Following Labour’s decisive victory in the 2024 general election, the UK is poised to enter a new era of governance. The business sector now looks to Prime Minister Keir Starmer and his administration to swiftly implement the manifesto commitments that resonated with the electorate.
The Confederation of British Industry (CBI), through CEO Rain Newton-Smith, has voiced the need for immediate action. “Setting out a positive vision for the UK economy and leaning into our international leadership should be top priorities for the first 100 days,” Newton-Smith emphasised. Echoing this sentiment, the British Chambers of Commerce has urged the government to focus on closing the skills gap, expanding British exports, and enhancing productivity from the outset.
Labour’s Technological Agenda
Artificial Intelligence
Labour’s manifesto outlines a proactive approach to technology, including the establishment of a Regulatory Innovation Office. This body is designed to consolidate regulatory functions and expedite approval processes for new technologies, reducing uncertainty for businesses. A key element of this initiative is the introduction of binding regulations for major AI entities, aimed at ensuring responsible innovation.
The manifesto also proposes the creation of a National Data Library to centralise government research and facilitate data-driven public services, with stringent safeguards for public benefit. Jacob Beswick, a former government AI advisor, praised the focus on AI investment but called for more details on how the Regulatory Innovation Office would operationalise its support for industry.
Rashik Parmar, CEO of BCS, The Chartered Institute for IT, highlighted the potential for the government to adopt a positive stance on AI. He urged the administration to establish chartered status for tech professionals, aligning their ethical and competency expectations with those of other regulated fields.
Digital Strategy
Anticipated to join Starmer’s cabinet, Peter Kyle plans to expand the Department for Science, Innovation and Technology (DSIT) into a digital hub for the government. At London Tech Week, Kyle underscored DSIT’s role in driving data utilisation across departments to support Labour’s missions for national renewal.
Caroline Carruthers, CEO of Carruthers and Jackson, commended the focus on ethical data sharing, emphasising the need for a robust governance framework to ensure reliable data use across sectors.
Financial and Economic Policies
Taxation
Labour has committed to maintaining current levels of income tax, national insurance, and VAT, while leaving room for potential adjustments to capital gains tax and pension tax relief. The government aims to close loopholes in existing tax plans and enforce stricter reporting and compliance measures to combat tax avoidance.
The manifesto sets a cap on corporation tax at 25% and retains both full-expensing for capital investment and the annual investment allowance for small businesses. Labour’s broader business taxation strategy remains to be detailed, but it includes a pledge to equalise the competitive landscape between high street and online businesses.
Green Finance
Labour aspires to position the UK as a global leader in green finance, requiring UK-regulated financial institutions and FTSE 100 companies to develop transition plans aligned with the Paris Agreement. Questions remain about the enforcement of these plans and potential penalties for non-compliance.
Stock Market Impact
Investor confidence appears buoyed by Labour’s victory, with the FTSE 100 rising by 0.38% and the pound strengthening against the dollar. James Igoe, head of Redmayne Bentley’s Manchester office, sees this as an opportunity for Labour to attract more international investment by enhancing market liquidity and stability.
Labour’s HR Initiatives
Workers’ Rights
Labour plans to implement approximately 60 changes to employment law within the first 100 days. These include raising the minimum wage, banning zero-hours contracts, and enhancing rights to sick pay, parental leave, and unfair dismissal from day one. A new enforcement body will ensure compliance with these regulations.
Sarah Tahamtani, head of employment at Clarion, notes that the rapid implementation of these measures will require businesses to be well-prepared for significant changes in people management practices.
Skills Development
The introduction of Skills England, improved work experience opportunities, and a revised apprenticeship levy form the cornerstone of Labour’s approach to addressing skills gaps. Peter Cheese, CEO of the Chartered Institute of Professional Development, underscores the importance of employer partnerships to the success of these initiatives.
Economic Inactivity and Employment
Labour proposes merging Jobcentre Plus and the National Careers Service to address economic inactivity, with a responsive approach tailored to local employer needs. Additionally, plans to reform the Work Capability Assessment aim to improve employment opportunities for disabled individuals.
Pay Gap Reporting
The manifesto introduces a Race Equality Act to ensure pay equity for Black, Asian, and other ethnic minority workers. Reporting requirements for disability and ethnicity pay gaps will be mandated for large employers, paralleling existing gender pay gap reporting.
As the new Labour government takes office, business leaders are watching closely to see how swiftly and effectively these policies will be translated into actionable results. The administration’s ability to navigate these commitments will be crucial in shaping the UK’s economic and technological landscape in the coming years.
