Labour secures victory in UK general election – industry reaction

8th July 2024

Sir Keir Starmer has become the UK’s next prime minister after Labour secured a majority in last week’s general election. The results showed that the Conservative party saw its number of MPs fall to the fewest in its history.

Commenting on the result, David Postings, Chief Executive of UK Finance said “I’d like to congratulate Sir Keir Starmer, Rachel Reeves and the rest of the Labour Party on their general election victory.  Labour have described financial services as one of the UK’s greatest success stories and said they will champion the sector. This level of political support is extremely welcome.

“Throughout the election campaign economic growth has been front and centre of the debate. Financial services has a vital role to play here, both as a major employer and through the support it provides to consumers and businesses up and down the country.”

Ian Somerset, Chief Executive of Money Wellness said “This new government has the chance to turn the page on financial inequality in the UK. We appreciate there isn’t a bottomless pot of cash to address the UK’s problems. But measures to reduce the inherent unfairness in society don’t have to cost the earth, for instance, introducing better financial education in schools and scrapping the outdated and stigmatising Individual Insolvency Register. And where there is a cost, we believe it’s time to shift the burden from those most likely to be crushed by it to those with the broadest shoulders.”

Simon Webb, Managing Director of capital markets and finance at LiveMore said “’Landslide victory’ are the clear watchwords for this election. But as Labour settles in the new watch word will need to be affordability. Labour’s manifesto prioritised maintaining current stamp duty exemptions for first-time buyers but has made no mention of extending this exemption to other buyers. Leaving older buyers trapped in large houses they can’t downsize from and locking younger buyers out. Regardless of how the new government plans to address the housing crisis, it is crucial that they listen to the industry first for guidance.”

Ed Rimmer, CEO at Time Finance said “The finance industry in recent times has been witness to a rumbling sense of apathy from SME owners, with many businesses either not knowing where to turn for finance or have been too cautious to explore their options. Today we hope to see many of these firms reevaluating their position and hitting the ground running with a newfound optimism to take their business forward.

“A new Labour Government needs to keep the promises it has made to SMEs in their manifesto. From exposing late payers to unlocking the supply of finance for businesses looking to grow, it is vital for the new government to demonstrate their commitment to SMEs. They need to focus their time on assisting businesses to market effectively, encouraging investment into the country and helping to develop new trade strategies, which will hopefully inspire SMEs with the courage and confidence to expand their business and help rebuild the country. 

“When it comes to the economy, simply put, the country needs stability. Interest rates need to continue to fall further to unlock working capital for UK businesses and allow intermediaries and the wider finance market to bring solutions to businesses to help them achieve their goals, and though we have reached the target for inflation, our new Chancellor should focus on getting it below 2%.”

Theo Chatha, Chief Financial Officer, Bibby Financial Services said “The Labour party now has an opportunity to drive economic growth through the UK’s resilient small and medium sized business community, and to support them in boosting output. But first, they must address key areas of concerns for SMEs, and access to finance is an area that requires attention.

“We know that for many SMEs, high street banks remain the first and only port of call, so there’s a strong opportunity for Labour to increase competition in the commercial lending sector and to enable SMEs to access a wider range of options.

“That’s why we were encouraged to see Labour commit to strengthening the British Business Bank’s Bank Referral Scheme in January. But clearly, more still needs to be done to make it work effectively. Despite much effort from the British Business Bank and the designated platforms and lenders, the number of businesses the scheme has supported since its launch in 2016 has been hugely disappointing.

We would urge this government to develop a new scheme that includes input from a wider array of SME funders and commercial finance brokers, to ensure that the initiative delivers for SMEs. This would ensure Labour gives SMEs more choice and agency over how they finance themselves to grow and thrive.”

Jonathan Geldart, Director General at the Institute of Directors, said “I would like to congratulate the Labour Party on their seismic result at the General Election. The IoD looks forward to working with the new government to create a resurgent UK economy in which individual companies and directors have the confidence to invest and grow.”

“During the election campaign, we have been impressed by the willingness of Labour to work in partnership with business. It is essential that this positive relationship continues, and that the new government places wealth creation at the forefront of its priorities.

“In order to reignite economic growth, the new Government must urgently address some key challenges. Labour and skills shortages are persistent issues for our members. The UK needs to regain and accelerate its position of leadership in the transition to a net zero future. And an industrial strategy which unlocks private investment is needed in order to build long-term confidence in UK economic competence and stability.

“The new government is rightly committed to embedding higher standards of conduct and ethics into public life. It is equally important that the UK business community regains the esteem of wider society. We hope that the new government will work with the IoD in making the UK’s corporate governance framework fit for the future and help it roll out our planned code of conduct for directors.”

Rain Newton-Smith, CBI Chief Executive, said “Congratulations to Sir Keir Starmer and the Labour Party. Delivering sustainable growth should be the defining mission for the new government. Business stands ready to bring its innovation, ideas, and investment to make that shared mission a reality.

“The new Prime Minister has been given a clear mandate to take the tough decisions on areas like planning reform and boosting grid capacity needed to get the economy firing on all cylinders. What firms need now is a government that’s ready to hit the ground running and is laser-focused on delivery.

“Households and businesses across the UK have shown incredible resilience through Brexit, Covid and war in Europe. With the economy picking up steam, now is the moment to get behind growth. Setting out a positive vision for the UK economy and leaning into our international leadership should be top priorities for the first 100 days.

“Building a partnership for prosperity between government and business holds the key to unlocking a revitalised pitch to global investors. By working with business, the new government can deploy the capability and capacity of industry to deliver the connected transitions across net zero, the digital economy, and the future of work needed to put the economy on a pathway to sustainable growth.”

Director General of the BCC, Shevaun Haviland said “Congratulations to the Labour Party on their victory after a long and hard-fought campaign. The public have delivered them a clear and decisive parliamentary majority – hopefully they will use this mandate to provide the stability and certainty businesses crave.

“How we revitalise our economy was hotly debated throughout the past six weeks, and it is encouraging to see they have many policies which clearly align with our recommendations.

“But after a gruelling election the really hard work starts now. We need to see action from day one on pulling together a coherent industrial strategy for the long-term, which places a strong emphasis on harnessing green innovation.

“Closing the skills gap, growing exports, boosting productivity and harnessing the power of AI won’t happen overnight. And businesses will also want to see early movement on pledges around business rates reform and improving our trade relationship with the EU.

“None of this will be easy, and our new Government should not be expected to do it alone. But our entire Chamber Network and the 51,000 businesses it represents will be ready to put their shoulders to the wheel and help. If our firms succeed, then our communities prosper, the economy grows, and the wealth needed to support our public services is created.”

John Boulton, ICAEW Director of Policy, said “As Sir Keir Starmer’s government takes office, it must act decisively to instil stability and resilience into the economy.

“It’s the right time for audit and corporate governance reform to be prioritised. Reliable, trusted reporting by companies is not ancillary to economic stability, but fundamental. By legislating for the creation of the new regulator and equipping it with statutory powers to take action against company directors, the government will ensure the UK remains a trusted location for investment and will reduce the risk that a major institution fails unexpectedly.

“Action on the local audit backstop is an essential first step to rebuilding confidence in local authority finances, and we call on the new government to consider it as an urgent priority. We hope the government will move rapidly to establish the UK as the green finance capital of the world. There’s great potential to build on the country’s strengths in this area, and an early commitment to endorsing the ISSB’s standards would be a strong starting point.

“Additionally, we think a comprehensive review of the business rates system could help unlock economic growth and invigorate our high streets. We look forward to working with the new government to help them deliver on their manifesto promise to unlock stronger economic growth.”