General election commentary from Royal London and Royal London Asset Management

Published  05 July 2024
   3 min read

Jamie Jenkins, Director of Policy at Royal London

Mutual sector

"A widely overlooked commitment in Labour’s manifesto is its longstanding commitment to double the size of the mutual sector. In the UK, mutuals represent less than 10% of the market, compared to between 30% and 60% in many other developed economies. Mutuals provide an alternative for consumers, where profits can be shared with customers, as opposed to shareholders.

"The UK market would benefit from creating an environment where new and smaller mutuals can grow and compete on a level playing field with their shareholder-owned counterparts."

Review of pensions landscape

"One of the most important manifesto pledges from Labour for the financial services sector is its commitment to conducting a review of the pensions landscape. Pension assets are now considered a key ingredient in resolving the UK’s economic growth challenge and, as a result, have risen up the ranks of political priorities. But pensions are first and foremost there to provide people with an income in retirement.

"The two things are not mutually exclusive, but any review needs to take a more holistic, longer-term view, considering the needs of all stakeholders.

"And the new Government will undoubtedly want to build on the success of automatic enrolment, originally conceived under a Labour Government, rather than make rash decisions that risk dismantling it."

GB Energy

"If the plan for GB Energy is to better enable the various actors involved in the energy transition to collaborate on its delivery, this could just be the magic dust that is so desperately needed to accelerate investment in our country’s net zero ambition."

Trevor Greetham, Head of Multi Asset at Royal London Asset Management

"Markets aren’t hugely interested in the UK general election but policy choices over the next few years will be critical with investors likely to face further bouts of inflation.

"In contrast to the situation in France, the outcome of the snap election in Britain was never really in doubt and macroeconomic policy differences between the main parties are, on the surface, minor. It’s a world away from 2019 when Boris Johnson faced up against Jeremy Corbyn with Brexit in the balance. Labour has inherited an unrealistically tight fiscal baseline for departmental spending and their manifesto offers little insight into how they will improve public services without a further substantial rise in taxes and/or debt, both already at a half century high as a share of GDP. Keir Starmer has proposed various measures to boost economic growth, which are welcome, but meaningful improvement may prove elusive if he sticks to his promise to keep Britain outside the EU Single Market and Customs Union, or a ‘Hard Brexit’ in 2019 parlance.

"Meanwhile, the battle against inflation is by no means won and an uncertain geopolitical backdrop, populism and a drop in fossil fuel capacity as we transition to net zero all point to further cost of living surges in coming years. If these are seen as ‘just’ spikes, the Bank of England is likely to accommodate them, and unanticipated inflation could help Labour with their fiscal conundrum by pushing incomes above tax thresholds and debasing the real value of government debt.

"This would merely be a continuation of the way UK policymakers have responded to shocks over the last 20 years, from the Global Financial Crisis and Brexit to Covid and the Ukraine invasion. In every case, inflation was allowed to overshoot in order to avoid even more painful choices. This is why, as multi asset investors, we believe it makes sense to invest across a broad range of asset classes, including the likes of commodities that can rise in price when inflation hits."

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About Royal London

Royal London is the largest mutual life, pensions and investment company in the UK, and in the top 30 mutuals globally, with assets under management of £162 billion, 8.6 million policies in force and over 4,200 employees. Figures quoted are as at 31 December 2023. Learn more at