What Effect Could the Outcome of the UK General Election Have on SMEs in the UK?
HOW THE 2024 GENERAL ELECTION COULD RESHAPE THE LANDSCAPE FOR SMALL AND MEDIUM-SIZED ENTERPRISES
Prime Minister Rishi Sunak has announced an early UK General Election for July 4, 2024. With the election just weeks away, small and medium-sized enterprises (SMEs) are keen to understand what the next government might offer and how the election’s outcome could impact them.
The general election could provide businesses with much-needed clarity after a tumultuous year. SMEs are already grappling with economic uncertainty, the lingering effects of the recession, the Ukraine-Russia conflict, the cost-of-living crisis, and the aftermath of the pandemic. The uncertainty in the lead-up to the election is causing the pound to fluctuate against major currencies, increasing pressure on goods and services sourced from abroad.
SMEs AS A POLITICAL PRIORITY
SMEs are the backbone of the economy, making it crucial for political parties to propose pledges that support small businesses to secure a favourable vote. Small business owners and the self-employed across the country will be scrutinising which party offers the most compelling pro-growth, pro-business policies to stimulate the economy and foster entrepreneurship.
The UK’s 5.5 million small firms represent a significant and motivated section of the electorate, alongside the 16 million voters employed by small businesses. There will be intense competition for their votes, and candidates will need a convincing plan to reduce the cost of doing business, support small businesses’ growth, and create an environment conducive to new start-ups
WHY BUSINESSES ARE LOOKING FOR CHANGE
Business owners are calling on the next government to champion SMEs in order to solidify the UK’s status as an economic superpower. They argue that the upcoming election is a crucial opportunity to highlight business and technology as key drivers of economic recovery.
ANTICIPATED EMPLOYMENT LAW REFORMS
Significant changes to employment law are anticipated, with each party promising workplace reforms. In 2024, numerous changes to employment law have already been introduced, with more potentially on the horizon. The Labour Party’s manifesto, if enacted, could significantly impact businesses of all sizes. One key proposal is granting full employment rights to all workers from their first day, raising many questions about the feasibility of hiring decisions under these new regulations.
The Conservative Party, if re-elected, plans to continue implementing the 10 new employment laws introduced this year. These include neonatal care leave and pay, industrial action law reform, the ‘Back to Work’ plan, proposed fit note reforms, umbrella company market reform, continuation of the National Disability Strategy, reintroduction of employment tribunal fees, reform of non-compete clauses, TUPE reform, and addressing the definition of ‘sex’ in the Equality Act 2010.
In contrast, the Labour Party’s manifesto outlines approximately 60 changes to employment laws. Key proposals include removing qualifying periods for basic rights like unfair dismissal, sick pay, and parental leave from day one. Labour also plans to eliminate the distinction between employees and workers, strengthen protections for pregnant workers, whistle-blowers, and redundant employees, and require ethnicity pay gap reporting for larger firms. Other proposals include banning exploitative zero-hours contracts, making flexible working a default right, improving protections for family emergencies, and introducing a “right to disconnect.”
CONCLUSION: WHAT’S AT STAKE FOR SMES
The upcoming UK General Election holds significant implications for SMEs. The clarity it brings can help stabilise the business environment amidst economic uncertainty. SMEs, being crucial to the economy, require support through pro-business policies to thrive. Employment law reforms proposed by different parties could reshape the business landscape, making it essential for business owners to stay informed and prepared. As political parties compete for the votes of small business owners and their employees, the focus must remain on creating a conducive environment for SMEs to grow and drive economic recovery.
To receive further advice on how to bolster the strength of your business amongst economic uncertainty, contact Voscap today on 020 7769 6831 or email help@voscap.co.uk.
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