaid Cymru capitalised on voter dissatisfaction with the previous government, which led to the Conservatives losing all their Welsh seats.

At its October conference, the party unveiled a vision for a “healthier and wealthier Wales” which, coupled with its sharpened opposition to Labour, saw Plaid Cymru lead Senedd voting intentions in December polls. Ending the co-operation deal appears to have galvanised Plaid, solidifying its challenge to Welsh Labour in May 2026.

Northern Ireland – Democratic Unionist Party (DUP) and Sinn Féin

In 2024, Northern Ireland’s political landscape underwent significant changes. In January, the DUP ended its two-year boycott of the Stormont Assembly, facilitating the restoration of devolved government. Subsequently, Sinn Féin’s Michelle O’Neill was appointed as Northern Ireland’s First Minister, marking the first time a nationalist held this position.

At the general election, Sinn Féin maintained its seven seats, solidifying its status as Northern Ireland’s largest party in Westminster. Conversely, the DUP experienced a decline, losing three of its eight seats, including the notable defeat of Ian Paisley Jr in North Antrim.

Green Party

The Green Party achieved unprecedented success at the general election, increasing its parliamentary representation from one to four seats and securing 6.7% of the national vote – its highest share to date. A landmark victory was co-leader Carla Denyer’s win in Bristol Central, where she unseated Labour’s Thangam Debbonaire and secured a majority of 10,000 votes, marking the first time a Green MP has represented the city.

More widely, the Greens made significant advances in both urban and rural areas, demonstrating their ability to build unusual electoral coalitions. They gained support in Conservative-leaning constituencies such as North Herefordshire and Waveney Valley, where they appealed to voters concerned about overdevelopment and urban sprawl. At the same time, their urban successes in places such as Bristol Central and Brighton Pavilion reflected voter dissatisfaction with Labour, particularly over issues such as Gaza.

All of this suggests the Greens are becoming a serious challenge to Labour in progressive urban areas and to the Conservatives in rural constituencies where environmental issues resonate.

The Labour government knows its single most important job is generating economic growth. Importantly, that growth has to be felt across the country, and the process for getting there has to bring on side business, workers, unions, the Labour backbenches and the bond markets. It is a major challenge but, if achieved, carries with it a major prize. To address this issue, Labour set out and campaigned on the concept of “securonomics” – a “new approach to economic management” focusing on a more assertive state that invests strategically, alongside the private sector, to boost the economy.

Importantly, Labour would argue that its securonomics stands in stark contrast to the Conservatives’ stewardship of the economy, which the government has not missed a chance to condemn. However, during the general election, Rishi Sunak was able to point legitimately to rapidly falling inflation, wages beginning to rise and the British economy standing as the fastest growing in the G7. For its part, Labour rebutted this by pointing to the lingering legacy of Liz Truss – especially relevant to the 1.5 million homeowners whose fixed rate mortgages expired in 2024 – and, after taking power, what they argued was the economic inheritance of a “£22 billion black hole”.

It now falls to the Chancellor of the Exchequer, Rachel Reeves, to do better. Her first task was to maintain financial stability while implementing a significant change in economic approach, especially around a Budget that set out the biggest real-terms tax rise since 1993, alongside an estimated £28-32 billion increase in borrowing and a £70 billion increase in spending. That has been achieved, with bonds remaining broadly steady – testament to serious behind-the-scenes work put in to persuade market makers of the merits of securonomics.

The more difficult task is to translate this into serious and sustained economic growth. At the autumn Budget in October, the Office for Budget Responsibility projected cautious real-terms GDP growth of 1.1% in 2024, 2.0% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029, noting the policies in the Budget risked crowding out private investment and reducing labour supply. In addition, the Bank of England’s Monetary Policy Committee estimated the Budget would increase inflation by 0.2 to 0.4 percentage points up to the end of 2027. More recently, data released in December by the Office for National Statistics showed the economy contracted by 0.1% in October 2024, while the Institute of Directors’ business confidence index fell to its lowest level since 2020 – and here the outlook is bleak at best.

The hope for Reeves is that private investment, boosted by wider government reforms, will have a transformative effect on these numbers. 2025 will be a critical year in delivering these changes and seeing what fruits they may bear.

In opposition, the Labour Party made a concerted effort to engage with the business community, compared by commentators to New Labour’s “prawn cocktail offensive” in the 1990s. Following a series of successful large-scale engagements, including a near-universally well received Business Day at the 2023 Labour Party Conference, the party was able to revive Labour’s business-friendly brand. Labour secured endorsements from some of Britain’s biggest firms and 121 high-profile business leaders ahead of the July general election. After the uncertainty generated by Brexit, the pandemic and instability in No 10, businesses craved certainty and stability, which Labour seemed well positioned to provide.

However, since the change of government, the relationship has become more difficult. While Labour’s “mission-led” strategy is underpinned by economic logic that relies on private growth and investment, businesses that had grown comfortable with Labour are now confronted with the reality that governing requires ministers to balance competing demands, and the needs of business are not always their top priority. While Labour continues to assert that it is pro-business, it is ultimately a democratic socialist party – and its priorities since taking office reflect this.

Nowhere was this clearer than in this year’s Autumn Budget, which saw a £25 billion annual increase in employer National Insurance Contributions. Very poorly received by the business community, the British Retail Consortium warned that job losses and higher prices would be “inevitable”, the Institute of Directors called the budget a “damaging hit” and the Confederation of British Industry suggested there is no “real plan for growth”. However, to raise spending and keep a balanced budget, Labour argued that it needed to raise taxes and that the party had only pledged not to raise taxes on “working people”. Accordingly, confronted with a choice between not delivering on its socialist principles and upsetting the private sector, Labour’s decision should not have come as a surprise.

No new free trade agreements (FTAs) were secured in 2024, with an expected change of government providing the backdrop for much of the year. The new government has, however, sought to make swift progress on trade, restarting negotiations with the Gulf Cooperation Council (GCC), South Korea and Switzerland, and welcoming the entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 15 December. The government has also committed to resuming negotiations on the India FTA in 2025.

International trade is set to be a major political issue in 2025, especially with the re-election of Donald Trump, who has pledged to introduce tariffs on all imports into the United States. While Trump, a noted Anglophile, may be willing to entertain a potential carve-out for Britain, his relationship with Labour has been unsteady – a situation potentially further complicated by the President-elect’s new closeness with Elon Musk, who is rumoured to be sceptical of Labour. Amid rising US protectionism, the government is also seeking a renegotiation of the UK-EU relationship, although it remains to be seen whether the EU is willing to embark on a third set of negotiations.

With Labour seeking to position itself as the party of business in the run-up to the July general election, the party’s historic support for workers has experienced a narrative shift. The Prime Minister and Chancellor’s core focus is on ensuring economic growth that benefits both industry and its workforce. However, with the asks of both groups often at odds, the government continues to balance the tightrope between being pro-worker and pro-business with varying success.

Attempting to consolidate its support for workers, the government published the Employment Rights Bill in October 2024. Gaining the reins of government with the pledge to deliver the “biggest overhaul of workers’ rights in a generation” and “make work pay”, the much-anticipated proposed legislation seeks to expand day-one rights, end “fire and rehire” practices and ban “exploitative” zero-hours contracts. The legislation will alter the business landscape for employers and workers alike, and both groups have offered criticism that the proposed bill does not go far enough. Workers have pointed to the omission of the floated “right to switch off”, while SMEs have argued that the increase in red tape will prove too high an administrative and financial burden, which only adds to business’ wider concerns following the Autumn Budget.

Throughout 2024, the public has experienced increasing frustrations over strike action. Despite this, the government has sought to extend the olive branch to a number of these highly influential groups, including the Trade Union Congress, Unite and the RMT. In September 2024, as the first Prime Minister to address the Trade Union Congress in 15 years, Starmer stated that the government would work with both businesses and unions to “rewire” the British economy. He also pledged to repeal the Strikes (Minimum Service Levels) Act 2023, introduced by the previous Conservative government, which requires certain striking workers to provide a minimum level of service.

Weeks into the job, the new Secretary of State for Health and Social Care, Wes Streeting, negotiated with junior doctors in England and ended the 20-month row over pay and conditions. Furthermore, in July 2024, the government chose to accept the independent public sector pay review bodies’ recommendations of 4.75% to 6% increase in pay for staff across the public sector. This accounts for more than 40% of “government overspending”, which the Chancellor, Rachel Reeves, has argued left a “black hole” of £22 billion. Despite resolving these strikes, the public has voiced dissent over the settlements, with the pay awards undoubtedly contributing to an acute strain on public finances.

In November, the Chancellor of the Exchequer, Rachel Reeves, addressed a room full of City leaders at Mansion House and said regulatory changes since 2008 had “gone too far and, in places … have had unintended consequences”. It marked a change from Reeves’ more critical views of the financial services sector as a backbench Labour MP, and illustrated the shift undertaken by her and her party towards a more conciliatory approach to the City.

This was outlined at the beginning of the year when Reeves and Tulip Siddiq, now City Minister, published Financing Growth, setting out the government-in-waiting’s plan to put financial services at the heart of boosting GDP. The proposals were warmly received by the Square Mile – TheCityUK described it as a “forward-thinking plan … with a clear focus on innovation, modernising the regulatory landscape” – and confirmed the success of the so-called “smoked salmon offensive” of wooing industry leaders in the run-up to the election.

CEOs in the City were relaxed about an incoming Chancellor with experience in their sector, who had favourable views towards it and whose financial services policies broadly aligned with those of the previous Conservative government. This was seen most clearly in November’s Mansion House speech, many aspects of which could easily have been delivered by Reeves’ predecessor, Jeremy Hunt. Indeed, the new Chancellor built on Hunt’s pension reforms, launched at his own Mansion House speech in 2023, by announcing new legislation on developing “megafunds”, amalgamating 86 local government pension schemes. On ESG, she also followed the path set by the previous government and outlined next steps for a green taxonomy. She also set out new guidance for financial regulators to focus on growth – which the FCA welcomed – and announced the forthcoming Financial Services Growth and Competitiveness Strategy in spring 2025 to support her objective of the sector playing a leading role in economic growth.

In December, Reeves became the first Chancellor since 2016 to attend a Eurogroup meeting of EU finance ministers. She urged her counterparts to give the City greater access to the bloc, noting that Britain has “deep global capital markets that can fund the growth that economies across the continent need”. In January, she will head to Beijing for the UK-China Economic and Financial Dialogue, a meeting not held since July 2019.

Despite controversy over Budget measures in other areas of the economy, Reeves has finished the year with a constructive relationship with the financial services sector, which is on board with her reforms. After three Chancellors and three City Ministers in the two years leading to the general election, the City will be hoping Reeves and Siddiq are in post long enough to see their reforms through.

The Labour government has made the use of technology a fundamental lever for achieving its missions. The Prime Minister’s recent Plan for Change speech described artificial intelligence as an “unprecedented opportunity for this country”. However, despite this positive rhetoric, Labour’s first few months in power have delivered few concrete announcements. Instead, they have focused on reviews and internal reform to turn the Department for Science, Innovation and Technology (DSIT) into the “digital centre of government” and encouraging cross-Whitehall digitalisation.

The previous Conservative government laid the foundations for Labour’s tech ambitions. While Sunak’s focus on AI safety has taken a back seat, the new government is expected to build on the AI White Paper response published in February 2024, as well as proceeding with efforts to make the Bletchley Park and Seoul Agreements legally binding. The government has confirmed it will be introducing AI legislation in 2025 to regulate the most powerful AI models. A consultation on the measures is expected before legislation is introduced in this parliamentary session. Ahead of this, in December, the government published a consultation on copyright and AI, which attempts to find a compromise that protects intellectual property while supporting AI innovation. The Secretary of State for Science, Innovation and Technology, Peter Kyle, has also commissioned Matt Clifford to conduct an AI Opportunities Action Plan review to set out a roadmap for the government to capture the opportunities of AI. This is expected to be launched in 2025 with recommendations on issues such as AI infrastructure and copyright.

More broadly on the legislative front, the Digital Markets, Competition and Consumers Act 2024 became law before the parliamentary wash-up. The Competition and Markets Authority is expected to begin its first Strategic Market Status investigations in 2025. While the Data Protection and Digital Information Bill, which aimed to reform Britain’s data protection legislation, failed to pass before the election, it has largely returned as the Data (Use and Access) Bill, which is undergoing scrutiny in the Lords. Alongside the AI consultation, we can expect the government to introduce the Cyber Security and Resilience Bill in 2025 to strengthen Britain’s cross-sectoral cyber security legislation to better protect the British economy and infrastructure.

The Secretary of State has been clear that DSIT has focused on laying the groundwork since the election, before shifting to delivery next year. Even with an up-to-date legislative framework and progressive regulation in place, making progress on the government’s technology ambitions will be challenging in an internationally competitive environment. As with so many other policy areas, the government must attempt to balance its long-term growth objectives for the sector, demonstrated in the Budget’s £20.4 billion for research and development, against immediate fiscal demands, manifest in increases to employer National Insurance, which may hurt Britain’s appeal for tech start-ups.

The new Labour government is in a hurry to make Britain a “clean energy superpower” and to leverage the green transition to stimulate economic growth. This contrasts with the more proportionate approach taken towards net zero by the previous Conservative government. Labour is committed to delivering “95% of low carbon generation by 2030”, which necessitates an increased pace of regulatory and policy activity to ensure delivery. However, it will be important for the new Secretary of State for Energy Security and Net Zero, Ed Miliband, to guarantee the interests of energy consumers who, bruised from price spikes in recent years, face potential further cost hikes from the decarbonisation of heating, power and every other corner of the British economy.

The lifting of the ban on onshore wind in England and the creation of a new “Mission Control for Clean Power 2030” in July were early markers of ambition, as was the later creation of a new National Energy System Operator (NESO), which now oversees the central planning and design of Britain’s electricity and gas networks. The Department for Energy Security and Net Zero (DESNZ) has issued its detailed Clean Power 2030 Action Plan, while NESO has also been asked to produce Britain’s first ever strategic spatial plan for energy to help plan the grid infrastructure that Britain needs to cut connection waiting times and decarbonise the grid.

As a centrepiece, Labour is working to establish “Great British Energy” (GB Energy), a publicly owned energy company. The government argues that GB Energy will work alongside the National Wealth Fund to “crowd in business investment”, lower bills, increase energy security and deliver energy development projects. It is still unclear, however, how this new body will work or how it will achieve these outcomes in reality, given its current positioning as a one-stop shop for delivering on all of Labour’s energy priorities. It seems doubtful, no matter how well conceived, that a single organisation will be able to do it all – and the opposition views this as a particularly vulnerable area on which to scrutinise the government closely in 2025.

Meanwhile, Labour is continuing pressure to reduce the use of fossil fuels. The new government has frozen the issuing of new North Sea oil and gas licenses, increased the Energy Profits Levy to 38% and committed to legislation to ban licenses for new coal mines. However, facing the same pressures from voters weary of cost-of-living increases as their predecessors, ministers will need to tread carefully to ensure that net zero is delivered at pace while ensuring they don’t phase out fossil fuels so fast that it damages energy security and compromises jobs and bills. In 2025, expect this space to be highly politically contested over the varying level of assumptions made by different corners of the political debate regarding the steps needed to reach the 2030 target and by what magnitude the cost of energy may go up for voters in order to get there.

In the final months of Rishi Sunak’s government, rising immigration levels became the defining issue on which he staked his remaining political capital. Determined to address the issue, Sunak pinned his hopes on launching the controversial Rwanda scheme as a cornerstone of his immigration strategy to stop small boats crossing the English Channel. However, the supposed hallmark feature of both the Johnson and Sunak governments never materialised into the success for which they hoped. Indeed, the shortcomings of the policy epitomised Sunak’s premiership – a leader whose rhetoric often outpaced his government’s ability to deliver tangible results. Indeed, Sunak is likely to be remembered as the Prime Minister who, despite relentless efforts to centre immigration as a pivotal election issue, ultimately failed to achieve a meaningful reduction in numbers as net migration increased from 764,000 in 2022 to 782,000 in 2023. 

Post-election, Labour has taken a distinctly different approach to domestic issues from the Conservatives, with immigration no longer positioned as a flagship priority. The party’s manifesto dedicated only a brief section to the topic, proposing a “points-based immigration system” aimed at ensuring fairness and proper management, as well as a pledge to scrap the Rwanda scheme. In contrast, Labour has placed greater emphasis on law and order, pledging to increase neighbourhood policing, provide an additional £100 million to fund police recruitment, implement a knife crime action plan and intensify efforts to tackle violence against women and girls as part of the Safer Streets programme.

While there have been a number of notable Labour announcements on domestic issues, including the banning of so-called “zombie knives” and the introduction of Martyn’s Law, the Home Office has failed to set out a clear strategy for tackling some of Britain’s most prevalent domestic issues, such as tackling extremist ideology. These policies are being rolled out before a public that seems sceptical of the government’s law and order policies. For the first time since October 2023, a recent YouGov tracker shows the public now views the Conservatives as better equipped to handle this issue than Labour. The recent early release of prisoners could be a contributing factor to this polling, with Labour hoping that the completion of the Sentencing Review will provide a resolution to the prisons crisis for which the blame, they argue, lies squarely at the door of the Conservatives.

The 2024 summer riots highlighted how easily tragic incidents can be combined with misinformation and existing community tensions to trigger violent conflict. Immigration – cited as the top public concern in the September 2024 Ipsos Issues Index, surpassing the NHS and the economy – remains a significant source of potential political difficulty for the new government. Indeed, if it remains at the forefront of public concerns, Labour risks developing a political vulnerability that may potentially undermine the party’s broader home affairs agenda.

In what was a perfect opportunity to signal a new era in relations with Europe, the Prime Minister, Keir Starmer, chaired the biannual gathering of the European Political Community (EPC) two weeks after the July general election and tasked his new Foreign Secretary, David Lammy, with a series of visits to European capitals. Bilateral relationships, in their view, are the key stepping stone to improving Britain’s relationship with the EU, a core tenet of Labour’s foreign policy agenda.

Much has been made of the government’s planned UK-EU “security pact”, on which a wider review of the relationship is predicated. The reported expansion to include issues such as free movement of students and climate change makes clear that the government sees this pact as the start of a wider reappraisal of Britain’s relationship with the EU. Yet how much appetite there is in Brussels to reopen old wounds is unclear, with the surge of populism across the EU and the painful process of appointing a new Commission serving to deprioritise the UK-EU relationship in Brussels.

The impending prospect of a Trump presidency – though not unexpected – presents challenges for the new Labour government. Historical comments from senior ministers, including the Foreign Secretary, alongside backlash following Labour activists’ support for the US Democrats in key swing states, are likely to add an uncomfortable personal element to the relationship.   

Aside from this, there are also policy differences, particularly over Ukraine, where Trump takes a stance that is much more sceptical of support than Britain’s position on the matter. Trump’s administration is also likely to take issue with the British government’s position on the International Criminal Court’s arrest warrant for Israeli Prime Minister Benjamin Netanyahu and the decision to cede sovereignty of the Chagos Islands – a key US strategic outpost – to the Beijing-aligned Mauritius while simultaneously pursuing closer relations with China. Given the hawkish stance the Trump administration is set to take on China, Britain runs the risk of falling out of step with the United States on one of the main foreign policy issues facing the world. Should the United States use its economic might to try and pull allies away from China, it is possible that Britain may be forced to take a different path.

The new Labour government has framed many of its decisions in office in the context of the inheritance it received from the previous Conservative government. In the context of defence, however, the government is facing an inheritance created by every government, Labour and Conservative, since the Cold War. This reality, alongside the complexities associated with defence procurement, means that the Secretary of State for Defence, John Healey, is under pressure to create immediate solutions to a generational problem that has been decades in the making.

The government has sought to create the time to assess the situation fully and establish a plan to put Britain’s defence on a surer footing. The Strategic Defence Review (SDR), due in Spring 2025, will attempt to address this and set out a path for spending 2.5% of GDP on defence. This is expected to be accompanied by the Defence Industrial Strategy.

However, in the context of tight public finances, a Chancellor willing to make controversial decisions and the allocation of a relatively modest £2.9 billion for the Ministry of Defence (MoD) in October, there is a general recognition that the SDR may not contain the generous spending settlement for which many in the defence space hope. Meanwhile, the MoD is committed to supporting Ukraine with £3 billion per year, alongside facing a black hole in its budget estimated at £17 billion. Separately, the majority of the £2.9 billion announced by the Chancellor has been earmarked for personnel pay.

The decision in November to cut a number of capabilities in order to save £500 million over five years has proven controversial. While likely intended to attempt to seize the initiative and create space for funding elsewhere at the SDR, it has increased uncertainty within the defence community, and among allies, about what else could be cut next year. Indeed, in the context of an impending Trump administration, and the President-elect’s more sceptical attitude towards Ukraine and his transactional approach to Nato with regards to defence spending, the decision has the potential to create further disagreement with the United States.

In the field of defence, the government has begun following through on its commitment to improve relations with European partners. The Trinity House Agreement with Germany and commitment to reinvigorate the Lancaster House Treaty with France are welcome initiatives aimed at “Trump-proofing” the Nato alliance. However, the continued exclusion of Britain from EU defence programmes risks putting a break on this process. Questions also remain over the government’s commitment to the Global Combat Air Programme (GCAP) and, given rising tensions in the Indo-Pacific, whether AUKUS – the multi-decade joint nuclear submarine project with Australia and the US – is at all prudent. 

While there is a recognition that defence will have to make the most with what it has got in future, the MoD’s main objective will be to ensure that its pot does not get any smaller.

Britain’s healthcare and life sciences sectors are at a critical juncture, shaped by significant political developments and evolving policy priorities. Central to this transformation is the anticipated publication of the NHS 10-Year Health Plan, expected in late spring. This strategy aims to establish a sustainable framework for the NHS by prioritising improved patient outcomes, enhanced efficiency and integration of digital and technological innovations. Its release follows a record level of NHS funding – excluding Covid-related allocations – announced in the 2024 Autumn Budget. While this underscores the government’s commitment to tackling persistent challenges, it may fall short of meeting its ambitions for meaningful reform.

In government, Labour has consistently highlighted the NHS’ vital role in delivering economic prosperity, a perspective reflected in the recent funding boost. However, critical questions remain about how resources will deliver measurable improvements amid concerns about productivity, waiting times, workforce retention and social care integration. The forthcoming NHS plan is expected to address these issues, drawing from Lord Darzi’s post-election review, which described the health system as being in “critical condition” and stressed the need for structural reforms to meet changing demographics and healthcare demands. While the government has also pledged to reform adult social care, beginning with a national pay agreement, it has yet to outline a comprehensive agenda.

In parallel, Britain’s life sciences sector remains a cornerstone of driving reform and innovation within the health system. The industry forms a major part of the government’s Industrial Strategy, with a new sector deal slated for 2025 aiming to bolster its global competitiveness. This initiative is expected to build on existing strengths in research and development, innovation and manufacturing, while supporting public-private collaboration and attracting investment. Key areas of focus include advancements in genomics, artificial intelligence in drug discovery and the expansion of clinical trials.

The broader policy landscape is being shaped by cross-sectoral challenges, such as maintaining regulatory alignment with international standards. This task is particularly relevant as the Medicines and Healthcare products Regulatory Agency (MHRA) transitions leadership following the impending departure of its Chief Executive, Dame June Raine, alongside looming updates to the Medical Devices Regulations in 2025. Ensuring that Britain’s health and life sciences regulations continue to encourage innovation while safeguarding patient safety presents a delicate balancing act for the new government and Whitehall.

Overall, 2024 marked a pivotal year for the healthcare and life sciences sectors, characterised by ambitious plans and significant investments. The success of these initiatives will depend on effective implementation and sustained political will to ensure the sectors receive the support they need to thrive.

Housing and planning have been central tenants in the new government’s growth mission since it took office in July. The Prime Minister, Keir Starmer, and the Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, Angela Rayner, made these issues cornerstones of their key speeches during the general election. These reiterated the commitments made in Labour’s manifesto, including a pledge to build 1.5 million new homes, unlock development on the green belt and reform the planning system.

One of the first major actions taken by the Labour government was reforming the National Planning Policy Framework (NPPF). In its first month, the government opened a consultation on the framework, pledging to “unlock the system and bulldoze through opposition to new homes“. The changes published in December will see land on the green belt which has been previously developed or is otherwise determined to be “low-quality” earmarked for development.

More broadly, Rayner has made no qualms in approving controversial planning applications, starting with her decision within days of taking office to call in rejected planning applications to build data centres in Hertfordshire and Buckinghamshire. Over the course of five months, Rayner has continued to make interventions, recently overturning her predecessor Michael Gove’s decision to reject M&S’ high-profile planning application to redevelop its flagship Marble Arch store on London’s Oxford Street. Rayner has also shown that she is willing to take on Labour-led councils, recently overruling Newham Council’s decision to refuse London City Airport’s expansion plan. These serve as key indicators of the government’s determination to prioritise national economic growth over local concerns. Notably, the built environment sector has seen significant interest in building data centres in Britain. Indeed, the government’s International Investment Summit saw £6.3 billion of global investment pledges into British data centres. The high demand for this capability, combined with the government’s insistence to digitalise more public services, will no doubt see interest in building more of these centres continue in 2025.

In December, the government also published its English Devolution White Paper, proposing a new “devolution architecture”. This includes an integrated settlement for mayoral authorities, which will provide them with increased powers over transport, skills, housing and planning, health and public safety, among other areas. Additionally, the New Towns Taskforce and announcement of 150 major infrastructure projects all feed into the government’s overall long-term growth strategy.

With the Planning and Infrastructure Bill expected to be tabled before the spring – which will likely oversee the biggest overhaul of the planning system in a generation – housing and planning will continue to represent a key vehicle through which the government hopes to deliver the sustained economic growth Britain needs.

Political catnip for Labour in opposition, the opportunity to put transport – and specifically rail renationalisation – at the heart of public policy was always going to be early out of the blocks. For a government accused of a stuttering start to life in Whitehall, the Department for Transport is where critics might best be pointed. No fewer than five transport bills made it into Labour’s first King’s Speech, the most of any one policy area.

Rail renationalisation provides Labour with the opportunity to scratch a socialist itch that has few realistic hopes of being sated elsewhere under Keir Starmer. Overwhelmingly popular with the public and – due to the franchised construct of train operations – comparatively easy to achieve, the government announced in November that Southern Western Railway would be the first to re-enter public ownership on its watch. That it joins a stable of publicly-owned operators, including LNER, TransPennine Express, Northern and Southeastern, was always indicative. The difference is that, rather than a means of last resort, this is now the government’s overt ambition.

Of course, public opinion has long been convinced that Britain’s railways function on a toxic mix of overcrowded trains, unreliable services and exorbitant prices. Public or private, these issues are all symptomatic of chronic underinvestment. Without funding and leadership, reversing decades of decline will remain insurmountable. That will be the challenge for Great British Railways – Labour’s rebooted and reimagined vision for a unified industry, “motivated and incentivised to deliver for the passenger”. First articulated by Conservative Secretary of State for Transport Grant Shapps, evidential success before the next general election will be an enduring priority for this government. But one thing that won’t re-materialise is the northern leg of HS2, meaning Labour inherits the political white elephant of a truncated route extending only from London to Birmingham.

On the road, the government has been quick to evidence its plans to integrate local services, with the aim of persuading an ever-greater transition of journeys from private car to public transport. In November, it launched the Integrated National Transport Strategy for England, setting out its vision for a “people first” approach that provides more “seamless” door-to-door journeys. Alongside this, the Better Buses Bill will remove the ban on publicly-owned bus operators, allowing metro mayors and local authorities to rival private sector operators with a view to improved services. Nevertheless, the Chancellor’s decision in the Budget to raise the national bus fare cap from £2 to £3 from January saw accusations levelled of double standards.

In the air, the breadth and scale of the challenges facing the aviation sector – from the need to modernise Britain’s airspace, to the decarbonisation of air travel and the ever pressing need to invest in infrastructure expansion – all feels further behind in Labour’s planning cycle. The welcome announcement in October that the government intends to move forward with a programme of airspace modernisation is an indicator of aviation moving up the agenda in 2025. It will need to.

It won’t, of course, be the now former Secretary of State for Transport, Louise Haigh, delivering on these plans, which she had only recently set out. But her successor, Heidi Alexander, the one-time Deputy Mayor of London responsible for transport, has certainly inherited a very busy in-tray.

In December, the Prime Minister pledged to increase the number of school-ready children from two-thirds to three-quarters by the end of this parliament, marking a key milestone in Labour’s ambitious “Plan for Change.” While the target has been widely welcomed, experts warn that meeting the goal will require substantial reforms and investment. Indeed, the strain on England’s education system has been clear this year, from early years to higher education. And while the Labour government has demonstrated enthusiasm for reform, aligning funding with ambition in an era of tight fiscal constraints will be a challenge.

In higher education, England’s universities are feeling the pinch, with nearly three in four expected to be in the red next year. To address this, the new Secretary of State for Education, Bridget Phillipson, announced a £285 increase in annual tuition fees to £9,535 next year, the first rise in eight years. While university chancellors have welcomed this as a partial offset against inflationary pressures, they have argued it does not provide a long-term, sustainable solution to the sector’s financial difficulties.

For schools, the government attempted to address teacher shortages with the agreement of a 5.5% pay-rise for teachers in England. However, unions have warned that without further “corrections”, pay would remain uncompetitive and teacher shortages would persist, undermining the government’s efforts to improve educational outcomes and spread opportunities. Adding to school pressures, the Chancellor’s Autumn Budget confirmed the long-trailed introduction of a 20% VAT charge on independent schools from January 2025. While the policy is projected to raise £460 million annually, it is also expected to shift approximately 35,000 pupils to the public sector, adding further strain to an already overstretched system.

Looking to 2025, the spotlight will shift to Britain’s growing skills gap, a critical prerequisite for delivering the government’s Industrial Strategy. The government has already made an early attempt to tackle this through the establishment of Skills England, a new arms-length body designed to meet the skills needs of the next decade, as well as through an overhaul of the Conservatives’ Apprenticeship Levy. However, despite these changes, critics argue that the current skills system is complex and lacks strategic direction.

Labour’s ambitious targets hinge on bold action and substantial funding commitments. The upcoming Spending Review will be pivotal in determining whether the government can deliver on its mission to break down barriers to opportunity and raise educational standards.

Unsurprisingly, culture, media and sport took a back seat in the run-up to the July general election. While both major parties were agreed on the need for the Football Governance Bill, which would introduce a new regulator for the sport, manifesto commitments in an election dominated by the economy, NHS and immigration were understandably light. Labour did, however, include commitments on gambling reform, ticketing, a creative industries sector plan as part of the Industrial Strategy and a greater focus on creative arts in education.

In July, Lisa Nandy took charge as the Secretary of State for Culture, Media and Sport. Thangam Debbonaire, Labour’s lead on the brief in opposition, had been one of Labour’s few election losses. As such, Starmer chose Nandy, a seasoned politician having held shadow roles in energy and foreign affairs, to take the position. She inherited several contentious issues in her in-tray, including the drawn-out debate between AI developers and the creative industries regarding copyright laws in AI training, as well as battling for more funding amid budgetary restraints.

Despite efforts by the Intellectual Property Office to mediate a voluntary code of practice regarding copyright laws, it was announced in February 2024 that no consensus had been reached, which left it to government departments to find a solution. Legal disputes, such as the high-profile case between Getty Images and Stability AI, have underscored the urgent need for government intervention to clarify copyright applications in the age of AI. In December, the government began work on this by publishing a consultation that seeks to find a compromise which both protects intellectual property and supports AI innovation.

The government has also started to push through its manifesto commitments. The Football Governance Bill is making its way through Parliament, while the online ticket resale market is set for transformation. Sir Chris Bryant, Minister for Creative Industries, Arts and Tourism, has signalled imminent changes aimed at curtailing the significant mark-ups on platforms such as Gigsberg, Viagogo, StubHub and Ticketmaster. Plans for gambling reform, meanwhile, remain to be detailed.

With funding challenges set to continue, in order for Nandy to retain the support of these sectors, a lot will depend on the government’s Industrial Strategy and its plan for the creative industries, as well as delivering on its commitments on creative arts in education.