Labour’s landslide election win has generated a wave of reactions from business leaders across the UK. Many see this as an opportunity for significant change and growth. The focus is now on how the new administration will support and reform various sectors, from small businesses to the electric vehicle market.
Will Reform Reach the British Business Bank?
Theo Chatha, Chief Financial Officer at Bibby Financial Services, emphasized the need for Labour to deliver on their promise of reforming the British Business Bank and the Bank Referral Scheme. He highlighted that Labour now has the chance to drive economic growth through the resilient small and medium-sized business community in the UK. First, however, they must address key areas of concern for SMEs, particularly access to finance. High street banks remain the first choice for many SMEs, and there is a strong opportunity for Labour to increase competition in commercial lending and provide more options for SMEs.
There is a need for Labour to develop a new scheme that includes input from a broader range of SME funders and commercial finance brokers. This would ensure that the initiative works effectively for SMEs. Despite the efforts of the British Business Bank and designated platforms, the number of businesses supported by the Bank Referral Scheme since its launch in 2016 has been disappointing. Labour’s commitment to strengthening this scheme is encouraging, but more needs to be done to give SMEs better financing choices and opportunities to thrive.
Pushing Talent in Britain
Michael Stull, Managing Director of ManpowerGroup UK, expressed hope that Labour would prioritise a people-first approach to ensuring the future prosperity of the country. According to him, millions are struggling to find, access, or participate in work. Therefore, Labour must implement initiatives outlined in its Plan to Make Work Pay paper to create better quality jobs that offer sustainable earning potential, work-life balance, and wellbeing. These jobs should be accessible and equitable for everyone to build a more inclusive and dynamic labour market.
Under Labour’s leadership, there is potential for the UK to transition towards a new-look economy. Stull anticipated engaging with relevant Ministers to promote this shift. He believes that better skills and improved job quality are critical components needed to deliver a more inclusive and dynamic labour market. Labour’s new leadership has placed economic transformation as a priority, and this has generated eagerness among various sectors to explore the opportunities this could present.
Decisive Election Result a Golden Opportunity
Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB), viewed Labour’s decisive election victory as a substantial opportunity for planting the seeds of small business growth. She urged the new administration to introduce measures to ease business costs and support investment and expansion. Some of the key areas she highlighted included tackling poor payment practices, reforming the business rates system, and legislating a Small Business Bill in the upcoming King’s Speech.
Supporting and growing small businesses is vital for job creation, community development, and the overall economy. The FSB looks forward to working with the new Government ministers to ensure that the small business voice is heard and effective actions are taken to support existing and new entrepreneurs. McKenzie’s expectation is that political stability will lead to economic stability and recovery, which is crucial for small businesses to thrive.
Impact on Startups and SMEs
George Holmes, MD of Aurora Capital, discussed the potential impact of Labour’s victory on startups and SMEs. Labour’s manifesto included plans that could support UK businesses and startups, with an emphasis on reforming the British Business Bank to help these enterprises access funding. Holmes noted that while the proposed reforms are promising, the exact details remain unclear. The business rate reform, particularly, could assist aspiring shop owners in making their ventures viable.
For startups and small businesses to thrive, they need support, stability, and a growing economy. Holmes believes that if Labour delivers on its promises, a positive environment could emerge where SMEs and entrepreneurs can flourish. However, he stressed the importance of clarity in Labour’s plans to turn these promises into tangible benefits for businesses.
Prioritising EV to Power the Motor Industry
Philip Nothard, Chair of the Vehicle Remarketing Association (VRA), emphasised the significance of electrification and investment in the UK motor industry. He mentioned that Labour’s campaign has consistently focused on investment and growth, with particular attention to electrification and motor manufacturing. Nothard advocates for measures to support the transition to electrification, including accelerating the creation of charging infrastructure and providing direct assistance for purchasing used EVs.
The used EV market needs to function normally to achieve the government’s zero-emissions goals. More investment is required for manufacturers switching to EVs to remain competitive. Additionally, Nothard stressed the need for the new government to focus on training within the remarketing sector and the wider industry. Skills shortages must be addressed to ensure the future development of the motor industry.
Although these measures might not be immediate priorities for the new administration, they are essential for the success of the remarketing sector. The VRA hopes to understand Labour’s plans for these areas to better prepare for the anticipated changes and support the industry’s transition.
Home Charging is Crucial Over the Next Few Years
Paul Tomlinson, co-founder of Cord, highlighted the importance of encouraging home charging for electric vehicles. He pointed out that financial benefits of EV ownership are undermined if drivers depend on public charging. On average, drivers could spend an extra £92-£138 monthly relying on public charging, negating savings over petrol or diesel. To address this, Tomlinson suggested measures such as eliminating VAT on home chargers and ensuring tenants have the right to install them.
Home charging is far more economical, with off-peak tariffs making driving cost as little as £17 a month. In contrast, public charging can raise the cost significantly, up to over £100 a month. By making home charging accessible, EV ownership can become more affordable and widespread. Tomlinson also called for reducing the cost of purchasing EVs, suggesting that the UK should leverage its post-Brexit freedom to avoid imposing tariffs on Chinese EVs.
Improving Britain’s Roads for Heavier EVs
Nicholas Lyes, Policy and Standards Director at IAM RoadSmart, underscored the need for infrastructure improvements to support the heavier weight of EVs. He welcomed the new government and stressed that road safety issues like potholes, high fuel prices, and insurance premiums need urgent attention. Lyes pointed out that progress in reducing serious and fatal road collisions has stalled, and more must be done to create safer, more affordable roads.
IAM RoadSmart advocates for introducing Graduated Driving Licences for new drivers, a measure that has successfully reduced fatalities in other countries. With road traffic crashes being a leading cause of death among the under-25s, improved road safety should be a top priority for the new government. Lyes called for immediate action to address these critical issues to ensure safer roads for all users.
Unleashing the Power of Small Businesses
Amanda Powell-Smith, CEO of Forster Communications, highlighted the significant role small businesses play in the UK economy. She pointed out that SMEs account for around three-fifths of employment and half of the private sector’s turnover. Powell-Smith advocated for recognising the agility and innovation of small businesses as a unique strength, enabling quick response to new business models and solutions that work for both people and the planet.
Powell-Smith stressed the importance of maximising the knowledge and ideas of small business leaders, who are at the heart of their communities. These leaders are well-positioned to devise relevant and effective solutions for addressing climate change and driving social justice. The focus should be on empowering SMEs to contribute to the new economy, leveraging their experience and insights to build a sustainable future.
The sweeping win of Labour in the elections has created a significant buzz among business leaders who are hopeful yet cautious. They see avenues for improvement and growth, especially in key areas like financing for SMEs, talent development, and the shift to electric vehicles. The coming years will be crucial to see how Labour’s promises translate into action and tangible benefits for the business community.