With a General Election comes change. From changes in taxation to tighter regulations and changes in investor sentiment, potential shifts in government, and political uncertainty, this will undoubtedly impact all businesses. Staying informed and adaptable is crucial for navigating the challenges that arise with change.
Potential policy changes & business impact
There are several factors that determine the impact general elections have on businesses in the UK.
Regulatory changes
Regulatory changes might include implementing new procedures, extensive employee training or the need to hire a compliance officer who is responsible for ensuring ongoing adherence to new regulatory requirements.
Some of the changes included in Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People,’ proposes significant adjustments to employment law:
- End to fire and rehire practices: This is intended to protect workers from sudden and unfair changes to their employment contracts.
- Day-one right to sick pay: workers would qualify for Statutory Sick Pay from their first day of absence rather than the fourth.
- Protection against unfair dismissal: extending protections against unfair dismissal from the current two-year requirement to the first day of employment, with special attention to probationary periods.
- Race Equality Act: introduce a Race Equality Act to enhance protections against dual discrimination, building on the existing Equality Act 2010.
- Menopause discrimination protections: to introduce protections for employees experiencing menopause.
- Right to disconnect: workers have the right to disconnect from work outside of working hours, following the examples set by countries like Ireland and Belgium.
- Flexible working from day one: make flexible working the default option from the first day of employment unless it is not reasonably feasible.
- Extended maternity and paternity leave: propose extending statutory maternity and paternity leave, including provisions for bereavement leave and an urgent review of the shared parental leave framework.
- Strengthened harassment laws: to extend protections to interns and volunteers and reintroduce protections against third-party harassment.
- Ethnicity and disability pay gap reporting: Labour may require employers with more than 250 employees to report on ethnicity and disability pay gaps, promoting transparency and equity in the workplace.
Technology development
There are a few key initiatives from the Labour Government that are aimed at boosting innovation and enhancing the UK's digital infrastructure, which include plans to create a:
- Regulatory innovation office: to help regulators update regulations and speed up approval timelines for new technologies.
- Industrial strategy council: to advise businesses on leveraging new technologies. This initiative is designed to foster collaboration between the government and industry to ensure the UK remains competitive on a global scale.
- AI Safety Institute: to grant statutory authority to the AI Safety Institute and introduce binding regulations for companies developing advanced AI models.
- Cyber defence strategy: this strategy aims to safeguard critical infrastructure against cyber-attacks and enhance national security. It includes investments in cybersecurity research, public-private partnerships to share threat intelligence and train a new generation of cybersecurity professionals.
Tax reforms
The Labour Party announced a range of policies, some of which included tax reforms. The Party's manifesto pledges to cap Cooperation tax at 25% and not increase income tax, National Insurance, or VAT rates.
However, to achieve their commitment to significantly investing in the UK's national health service and education system, some of the funds required will have to come from increases to certain taxes, and the Autumn Budget will certainly unveil those changes.
Business impact post-general election
General elections undoubtedly pose significant challenges for businesses. It's crucial to stay vigilant about the potential outcomes and implications of electing a new government. Keeping informed about the latest developments is essential to prepare and reduce the impact on your business.
It is important to assess how any changes affect your industry and begin implementing the required strategies. Your staff, suppliers, and key stakeholders should be assured that your business is prepared to adapt to new developments.
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