After the 4th July general election, the UK has a new government, with Labour winning a huge majority ending 14 years of Conservative rule. With change comes brand new political policies, but what are Labours plans for small and medium businesses, and how will this affect you and your business? Using their business manifesto as guidance, we break down their policies and ideas below.
Legislation to tackle late payments
According to their manifesto, Labour has identified that unpaid and outstanding invoices are one of the biggest challenges facing small businesses, with more than £20 billion worth of invoices overdue at any given time. In an effort to tackle this, they plan on bringing in legislation that would require the audit committees of big businesses to report on their company’s payment practices in the company’s annual report. It is hoped that in doing so, this will offer greater transparency to small businesses hoping to engage with potential customers, so they can be better informed of the payment process of company’s they engage with.
Scrap business rates for a fairer system
Labour plans to scrap the current business rates system, which they say disproportionately affects high street shops more than their online counterparts, and replace it with a fully costed and fully funded system of business property taxation that is more relevant for the 21st century. The aim is to take the burden off of our high streets, and support businesses who wish to grow from online to their own premises in the heart of communities.
Revitalise Britain’s high streets
Following on from their plans to scrap business rates, Labour plans to make our high streets safer for customers and workers. Plans include tackling anti-social behaviours in town centres by introducing new police patrols, creating a new specific offence of assault against retail workers and reversing the Conservative’s decision to downgrade the police response to shoplifting offences that total under £200. Labour also plans to afford new powers to councils to take over empty shops and reopen them without consent from the property’s owners, therefore revamping town centres with large populations of empty premises.
Help to boost small business exports
According to The Office for Budget Responsibility (OBR), exports from the UK were expected to fall by 6.6% in 2023, and even further in 2024. Labour plans to work alongside the Federation of Small Business (FSB) on a small business export taskforce, which will look into practical ways of removing the difficulties associated with exporting for businesses of all sizes. They also plan to improve the Brexit deal with the EU when the renewal period comes up in 2025, therefore making exportation clearer and easier.
Plans to upskill future workforces
Research conducted by the Labour party highlighted that small businesses are struggling to expand due to the lack of skilled workers. Labour plans to address these shortages by creating Skills England, which will bring partners together in developing plans to meet the skills needs of the next decade.
They will also introduce Technical Excellence Colleges, which will support further education colleges to specialise in providing higher technical qualifications in the skills needed in specific areas, by consulting with small businesses on what skill sets are needed. They will also work on delivering higher teaching standards in schools, so fewer children leave without basic skills like maths and digital or communication skills.
A focus on Britain’s building future
Labour plans to create opportunities for small builders and tradespeople by reforming our planning system. They have plans to build 1.5 million homes and hope to hire more than 300 new planners across the public sector to expedite decisions, strengthening planning capacity and ensuring that every local planning authority will have at least one full time planner. They expect to fund the latter by increasing the surcharge on stamp duty paid by non-UK residents purchasing property in the UK.
A cheaper, greener energy superpower
The large increase in gas and electricity bills hit many businesses hard, with most energy bills increasing by over 50% over recent years. This increase put extreme pressure on small businesses, especially those in manufacturing industries that have a high demand for gas and electricity. Labour plans to make the UK a clean energy superpower, and help deliver a cheaper, zero-carbon electricity system by 2030. It is also hoped that small businesses will play a vital role in supply chains, creating a potential 300,000 jobs.
Helping British entrepreneurs start-up and scale up
With 99.9% of businesses in the UK being small or medium enterprises (SMEs), Labour plans to help support those entrepreneurs who are starting up their own businesses, and those hoping to scale up their existing SMEs. They plan to do this by breaking down the barriers relating to finance and hope to unlock the supply of long term investment funds for technology-intensive early stage business, ensuring that institutional investors and venture capitals are best placed to invest. They also plan to reform the British Business Bank (which is owned by the Government but independently managed and supports smaller business finance markets), so it can better support SMEs.
A fairer chance at public contracts
In the UK there is around £30 billion worth of public contracts that would be suitable for smaller businesses to deliver, but around 90% of those contracts are currently being awarded to big businesses. Labour’s National Procurement Plan would give SMEs fairer opportunities to benefit from public contract bidding. At least, one SME would be required to make the shortlist of any suitable, smaller contact that goes out to tender.
With the next UK general election being anywhere up to 5 years away, only time will tell how Labour’s plans for business will go, and whether they will be able to deliver all the changes they have laid out.
For more detailed information regarding the information found in this blog, read Labour’s plan for small business here.
