The 2026 Holyrood and Senedd Elections: Why the stakes just got higher for business
When CT Group’s campaigns team convened a select group of businesses in January to examine the approaching Scottish and Welsh elections, the political landscape was already volatile. Within weeks, it became dramatically more so. Anas Sarwar’s public call for Sir Keir Starmer to resign as Prime Minister – a move unprecedented in its boldness from a devolved Labour leader – has altered the dynamics and raised the stakes for every organisation with interests across Britain.
An already complex picture
The elections for the Scottish and Welsh Parliaments dominate a set of mid-term polls that will be a critical test for the Prime Minister and impact the direction of the Labour government ahead of the next General Election.
Both nations have seen extraordinary volatility since the 2024 General Election. After winning 37 Westminster seats, May was meant to be the election at which Labour returned to government at Holyrood. But these prospects have deteriorated sharply, while John Swinney’s stabilising leadership has revived the SNP. Sarwar’s intervention was driven by a calculation that Starmer’s handling of the Mandelson affair dwindling confidence in Downing Street was destroying Scottish Labour’s prospects in May.
In Wales, there are firm perceptions of a country heading in the wrong direction, with fewer private sector jobs than ten years ago. With Labour in power uninterrupted since 1999, it is seen as culpable and has seen its support collapse. Plaid Cymru has been the principal beneficiary, with Reform also surging as it is in Scotland.
Energy policy: a collision course?
Voters are likely to view these elections through the prism of cost of living, immigration and the quality of public services. However, the prospect of nationalist governments in both nations seeking to maximise sovereign energy resources could have longer-term political and economic ramifications. Plaid Cymru, alongside Welsh Labour, are campaigning for devolution of the Crown Estate to Wales, which would allow the Welsh Government to lease swathes of seabed for offshore wind. Plaid has already stated its belief that a “sizeable stake — if not outright ownership” is required in renewable energy projects to hit net zero targets by 2050.
In Scotland, the direction of North Sea oil and gas policy remains contentious. A more interventionist approach to energy policy adds to the factors governments and investors must weigh when considering commitments in these nations.
What this means for business
The possibility of nationalist-led governments in all three devolved bodies simultaneously would create a markedly more complex intergovernmental environment, with increased demands for resources and deliberate policy divergence from Westminster. A Labour leadership crisis, whether Starmer survives or falls, compounds this uncertainty.
A strong performance for Reform, who have aspirations to enter government in Wales and become the official opposition in Scotland, would present them with validation and scrutiny, creating expectations for further policy development. This represents both risks and opportunities for business engagement.
Businesses operating across multiple UK jurisdictions face the prospect of engaging with governments that are actively pulling apart on priorities from energy and industrial strategy to taxation and public procurement. Nationalist governments in both Edinburgh and Cardiff could work together in areas of mutual interest to drive policy or legislative concessions from Westminster.
The window for effective engagement and to offer creative, deliverable policy ideas is narrowing. With large churn expected, now is the time to begin engaging with parties and candidates to frame narratives around key issues and align them with respective party priorities.
Those who invest in rigorous scenario planning and targeted stakeholder engagement now will be best positioned to shape outcomes rather than merely react to them.
CT Group’s campaigns team continues to advise clients on political risk, stakeholder strategy, and scenario planning across all UK jurisdictions. To discuss how these elections may affect your organisation, contact our team here: ctgroup.com/contact-us/.
