How the New Labour Government Could Impact Your Business

The recent landslide victory of Keir Starmer's Labour Party – while not a shock to most – did mark a significant shift in UK politics. Beyond the politics of the vote, a major shift in political leadership means that nearly all aspects of UK life will see the impacts of policy shifts.

As a business owner, you may be wondering how this change in government could affect your operations, both tomorrow and in the long term. And while markets have enjoyed a smooth transition thus far, there are always uncertainties that may accompany a shift like this. Let’s take a look at both the short and long-term implications of the Labour win in the UK.

The Short-Term Impacts of Labour’s Victory

So far, the impacts of the Labour Party’s victory haven’t been shocking. Most impacts outside unexpected developments will likely be felt in the long term – especially once new policies come into play. 

However, there are a few short-term impacts businesses should at least keep an eye on:

Economic Stability 

In the short term, businesses can expect a period of relative stability. Financial markets have shown little immediate reaction to Labour's win, suggesting a sense of continuity. This stability could provide a much-needed boost to business confidence, potentially encouraging investment and growth.

Consistent Taxation 

Labour has pledged to maintain the current corporation tax rate of 25% for the entire parliamentary term. This commitment to tax stability should allow businesses to plan their finances with greater certainty in the near future.

Find out how you can stablise your finances in this article here.

Legislation Fighting Back Against Late Payments

One of Labour's immediate priorities is to tackle the issue of late payments, which currently locks up an estimated £20 billion in unpaid invoices for UK small businesses. New laws forcing larger firms to disclose their payment practices could improve cash flow for many small and medium-sized enterprises (SMEs).

Labour’s Long-Term Business Impacts

So, while many experts believe that the market will remain relatively calm for at least these first few weeks to months, what changes could businesses see?

Business Rates Reform 

Labour has promised a significant overhaul of the business rates system. While the details are yet to be finalised, this could reduce costs for small businesses and high-street retailers, potentially offset by increased contributions from large multinationals and tech companies.

Infrastructure and Connectivity 

A major campaign promise, the new government plans to implement a ten-year infrastructure strategy, focusing on modernising transport, digital, and housing infrastructure. 

This long-term investment could create new opportunities for businesses, particularly those in the construction and technology sectors.

Employment Law Changes

One area that may impact business owners in particular is potential employment law updates. 

Labour intends to reform employment law, including granting more rights to employees from their first day of work. While this may benefit workers, it could also increase costs and administrative burdens for employers, especially small businesses.

Green Energy and Sustainability 

A hallmark of Labour's policy positioning, green energy will certainly take a larger role in the years ahead. The commitment to making Britain a "clean energy superpower" could create new opportunities for businesses in the renewable energy sector. However, the associated costs of transitioning to greener practices may pose challenges for some industries.

Skills and Immigration 

Immigration continues to be a sharp issue across the country. Labour looks to implement a far different stance on immigration than the Conservatives, and it’s important for business owners to be aware of what the changes may entail.

To address skills shortages, Labour plans to reform the points-based immigration system and focus on local training programs. This could help businesses access the talent they need but may also require investment in training and development.

Unsure Of What’s Next? ActionCOACH Can Help

As with any major party-power transition, changes are sure to come – and the impacts could range from tiny ripples to big waves in the market. But for many businesses, they present opportunities for forward-thinking businesses. 

The key to navigating this new political landscape is to stay informed and adaptable. Consider how these policies might affect your specific industry and start planning accordingly.

Remember, economic policies often evolve as governments face the realities of power, so it's crucial to remain flexible in your approach. Keep an eye on official announcements and consult with financial advisors or business coaches to help you make informed decisions.

Unsure about the future of your business? Speak to an advisor to see how a business coach can help you navigate these changes and position your company for success in the new economic environment. At ActionCOACH, our coaches are ready to help you step forward in confidence – no matter what the future may hold! 

Click here to see how we can help you or alternatively visit our learning centre for free business advice and the latest business news.