what has the Labour government achieved?

Almost a year ago, Sir Keir Starmer proclaimed that “the work of change begins immediately”. 

Standing on the steps of Downing Street only hours after becoming prime minister, he laid out bold plans — from reviving the NHS to fixing the British economy to spurring housebuilding — and asked people to judge his government on “actions, not words”.

After a tumultuous first year in office, the Financial Times looks at the Labour government’s record so far. 

Kick-start economic growth

Labour came to power in July 2024, pledging to make growth its “number one mission”. But a year on, business optimism is muted, and the economy shrank in April at its fastest pace since 2023, setting the stage for the slowdown economists expect to follow the 0.7 per cent expansion recorded in the first quarter.

The government has pledged to make people “better off” and a rise in real wages since mid-2023 is helping household finances. However, payroll employment is falling, squeezed by higher labour costs following April’s rise in the national living wage and employers’ national insurance contributions.

High borrowing costs and rent inflation continue to weigh on household finances. Productivity growth — essential to sustainable improvement in living standards — remains elusive. Businesses have taken some heart from trade pacts with the EU, India and the US, but sentiment remains subdued and investment is constrained by the government’s initial emphasis on the “black hole” in the public finances and post-election tax rises.

“Instead of riding the wave of optimism after the election, the chancellor flattened it,” said Paul Dales, chief UK economist at Capital Economics.

Build an NHS fit for the future

The health service received a £29bn annual boost, while many other areas of day-to-day spending faced real-terms cuts, in chancellor Rachel Reeves’ spending review in June, underscoring how critical improving NHS services is to Labour’s political project.

There are signs that this is helping, with almost 4.2mn additional elective operations, appointments and tests in England during the first nine months in office. This has contributed to bringing down the waiting list to 7.39mn referrals in April, 5 per cent below its record high in September 2023 but still far above pre-pandemic levels.

However, Andrew Wishart, economist at the investment bank Berenberg, said progress on clearing the backlog had come at a “high fiscal cost”.

“An improvement in productivity, perhaps made possible by investment in diagnostics equipment, is needed to continue the improvement without recourse to higher tax or borrowing,” he added.

Get Britain building again

Labour pledged to get “Britain building again”, with relaxed planning rules and more funding for homebuilding, as it vowed to build 1.5mn homes over five years.

While a recovery in housebuilding is going to take time as it expands land supply, the latest data is not encouraging, with approvals of planning applications in England having fallen to their lowest in 13 years.

In line with its pledges, Labour has also reformed fiscal rules to support more public investment involving over £100bn of additional capital expenditure, announced a 10-year infrastructure strategy, launched GB Energy to invest in renewable energy and created a National Wealth Fund to stimulate private capital in priority sectors.

These policies have the potential to boost economic growth, experts say. But “the challenge, of course, remains funding”, noted Sandra Horsfield, economist at the financial services company Investec.

Fix the public finances

Reeves, in her October Budget, vowed to “restore stability to our public finances”, but the reality has been a series of U-turns on welfare and an unexpected fiscal consolidation in her Spring Statement.

Analysts now see a rising prospect of a fresh round of tax rises this autumn, as rising defence spending, weak economic growth, and higher expenditures on winter fuel payments and welfare benefits weigh on the public finances. Labour’s pledge not to raise levies on working people leaves a small proportion of the tax base at risk of having to pick up the bill.

“A lot of things will have to go right for the government to avoid having to break some manifesto pledges and yet deliver all the ‘change’ it wants,” said Horsfield.

Secure Britain’s borders

Labour has set up a new border security agency and strengthened co-operation with France on people smuggling.

Returns have reached a seven-year high, but small boat arrivals, totalling nearly 5,000 migrants in the month ending June 27, are “clearly going in the wrong direction”, said Peter Walsh, senior researcher at the Migration Observatory at the University of Oxford. Legislation introducing new enforcement powers is progressing through the House of Lords.

The government also pledged to “end asylum hotels, saving the taxpayer billions of pounds”. But the latest official figures for the number of migrants in hotels show it is higher than when Labour came to power, standing at 32,345 on March 31 2025 compared with 29,585 on June 30 2024.

The government has also begun reforming immigration rules to curb net migration, which has already started to fall as a result of actions taken by the previous government. Official estimates suggest Labour’s plans will reduce the number of arrivals to the UK by about 100,000 a year, but the impact on net migration is less clear.

Bolster public service standards

Improving public services was at the heart of Labour’s election manifesto, with a range of commitments to raise standards and increase hiring in schools and policing.

The Home Office has allocated £200mn to deliver its pledge of 13,000 more neighbourhood police officers, but the National Police Chiefs’ Council said the settlement for policing in the spending review “falls far short” of what is needed to meet this promise.

The government has already ended the VAT exemption for private schools, but it is too early to tell if it will achieve more ambitious goals such as halving serious violent crime and ensuring 75 per cent of five-year-olds are ready for school.

Job vacancies in education and public administration are down from the spring of 2024, but the National Audit Office has raised questions about whether the commitment to hire 6,500 expert new teachers goes far enough to address acute shortages.

Jack Worth, lead economist at the National Foundation for Educational Research, said meeting the pledge would be a “considerable challenge”.