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If 2024 was the year the British people delivered a scathing verdict on the way the country was run, 2025 is the year British politicians try to work out what to do about it.
Despite his promise of meaningful change in the first 100 days of his administration, Keir Starmer has been slower to act than many in his party and across Whitehall would have liked. Instead the cautious start to his premiership seems to have been driven by the unusual way his huge parliamentary majority came about – on a percentage of the vote just a notch above what his disastrous predecessor Jeremy Corbyn achieved in 2019 when Labour lost by a landslide.
As a consequence, this year is when the decisions facing the Labour government can no longer be ducked. In late spring we should see the results of a comprehensive review of spending across Whitehall, with a cascade of policy reviews delivered in the weeks afterward, setting the direction for the UK over the next ten years across health, defence, infrastructure, industrial policy and many more areas.
Central to this are two tensions. The first is that a government that wants to turn its back on years of perceived austerity in public spending will be forced to run budgets tighter than any seen since George Osborne was in the Treasury. The second is that what money it does have to spend may have to go on necessities not luxuries.
No Labour MP went into politics to trim the size of the welfare state or issue public services with warnings that they need to ‘reform or die’ - in the words of health secretary Wes Streeting. But this is what the Starmer administration is doing. No wonder then that generative AI and other tech-enabled efficiencies are hailed as potential life-savers, even if the UK Treasury will maintain an institutional scepticism about spend-to-save tech platforms.
At the same time, the calls on the UK to shift money away from public services like education, local government and policing and into defence will only get louder. President Trump is likely to make raising European defence spending a foreign policy priority. And President Putin’s actions in Ukraine (where North Korean soldiers are engaged in a European theatre) means the UK can probably no longer be complacent about making sure the money it spends on defence is spent well, as well as spent in large enough quantities.
Against this backdrop, we will see Starmer attempt to negotiate a set of improved relationships with the EU and with China, while maintaining the United States as Britain’s principal ally.
In this context, 2024 provides a warning for Starmer. His political project was in part built around Joe Biden’s economic programme in the United States, and Olaf Scholz’s come-from-behind victory in Germany. Both are on their way out in 2025. If he fails, the Conservatives in England, the SNP in Scotland, Plaid Cymru in Wales, and Nigel Farage all over the UK will be ready to pounce.
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The views expressed in this research can be attributed to the named author(s) only.