Prime Minister Keir Starmer returns to Westminster after a Christmas break at Chequers to confront a formidable array of domestic and international challenges in 2026. With MPs reconvening, his government's agenda is packed with urgent priorities, from the enduring cost of living crisis to high-stakes diplomacy, all while managing internal party tensions.
Domestic Pressures Mounting
The cost of living remains the Prime Minister's stated top priority. In a recent interview, Starmer emphasised his focus on putting more money in people's pockets. A suite of policies is set to take effect 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. The rollout of free school breakfast clubs will continue.
All eyes will be on Chancellor Rachel Reeves's Spring Statement on March 3, with hopes that inflation has peaked and interest rates fall further. However, significant tax decisions are not expected until the Autumn Budget, and difficult conversations on welfare reform loom within the Labour Party.
Another critical domestic battle is the NHS. Reducing waiting lists was a flagship election pledge, and Starmer knows tangible progress is needed in 2026. The service continues to be plagued by headlines of patients treated in A&E corridors. The situation was exacerbated just before Christmas by a five-day strike by junior doctors, despite warnings of a 'super-flu'.
A war of words erupted between Health Secretary Wes Streeting and the British Medical Association (BMA), which is now reballoting its members for a further six months of action. The result, due in February, will be crucial for any progress on waiting lists.
Immigration, Elections, and Internal Rifts
The issue of small boat crossings persists as a major headache. Data shows 41,472 people made the perilous Channel crossing in 2025, a 13% year-on-year increase. The government has announced new measures, including revised asylum protections and a returns agreement with France, aiming to win back support from Reform UK voters, though this risks alienating the party's left wing.
May will bring Starmer's toughest electoral test since 2024, with crucial votes across England, Scotland, and Wales. Labour's popularity is languishing, and the party fears a bruising night. In Wales, First Minister Eluned Morgan fights to keep Labour in power against challenges from Reform UK and Plaid Cymru. In Scotland, Anas Sarwar's hopes of becoming First Minister have dimmed as Labour's poll numbers have sunk, potentially allowing the SNP to retain control.
These elections could trigger a leadership challenge if results are disastrous. Whispers among backbenchers have already been fuelled by a pre-Budget briefing war, where Starmer's allies accused Wes Streeting of plotting—a claim Streeting denies. Any challenger would need the backing of 80 MPs, a tall order but a sign of the simmering tensions.
Global Stage: China, Ukraine, and Europe
On the international front, a high-stakes trip to China is scheduled for late January, where Starmer will meet President Xi Jinping. It will be the first visit by a British PM since Theresa May in 2018, occurring amid serious concerns about Chinese espionage. The trip underscores the economic importance of the relationship to Starmer's growth agenda.
Meanwhile, negotiations for a Ukraine peace plan will continue. Starmer is expected to escalate planning for a 'Coalition of the Willing'—a group of over 30 nations to police any future deal. He has warned that a botched agreement could lead to worse conflict. Influencing the erratic US President Donald Trump will be a key task, with new ambassador Christian Turner playing a crucial role.
June marks 10 years since the Brexit referendum, and Starmer has expressed a desire to 'get closer' to the EU. While ruling out rejoining the single market or customs union, some ministers, including Wes Streeting, have hinted at seeking a new customs union deal. The government is negotiating to rejoin the Erasmus student exchange programme and exploring a youth mobility scheme with Europe.
From the NHS to Beijing, and from the English Channel to the ballot box, 2026 presents a defining set of challenges that will test the Prime Minister's leadership and his government's resolve at every turn.
