What can businesses expect from the new government?

In the weeks running up to the general election, our teams of specialist experts have been considering what changes could arise from a new government and specifically, what they might mean for businesses.

So, what could the new government mean for businesses?  

Reviewing the party’s manifesto indicates what the new government may do for businesses, and we have grouped these insights into the major areas below.


Labour says it will: 

  • cap Corporation Tax at the current rate of 25%  
  • not raise National Insurance, VAT or Income Tax 
  • replace the current business rates system to ‘level the playing field between the high street and online giants’ 
  • provide clarity on what qualifies for allowances 
  • strengthen HMRC’s powers to tackle tax avoidance 
  • abolish non-dom tax status 

Businesses can also expect ‘one major fiscal event a year, giving families and business due warning of tax and spending policies’. This will probably mean one annual budget, rather than a spring and autumn budget, or any ‘mini budgets’ like we saw under Liz Truss’ leadership.  

Workers’ rights 

The Labour Party says it will introduce the following as day 1 employment rights:  

  • parental leave 
  • sick pay 
  • protection from unfair dismissal 

Labour will also ban ‘exploitative’ zero-hours contracts, and end fire and rehire – where employers fire workers and re-hire them immediately on different terms. This tactic is often used where changes to contract terms cannot be agreed. 

A Single Enforcement Body will be created to ensure these employment rights are upheld.  

National Minimum Wage 

The Labour Party says it will remove age bands from the National Minimum Wage, so all adults are paid the same. Currently, there are different pay bands depending on the age of the worker.  

To make the minimum wage ‘a genuine living wage’, Labour will ‘change the remit of the Independent Low Pay Commission’ so it ‘accounts for the cost of living’. 

Small and medium-sized enterprises (SMEs) and self-employed people 

Labour says it will take action on late payments, which often create issues for SMEs and the self-employed.  

For SMEs specifically, Labour pledges to: 

  • improve guidance and remove barriers to exporting 
  • reform the British Business Bank to include a stronger mandate to support growth in the regions and nations, which will make it easier for SMEs to access capital 
  • reform procurement rules to give them greater access to government contracts 

Workplace pensions 

According to its manifesto, Labour will: 

  • ‘act to increase investment from pension funds in UK markets’ 
  • ensure that workplace pension schemes take advantage of consolidation and scale to deliver better returns for savers 
  • ‘undertake a review of the pensions landscape to consider what further steps are needed to improve pension outcomes and increase investment in UK markets’ 

Overseas workers 

The immigration points-based system will be reformed ‘with appropriate restrictions on visas’. In addition, a Labour government will: 

  • ensure migration addresses skills shortages 
  • end long-term reliance on overseas workers in industries like health and social care and construction 

Employers who breach rules on overseas workers will be banned from hiring workers from abroad.  

Young workers 

Labour says it will establish Skills England to ensure the workforce has the skills industries need. 

Further education colleges will be turned into specialist technical excellence colleges, which will work with businesses, trade unions and local government to provide young people with skills and job opportunities.  

The Apprenticeship Levy will be replaced with a Growth and Skills Levy. 


To deliver on its commitment to equality, Labour will: 

  • take action to reduce the gender pay gap 
  • introduce a Race Equality Act, which will enshrine in law the full right to equal pay for Black, Asian, and other ethnic minority people 
  • keep the protections set out in the Equality Act 2010, including the implementation of its single-sex exceptions 

Labour will support disabled people by: 

  • introducing the right to equal pay 
  • improving employment support and access to reasonable adjustments 
  • tackling the Access to Work backlog 
  • making sure people can try out a job without fear of an immediate benefit reassessment if it does not work out 

Business innovation 

The manifesto states Labour will ensure it will: 

  • support the development of the artificial intelligence (AI) sector. However, there will also be regulation on the most powerful AI models – sexually explicit deepfakes will be banned 
  • remove barriers to new data centres 
  • create a National Data Library to ‘bring together existing research programmes and help deliver data-driven public services, whilst maintaining strong safeguards and ensuring all of the public benefit’ 
  • scrap short funding cycles for key research and development (R&D) institutions and replace them with 10-year budgets 
  • create a new Regulatory Innovation Office to help regulators get to grips with innovations and speed up approval timelines 

National Wealth Fund 

A recurring theme in the Labour Party Manifesto is the creation of a National Wealth Fund. This fund can expect to receive £7.3 billion over the course of the next Parliament.  

The Labour Party says it will allocate the following from this fund: 

  • £1.8 billion to upgrade ports and build supply chains across the UK 
  • £1.5 billion to new gigafactories so our automotive industry leads the world 
  • £2.5 billion to rebuild the steel industry 
  • £1 billion to accelerate the deployment of carbon capture 
  • £500 million to support the manufacturing of green hydrogen 

Roads and railways  

Roads and train infrastructure is central to some businesses, such as those in the haulage sector. However, all businesses are affected by this to some extent as employees rely on the roads and trains to get to work.  

Regarding roads and cars, Labour says it will: 

  • fix 1 million potholes across England in each year of the next Parliament – this will be funded by deferring the A27 bypass 
  • investigate the sizeable increase in car insurance policy costs 
  • roll out more charge points for electric vehicles 
  • phase out new cars with internal combustion engines by 2030 
  • support buyers of second-hand electric cars by standardising the information supplied on the condition of batteries 

Labour has said it will also bring Britain’s railways into public ownership by taking over contracts with suppliers that expire or are broken through failure to deliver.  


Labour will create Great British Energy, a new publicly owned company with £8.3 billion in funding over the next Parliament.  

Great British Energy will: 

  • deliver clean power by ‘co-investing in leading technologies’ 
  • drive down electricity costs for individuals and businesses, increasing their competitiveness 

Labour plans to work with the private sector to, by 2030: 

  • double onshore wind 
  • triple solar power 
  • quadruple offshore wind  

Labour will also invest in carbon capture and storage, hydrogen and marine energy.  

A strategic reserve of gas power stations will be kept to ‘guarantee security of supply’. New licences to explore new oil fields will not be issued.   

Clean energy developers will be rewarded with a British Jobs Bonus. This will incentivise firms to offer ‘good jobs’ and build their manufacturing supply chain in industrial heartlands and coastal communities.   

A new Energy Independence Act will be passed to underpin Labour’s energy strategy.  

Agriculture and farming 

In support of the agriculture sector and farming communities, Labour says it will: 

  • set a standard for half of all food purchased in the public sector to be locally produced or certified to higher environmental standards 
  • introduce a land-use framework and ‘make environment land management schemes work for farmers and nature’ 
  • work with farmers and scientists on measures to eradicate Bovine TB so that the badger cull can end 

Next steps  

It is worth bearing in mind that a manifesto is what a party wishes to implement. We will have to see what is included in the King’s Speech, which is a key part of the State Opening of Parliament where the government outlines its priorities.  

The State Opening of Parliament is set for 17 July. We will update you again after that.  

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