Britain’s new leader, Keir Starmer, knows his crushing election win was driven as much by public disenchantment with 14 years of Conservative rule as enthusiasm for Labour. So his aides say his first months in office will be packed with tangible actions designed to win over a skeptical electorate.
That’s no easy task, given the complexity of the challenges — from crumbling public services to weak private investment — and budget constraints that mean Starmer can’t simply throw money at every problem. His incoming Chancellor of the Exchequer, Rachel Reeves has spoken of “the most difficult inheritance” since World War Two.
“We sought a mandate at this election to grow the economy, and that is what we’re going to get started on doing,” Reeves said on Sky TV in the early hours of Friday morning. “Reform of our planning system is clearly essential to build the housing we need, the transport infrastructure, the energy infrastructure.”
Starmer and Reeves will prioritize measures to stimulate economic growth at home while seeking to establish himself as a statesman abroad. Here’s what they’ve got planned, according to people in his entourage who spoke to Bloomberg on the condition of anonymity.
Diplomatic push
Starmer wants to take a leading international role in defense, security and climate, and to champion liberal democracy in the face of an increasingly assertive China and Russia and electoral breakthroughs by far-right parties in several Western democracies. He’ll meet fellow world leaders including Ukrainian President Volodymyr Zelenskiy five days after the election at a summit of the North Atlantic Treaty Organization in Washington. Incoming foreign affairs chief David Lammy and defense secretary John Healey were in talks to visit Ukraine in the coming month.
The government will host a European Political Community meeting in Oxfordshire on July 18, an early opportunity for Starmer to “speed date” European leaders in the hope of closer defense cooperation with the European Union and an improved Brexit deal. Labour staff see this as a moment to reset the relationship with Europe and project the message that Britain won’t flout international law, as former premier Boris Johnson threatened to during Brexit.
Finance chief Reeves gets her turn on the world stage at a Group of 20 meeting of finance ministers on July 25.
Priorities
Economy
Britain has had the lowest rates of investment of the Group of Seven advanced economies for 24 of the past 30 years. Successive governments pledged to tackle this by expanding public investment and providing research and development tax credits, but the dial has barely moved.
The problem is most acute when it comes to private sector investment, where the UK sits 28th out of 31 member countries of the Organisation for Economic Cooperation and Development as a share of national output. The Tory government in 2023 introduced 100% tax relief on capital investment.
Labour has promised to keep this and says it won’t raise corporation tax. It’s hoping to see billions of pounds of business investment unlocked within weeks of being elected via a national wealth fund. Reeves plans to hold an investment summit with business leaders within the first 100 days of the new government.
Boosting growth is seen as vital, as otherwise the government won’t be able to raise the kind of tax revenue needed to make more significant improvements to decaying public services.
Cost-of-living crisis
Starmer’s predecessor, Rishi Sunak, declared “we’ve got there” after inflation returned to the 2% target for the first time in almost three years in June. But living standards for the average Briton remain below where they were at the time of the last election in 2019 — the effect of inflation outpacing wages for almost two years. Poverty rates after housing costs surged to about 20% and the UK is a word leader in homelessness.
Angela Rayner, incoming deputy prime minister and housing secretary, is preparing a blitz of planning reforms within weeks to boost housebuilding and an ending homelessness unit to address the problem from the center of government. She will begin to deliver her package of workers’ rights reforms immediately, by writing to the low pay commission to change its remit to consider inflation and the cost of living when setting the national minimum wage.
Climate
Renewable energy projects have been stuck in a growing queue due to a complex planning approval process and local opposition, holding back the transition to green power. Rayner’s planning reforms will include measures to accelerate the construction of clean energy infrastructure. Ed Miliband, the incoming energy secretary, is expected to end a ban on onshore wind in an oral statement within weeks, if not days, of entering government. GB Energy, a new publicly-owned investment vehicle, detailed below, will also attract private funding for energy infrastructure projects.
Health
A combination of Covid-related postponements, chronic workforce shortages and increasing pressure on services have led to record treatment delays in the National Health Service. The waiting list has risen since Sunak made lowering it one of his top-five priorities. It stands at 7.57 million cases, consisting of approximately 6.33 million individual patients waiting for treatment, as of April 2024. That’s equivalent to almost 10% of the country’s population.
Incoming Health Secretary Wes Streeting said he’ll be in touch with doctors trade union the BMA on day one of a Labour government to try to end a strike by junior doctors, which has contributed to the backlog. Labour has said it will use more weekend and evening services to create 40,000 extra appointments a week, along with other measures such as expanding staff provision and using capacity from the private health sector.
Prisons
Jails in England and Wales will be at an “operational breaking point” within days of the general election result, the president of the Prison Governors’ Association has warned, leaving Labour with a quick decision to make on options to prevent a situation where the entire prison system reaches capacity, as it was at risk of doing throughout the election campaign. A failure by successive governments to build prisons or invest in the crumbling prison estate, along with the increasing number of prisoners, means that the Conservative government had been releasing some prisoners early to free capacity.
On their first day in government Labour will receive the full picture of when the prison estate could overflow and the options available. The party is likely to continue the early prisoner release program, with tweaks, as well as looking into options that create capacity such as moving people around the prison estate or building short-term extra spaces.
Other challenges
Starmer’s team has plenty of other challenges to tackle, including local government bankruptcies, rising immigration, stretched university finances, sewage-clogged rivers and disputes over public sector pay. Starmer may also need to face down heavy pressure in the party rank and file for a more assertive stance toward Israel over its military campaign in Gaza.
Legislative Blitz
Starmer’s chief of staff Sue Gray has 20 bills to introduce within the new government’s first 100 days. The King’s Speech, introducing the new legislative agenda, is due to be held on July 17.
- Top priority is an employment rights bill to deliver Rayner’s promised reforms to workers’ rights, a large package of reforms including measures to ban “exploitative zero hour contracts” and to improve worker rights from the first day of employment, as well as strengthening trade union powers. The government will consult business on the bill while it passes through Parliament.
- A renters’ bill already introduced under the Conservatives will be brought back under Labour to end so-called “no fault evictions” of tenants by their landlords.
- A publicly-owned energy company, GB Energy, will be established by legislation as quickly as possible so that it can strike deals with the private sector.
- A crime and policing bill will deliver on Labour pledges to increase neighborhood policing and crack down on anti-social behavior, including tougher sentences for assaults on shop workers.
- A border security bill will introduce legislation to give the new Border Security Command counter-terror powers to crack down on illegal smuggling gangs at source, in a pivot from the previous government’s efforts to stop illegal immigration. Labour doesn’t plan to repeal the Tories’ migrant deportation bill — it will simply not enforce the treaty they negotiated to send migrants to Rwanda.
- Further bills to be enshrined into law include the requirement for an independent assessment of state finances from the Office for Budget Responsibility alongside every fiscal event, bringing rail franchises into public ownership when contracts end, the progressive ban on smoking proposed by Starmer’s predecessor Sunak, a reform of the Mental Health Act and a ban on “conversion therapy,” which seeks to cause a non-heterosexual person to become heterosexual.
The budget
This is Starmer and Reeves’ first chance to establish themselves as reliable stewards of state finances. If bond investors are impressed and price in a more benign fiscal outlook, that could eventually lower borrowing costs for households and businesses that spiked under Starmer’s predecessors and earn him some credit with the electorate.
Labour has committed to publishing an OBR assessment with all future fiscal events, which takes 10 weeks, making Sept. 11 the earliest likely date for Reeves to present her spending plans to Parliament. Discussions are still taking place within Labour about whether September or October would be a better time for the budget.
Either way, the timing of the budget means Labour’s plan to end a value-added tax break on private schools won’t come into effect until the 2025-26 academic year.
