In the early hours of 5 July 2024, it was announced that the Labour Party had won the majority in the 2024 General Election. Entering Downing Street as Labour’s first prime minister in 14 years, Sir Kier Starmer has declared that “change begins now.“
But what does this win mean for businesses? In this article, Nottingham chartered accountants, Clayton & Brewill, shares an overview of some of Labour’s plans and policies that are likely to affect businesses and business owners.
1. Business taxation
Labour is committed to one major fiscal event a year to give families and businesses appropriate warning of tax and spending policies. As such, it will remove the Spring Statement, leaving just the Autumn Budget in place.
The party will also develop a business tax roadmap and retain a permanent full expensing system for capital investment and the annual investment allowance for small businesses.
Corporation tax will be capped at the current level of 25%, however Labour will act if tax changes in other countries pose a risk to UK competitiveness.
2. Pensions
Labour has pledged to increase investment from pension funds in UK markets and will adopt reforms to ensure that workplace schemes deliver better returns.
The government will continue to review the pension landscape to decide if any further steps are needed to increase investment in UK markets and improve pension outcomes also.
3. Employment
Labour created a proposal on workers right in May 2024, which it describes as a plan to ‘make work pay’. The party pledged to introduce legislation relating to this proposal in Parliament within 100 days of entering government; if progressed, these changes are going to fundamentally alter the employment law landscape in the UK.
Proposed changes include:
- Raising the national minimum wage – Labour has pledged to increase national minimum wage rates to reflect the national living wage and will extend the full rate of pay to all adult workers (removing the lower rate currently applicable to workers under the age of 21).
- Banning zero hour contracts – the party will ensure everyone has the right to have a contract that reflects the number of hours they regularly work, based on a 12-week reference period.
- Unfair dismissal protection – Labour will abolish the current two year qualifying period for unfair dismissal protection. However, it will still remain possible to dismiss during a probationary period, where there is a fair and transparent process, and so it is more important than ever that employers review their contracts to ensure they have adequate probation clauses.
What’s next?
This is by no means an exhaustive list. As Labour now moves from general ideas to hard detail, the real decision-making begins and the implications for business will come into focus.
The new Parliament will meet on 9 July 2024, which will see MPs take the oath and the House of Commons elect a Speaker. The State Opening of Parliament and a King’s Speech setting out the new government’s legislative programme for the new Parliament is expected to follow on 17 July 2024. UK businesses will no doubt be watching closely.
How we can help
At Clayton & Brewill we understand that there can be a lot of uncertainty following a General Election, particularly when a new party is chosen. We are here to help support you and your business through these upcoming changes and offer our expert advice.
If you have any questions about the upcoming changes following the 2024 General Election, please do not hesitate to contact our friendly team on 0115 950 3044 or send us an email here.
