The Best Way Out, Is Always Through

This essay is part of our New Year's series on what to expect in 2025, and can be downloaded as one compiled PDF for you to read at your leisure via the download form. Thank you

By Simon Jackson, Partner at 5654 & Company

Before the election, Keir Starmer told an interviewer that he didn’t have a favourite poem. The image he portrays is of a man who lets his work do the talking. Seriousness and public service – those are the watchwords for a Prime Minister who entered Downing Street warning that fixing the country would be hard. But as he and his Government contemplate 2025, they could do worse than letting a bit of poetry in.

Because 2025 is not shaping up to be a year of ease or popularity. It may seem odd to be forecasting a tough time for a Prime Minister who only recently delivered Labour a huge, historically unprecedented electoral victory, but Starmer’s entry into office was met with quiet satisfaction rather than cheers and fanfare and there’s little on the horizon to suggest that will change much next year.

Given the Government’s bulging, tricky in-tray, and a set of economic circumstances which give them limited room for manoeuvre, it’s likely to be a year of hard work for Starmer and team.

What to expect? First, the economy will remain centre stage. Delivering growth is paramount – Labour themselves have set that bar – but the levers available to achieve it are limited and stubborn.

That’s why the much-anticipated Industrial Strategy has a lot riding on it and why government will be looking for other supply side measures through the year: regulatory reform, delivering on the promise of a planning shake-up and skills policy will all be on the agenda.

None will deliver immediate results though, which is why the economic messaging is likely to remain on the pessimistic side. Expect more talk about ‘tough decisions’ and fixing the foundations. This is not just rhetoric: the Spending Review will be tough. Yes, the recent Budget has injected considerable (Labour would say much needed) money into government coffers - primarily for the NHS and education - but beyond that there’s the prospect of a very difficult spending round to come, potentially with real terms cuts for some departments. The multi-billion-pound question is whether the Chancellor can deliver without hindering Labour’s aspirations for growth and public service reform.

On public services, it will be a year when the electorate will expect promises to start to bear fruit. Labour promised to fix an ailing NHS and improve schools, pre- and higher- education – a huge task lies ahead.

The extra money in the Budget should make some difference, for instance bringing down NHS waiting lists, but many of the problems identified take years rather than months to address.

How much grace the electorate gives the Government remains to be seen, but don’t be surprised if the media – ever keen to move the political story on – finds a willing audience for stories of ‘Labour troubles’ and a need to ‘focus on the day job’. PM Starmer has already experienced some of this in response to the global travel he’s undertaken in his early months. But as every PM discovers, foreign affairs is a huge part of the job and next year will be no different. Suggestions that Donald Trump’s arrival in the White House will be difficult for Labour are often overblown, but there is a big strategic choice facing the Government now: how to position the UK internationally when, politically, moving closer to the EU is difficult and when the US is, once again, turning inward.

Labour has little option but to focus on the hard slog of government. Tough choices, reform and getting things done will be the watchwords. It won’t be easy; few at the top of government expect much thanks at this stage, but they hope it will pay off in the long run.

Given the outlook, Starmer may find himself hankering for a little more poetry in the year ahead. Yes, it will be a year to look at the foundations, but if they want to avoid some of the pressure that comes with it, Labour would do well to think a little more about the story they’re telling the electorate if they want them to come with them on the journey.