The annual party conference season in the UK is always a major part of the political year. However, this year’s conferences, which are akin to national political conventions in the US, are more important than most. Labour’s landslide general election victory in July has resulted in massive levels of interest, particularly in business and political circles, in the party’s annual gathering, which begins in Liverpool on Sunday and continues until Wednesday. Given that some predict Labour might be in power for at least a decade, senior executives of big UK and international companies will be in attendance at the conference in greater numbers than has been the case in recent years. Private-sector sponsorship of the event is expected to be at the highest level ever, too. Unsurprisingly, Labour activists will be in a jubilant mood at the conference, the first since 2010 to take place when the party is in power. Behind that joy, however, the political challenges are multiplying, just two-and-a-half months into the new government’s first term. Ahead of what is expected to be a tough annual budget statement by Chancellor Rachel Reeves on Oct. 30, which will be the first fiscal activity by a Labour government in a decade-and-a-half, several surveys this month suggested the honeymoon period the party enjoyed in July and August might now be well and truly over. A More in Common opinion poll last week, for example, found that Labour’s lead has fallen to just 4 percentage points, with the party at 29 percent compared with the Conservatives at 25 percent. The new, insurgent, right-wing party Reform UK ranked third at 18 percent, followed by the Liberal Democrats at 14 percent. With the House of Commons in recess, the party conference season therefore comes at a potentially highly opportune time for Prime Minister Keir Starmer. His set-piece leadership speech to his party’s event on Tuesday, preceded by a speech by Reeves on Monday, offers an opportunity for the government to reframe the political narrative as criticism of previous Conservative governments ahead of the series of potentially very challenging moments it faces in the coming months. Top of this list is the budget statement at the end of October, which will almost certainly include significant tax rises and spending cuts. It follows a political audit carried out by the government when it took office in July, which reportedly found a black hole in the finances of more than £20 billion ($27 billion) for this fiscal year alone. As well as having to make major decisions about taxation and spending, Reeves might also amend debt targets she previously pledged to stick to. Known as fiscal rules, these are self-imposed limits set by the government to manage its borrowing within a five-year time frame; changing this framework would offer a bit more flexibility. Labour’s general election victory in July has resulted in massive levels of interest, particularly in business and political circles. Andrew Hammond While the exact contents of the upcoming budget are not yet known, Starmer and Reeves have clearly decided to front-load the “political pain” of difficult fiscal decisions during Labour’s first year in office. The calculus here is that this will hopefully result in better economic times during the second half of the decade, ahead of the next UK election which is likely to take place in late 2028 or early 2029. Reeves has said: “The prize, if we can bring stability back to our economy, if we can bring investment back to Britain, is economic growth, good jobs, paying decent wages in all parts of our country, to realize the huge potential that we have.” What she was pointing to here was the prospect of multiyear growth following the 2023 recession in the UK, which itself foreshadowed years of anemic economic growth. While Starmer might hope to ensure his political destiny remains in his own hands, it will in fact rest on the actions of others too, namely the other two main parties, the Conservatives and Liberal Democrats, and possibly Reform UK, which in July won five seats, its first in the House of Commons. The Conservatives, the main opposition party, will choose a new leader in early November, shortly before the US presidential election. The party’s choice between the four remaining candidates will have a big bearing on how fast it might return to power. The early front-runners are two right-wing former Cabinet ministers: Robert Jenrick, who was secretary of state for communities and local government, and Kemi Badenoch, who was secretary of state for international trade. The other contenders are former Foreign and Home Secretary James Cleverly, the only one of the four to have held any of the great offices of state, and former Immigration Minister Tom Tugendhat. When the Conservatives were last in opposition, between 1997 and 2010, the party chose successive leaders of mixed effectiveness. Michael Howard (2003-2005) and David Cameron (2005-2016) helped move the party toward a return to power, but William Hague (1997-2001) and Iain Duncan Smith (2001-2003) proved less effective. Should the Conservatives choose a leader in November who proves ineffective, Reform UK and its populist policies could become a major political influence in coming years. Its leader, Nigel Farage, has proven himself to be one of the most effective, if highly controversial, UK politicians of recent decades, not least through his prominent role in the “Leave” campaign during the 2016 Brexit referendum, which ultimately resulted in the UK leaving the EU. Meanwhile, the centrist Liberal Democrats have reemerged as a significant political force, winning 72 seats in July, many of which were formerly held by the Conservatives. One of the key post-election questions facing LibDem leader Ed Davey is his stance on the Labour government, with its huge majority. He has so far been a critical friend, but this might change if Labour grows more unpopular. This year’s party conference season therefore comes at a pivotal moment in the UK political cycle and the events will frame the coming month, ahead of what is potentially the most important fiscal event for years: the new Labour government’s first budget on Oct. 30. • Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.