After a brief Christmas respite at Chequers, Prime Minister Keir Starmer returns to Westminster facing a formidable array of domestic and international challenges in 2026. With MPs reconvening, his government must navigate a critical year marked by economic pressures, crucial elections, and high-stakes diplomacy.
Domestic Pressures Mounting
The Prime Minister has identified the cost of living as his top priority, promising policies to put more money in people's pockets. A suite of measures is due in the Spring, including a major overhaul of workers' rights with sick pay from day one, a cap on prescription charges, and the first rail fare freeze in three decades. Chancellor Rachel Reeves will deliver her Spring Statement on March 3, with hopes pinned on falling inflation and further interest rate cuts.
Alongside the economy, NHS waiting lists remain a critical battleground. Progress on fixing the health service is vital for electoral credibility. The government faces ongoing disruption, with junior doctors having staged a five-day strike before Christmas. The British Medical Association (BMA) is reballoting for a further six months of action, with the result expected in February, making a resolution crucial.
Political and Policy Tests
The issue of small boat crossings continues to challenge the government. Data shows a 13% year-on-year increase, with 41,472 people making the journey in 2025. The government's strategy includes revised asylum protections and a returns agreement with France, but Starmer walks a tightrope between appealing to Reform UK voters and alienating the left.
In education, a long-awaited overhaul of the special educational needs and disabilities (SEND) system is planned for 2026. Parents await reforms after a delayed White Paper, with ministers insisting on a legal guarantee of support but facing potential backlash over the future of Education, Health and Care Plans (EHCPs).
All domestic efforts will be tested at the ballot box in May's elections across England, Scotland, and Wales. With Labour's popularity low, the party fears a bruising night. The contests include local elections in England and pivotal votes for the Scottish Parliament and Welsh Senedd, where Labour's First Ministers, Anas Sarwar and Eluned Morgan, face tough fights.
International Diplomacy and Leadership Whispers
On the world stage, a high-stakes trip to China is scheduled for late January, marking the first visit by a British PM since Theresa May in 2018. Starmer is set to meet President Xi Jinping, balancing security concerns with the economic imperative of the relationship. A decision on a controversial Chinese super-embassy in London is anticipated before the visit.
Meanwhile, negotiations over a Ukraine peace plan will intensify. Starmer is escalating planning for a "Coalition of the Willing" to police any future deal, while also seeking to influence US President Donald Trump through the UK's new ambassador in Washington, Christian Turner.
Closer to home, the 10th anniversary of the Brexit referendum in June will spotlight Starmer's aim to "get closer" to the EU. While ruling out rejoining the single market or customs union, the government is negotiating to rejoin the Erasmus student exchange programme and exploring a youth mobility scheme.
A Question of Leadership
Underpinning all these challenges are quiet leadership murmurs within Labour. Allies of the Prime Minister have dismissed speculation, but some backbenchers suggest a disastrous performance in the May elections could trigger unrest. The PM's allies have accused Health Secretary Wes Streeting of plotting—a claim he denies—highlighting tensions at the top. Any challenger would need the backing of 80 MPs, a significant hurdle.
With a packed agenda from the NHS to Beijing, 2026 is set to be a defining year for Keir Starmer's premiership, testing his government's resolve and his own political authority.
