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General Election 2024: Change… indeed!

General Election 2024: Change... Indeed!

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Article

Date

July 5, 2024
The read

With Labour’s expected election victory confirmed and the gears of a new Government beginning to click into place, we’re all wondering, “What does this mean for my business?”.

 

We’ve had a look at the policy pledges the party made during the election campaign and shared our thoughts on the potential impact for businesses and organisations.

“Change” was the party’s campaign slogan and that’s what has been promised in the Labour Manifesto. So, taking a brief fly-through of that document, what might we expect to see in the coming weeks and months?

Tax

  • The party’s pledge to keep corporation tax at 25% and no plans for an increase in income tax will come as welcome news to businesses and employees alike.
  • Meanwhile, those in the fossil fuel industry will have one eye on the Energy Profits Levy or oil and gas “windfall tax”; Labour’s plan for not only protecting consumers and businesses but preventing any more future energy cost spikes, as experienced by us all in the last two years.

Energy

  • Businesses in the green energy sector will no doubt be interested in the details around the new Government’s plans to create Great British Energy, which they claim will create over 600,000 new jobs and turn the UK into a “green energy superpower”.
  • Manufacturers and high energy consumers will welcome the proposals that will drive down energy costs (according to the Manifesto) not to mention the potential growth in the renewables sector generally, stimulated by the National Wealth Fund, created to invest specifically in the upgrade of the country’s energy infrastructure. All of which is great news for the nation’s bourgeoning offshore renewables sector.

 Regulation

  • As well as the focus on green energy, Labour has also set out bold proposals to invigorate the financial services sector, which contributed 12% of the UK economic output last year.
  • The party has a six-point plan to deliver sectoral growth – good news for the North as Labour looks to scale regional financial centres to unlock the potential of the mutuals sector.
  • While Sir Kier Starmer recently said that he does not see the UK re-joining the EU “in his lifetime”, many in the financial sector will be heartened by talk among Labour’s leading lights of strengthening the UK’s international engagement in financial services and building a collaborative relationship with the EU.
  • There is also an ambition to embrace innovation and stimulate fintech as the future of financial services by harnessing the use of AI.

Development/Construction

  • Another key sector that is the focus of substantial growth plans under this new Labour Government is construction and development, which will be welcome news for our clients and friends in the property and construction sector.
  • The new PM has pledged to build 5 million new homes over the lifespan of this Parliament, addressing the housing crisis with mandatory housing targets.
  • With a promise to ease the planning process, Labour is also suggesting new build planning obligations, that will build on recent policy for biodiversity net gain, a relatively minor pill to swallow for developers looking to get projects underway quickly.
  • Although full details are yet to emerge, Labour intends to replace business rates to help “energise the UK high street”.

Rights

  • Businesses and organisations will need to be prepared for Labour’s proposal to introduce unfair dismissal protection from day one of employment.
  • There will also be an increase in costs, with a rise in the minimum wage expected early in the new Parliament.
  • Labour had been expected to introduce a zero-hour contracts ban, but the party’s “new deal for workers” saw them row back on that, instead offering employees the right to choose a zero-hour contract option.

While Labour’s manifesto was heavy on ideas, it was relatively light on detail, maybe not surprising given their lead in the polls at the time of publishing. It does, however, offer a taste of a Labour government’s early priorities – a focus on wealth creation, addressing spiralling energy costs, driving green energy use and creation, boosting financial services, and a key pledge to get Britain building.

A wealth of business-friendly proposals will see the Government aiming to quickly address some of the largest challenges faced by companies in the UK, such as skills and labour shortages, tackling late payment, and overcoming issues with the business rates system.

Freezing corporation tax, income tax, NIC, and VAT will also be welcomed by firms of all sizes, but particularly SMEs.

It will be interesting to see what is prioritised by Labour in the coming months, but there are enough pledges in the current manifesto to suggest that the party’s focus on growth will be good for business.