What the General Election Could Mean for Your Business
A general election in the UK will take place on 4th July, and businesses from all over the country are viewing the proposals of the large parties with interest. That election result could make or break businesses large and small, given that various parties have dramatically different schemes and ideas. Ahead of a general election, one that’s sure to alter the business environment, it is essential to understand what each party’s agenda could mean for you.
What Should UK Businesses Expect from a Labour Win?
If Labour wins the general election on 4th July, businesses can expect a focus on economic growth, clean energy and more clarity in regards to tax obligations.
- Net Zero and Clean Energy – Labour has already shared plans to net zero energy by 2030, which could be a huge business opportunity, especially for those dealing in renewable energy and technology. The growth of wind and solar power – and Labour’s commitment to nuclear energy, carbon capture, and hydrogen investments – could see a surge in demand for products and services supporting this clean energy transition. This could bring huge opportunities for businesses in these sectors.
- Business Taxation and Fiscal Policy – Labour has said it will cap corporation tax at 25% and push full expensing for businesses, which may provide some clarity for businesses over what they can expect to pay in tax. Plus, proposals to restrict major fiscal events to once a year and the publication of a roadmap on business taxation for the entire parliament is something that many businesses will welcome.
- Economic Growth and Partnerships – Labour’s first aim is to kickstart economic growth by positioning the government as a strategic partner to businesses. This approach would likely involve a more stable and predictable policy environment, which could benefit business by reducing uncertainty and allowing for better long term planning. The emphasis on collaboration suggests that businesses might have more direct input into policy making processes, particularly in sectors that are considered key for growth.
- Industrial and Infrastructure Strategy – Labour plans to implement a new strategy guided by a new statutory Industrial Strategy Council. This strategy would target key sectors like financial services, automotive, life sciences and the creative industries, potentially leading to more coordinated and supportive policies for these areas.
- Trade Policy and Workforce Development – Labour intends to improve the UK’s relationship with the EU, without rejoining the single market or customs union, which could reduce trade barriers and open up new opportunities for businesses that export. Labour’s plans to reform the Apprenticeship Levy and establish Skills England aim to ensure that businesses have access to a well trained workforce. This could help businesses to find talented employees, especially in skilled industries.
What Could a Conservative Win Mean for Businesses?
Though there are certainly some overlaps, a Conservative win could mean something different for your business.
- Boosting Local Economies – One of the key aspects of the Conservative strategy is the creation of investment zones, aimed at stimulating local economies. These zones, located in eight locations across England, will receive funding to enhance skills, infrastructure, tax reliefs and business rates retention. For businesses, this could mean new opportunities to expand or establish operations in areas with significant support from the government.
- Tackling Late Payments – SMEs often face significant challenges due to late payments, which can prevent growth and limit their ability to invest in future opportunities. The Conservatives plan to address this issue by taking reporting requirements further, and by strengthening the powers of the Small Business Commissioner. These measures are designed to ensure that SMEs receive their payments on time, improving cash flow and enabling them to grow.
- Fiscal Policy and Taxation – Similarly to Labour, the Conservatives have committed to maintaining the current corporation tax rate. But, they also have plans for a policy to cut the taxes of the self-employed. By getting rid of national insurance for self-employed workers, they could provide financial relief to a significant portion of the UK’s workforce, potentially encouraging entrepreneurship and small business growth.
- Net Zero and Onshore Projects – The Conservative party is focused on achieving net zero by 2050, with a continued focus on investments in offshore wind, carbon capture and nuclear energy. However, their approach is slightly different to Labour’s with specific conditions attached to onshore wind and solar energy projects.
What About the Liberal Democrats?
Of course, Labour and Conservative aren’t the only two parties in the running. So, what about the Liberal Democrats? A Liberal Democrat win might just go on to change the business landscape hugely, as many of that party’s policies are about reshaping the economic environment and extending workers’ rights.
- The most important change that would most likely take place under the Liberal Democrats rejoining the single market. This would benefit many businesses in their relationships with other member states of the EU. This could mean that there will be fewer trade barriers for the single market, which have arisen post-Brexit, leading to potential easiness and reduced costs in business trading with the EU.
- The Liberal Democrats will scrap business rates and replace them with a commercial landowner’s levy aimed at relieving the burden on business rate payers. The hope is that this will give businesses the ability to use their resources for investment and growth.
- Liberal Democrats plan to enhance the pay structure for workers on zero-hours contracts, including a wage increase for these workers of 20%. This policy in essence enhances the pay of many zero-hour workers and compensates them for the lost job security, whilst also making the contracts less attractive for employers. Another significant factor that could increase stability in the workforce is the introduction of the right for employees to request a fixed hours contract after 12 months of service.
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Sources:
https://www.forbesburton.com/news/which_party_is_best_for_business
