What would a Labour government mean for business?

Last year proved anything but easy for the Conservative Government. In the first full year since Rishi Sunak took over the reins, the party lost six byelections, with the opposition gaining power in constituencies with previously strong Conservative majorities. With the Prime Minister indicating a General Election is set to come later in 2024, the Conservative Party has a major job on its hand to retain power.

What does this mean for Labour?

The Labour Party have enjoyed extensive leads in the polls for quite some time, and recent polling indicating that rural voters are more likely to back Labour than the Tories at the next General Election will focus the minds of those in CCHQ.

Despite many seeing Starmer’s party as the de facto ‘Government in waiting’, the Conservative Party is an electoral force with history of success at the ballot box. Nonetheless, all the signs point towards the Labour Party having more than a fighting chance come the next General Election.

What might we see from a Labour Government?

Last year, the Leader of the Labour Party revealed his “Five Missions for a Better Britain” focused on what the Labour Party are calling an “end to short term sticking plaster politics” and a transition towards a “mission-driven Government.”

Although lacking policy detail, the frontrunner to be the next Prime Minister focused on five key pillars his party believe will get the country back on its feet following the coronavirus pandemic and cost of living crisis. Productivity gains and new jobs will aim to secure the highest sustained growth in the G7, while expediting the move to net zero will make Britain a clean energy superpower.

However, in recent weeks, Starmer has rowed back on his headline policy regarding green investment, telling an audience at his New Year’s Speech in Bristol that he would not be prepared to borrow almost £30bn to fund green investments as it would break an economic promise to reduce government debt.

It is expected at the start of February, however, that the Labour Party will have completed and confirmed its Manifesto ahead of embarking on an election footing. Big questions will likely then be answered regarding the Labour Party’s plans for tax policy, the NHS, the green agenda and immigration,

Which businesses should be keeping an eye out?

Fundamentally, businesses across the economy from small to large, from private to public and trade organisations alike should be taking proactive steps to understand the implications that a change in government could deliver for their organisation. Should the Labour Party come to power at the next General Election, however, certain sectors will have a particular vested interest in any policy positions adopted by Sir Keir Starmer and his cabinet.

Businesses operating within the sustainability space will be buoyed by the opposition’s pledge to make Britain a clean energy superpower. With a current pledge to achieve Net Zero by 2050, organisations in the alternative energy space will be keeping a close eye on any policy aimed at accelerating the transition towards a sustainable future, being mindful that the party’s position on green spending could change if not fiscally viable. Similarly, with the sale of new petrol and diesel cars to end in 2030, those within the electrical vehicle space will be interested in any regulatory, legislative or policy changes which may encourage the transition to electric vehicles.

On the other side of the Atlantic, President Biden’s Inflation Reduction Act has seen an attempt at managing rising prices, through lowering energy costs and prescription drug pricing reform. In 2023, a poll from the Institute of Directors found that around 80% of UK business leaders would support a similar strategy in the UK. At the time, Rishi Sunak voiced quite public concerns about green subsidies involved in the multibillion-dollar package. However, Labour’s Shadow Cabinet embraced the idea, with former leader Ed Miliband pledging a green prosperity plan being cast as the British version of Biden’s policy and it was reported that Labour Party officials were closely working with the President’s team on policy development in the space.

With the NHS facing increasing pressure relating to targets. staff retention and strikes, Labour’s promise to make the health service “fit for the future” may rely on support from the private sector. The requirement for a strategy focused on preventative measures, those in the health and wellbeing space are likely to become even more vital in the work to safeguard the future of the NHS.

More broadly, the upcoming General Election, whenever that may be comes at a crucial time for the UK economy and society. Businesses and organisations will be closely monitoring any change in policy that may come from a new Labour Government and how closely these relate to the biggest issues facing the public such as the cost of living and NHS crises.

Click here to find out more about how your business can begin engaging with the potential Government in waiting.

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