What could the General Election 2024 mean for small businesses? – Small Business UK

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Prime Minister Rishi Sunak has called a General Election for July 4, 2024.

What does it mean for small businesses and what do they want to see? Small Business hears from the experts.

Cashflow and funding

Easily the biggest issue for small business owners, they’ll be looking at what each of the parties is saying around funding and cashflow.

Mike Randall, CEO of Simply Asset Finance, said: “The ‘Growth Guarantee Scheme’ announced in the Chancellor’s budget in March was a positive move as the Recovery Loan Scheme (RLS) had already served a valuable purpose, giving SMEs access to a record £5.3bn to date. However, with the new scheme only lasting until March 2026, businesses will once again be on a time-limit for support. 
 
“That’s why we hope politicians prioritise a comprehensive industrial strategy that goes beyond political affiliations and puts the needs of small businesses first, particularly given they make up 99.9 per cent of the UK business population.

“For us, measures that address unpaid invoices and streamline access to public contracts will forge SMEs more certainty and the ability to plan for the future. We also hope to see the next government do more to address regional disparities in business support. This will allow businesses across the whole of the UK to realise their potential.”

Health and wellbeing

With many small business owners struggling with mental health difficulties, support in direct and indirect ways will be crucial to this part of the voting population.

Gary Parsons, Leadership Mental Health Advocate & Inspirational Speaker at Gary Parsons UK commented: “I see the upcoming General Election as a crucial moment to prioritise mental health. Government spending must address the mental health and wellbeing needs of not just employees and citizens, but also the leaders who drive our economy. Investing in their mental health is vital for a resilient and productive society.

“Let’s use this election to transform our business landscape, ensuring leaders are fully supported in their personal and professional growth.”

Employment law

In 2024 alone, we’ve seen plenty of changes to employment law, with the potential for more to come.

Katie Elliott, director at HR Katie commented: “The Labour Party’s current manifesto could significantly impact businesses of all sizes. The proposed reforms to workers’ and employment rights will create a busy period for HR professionals as businesses will need to more carefully evaluate the feasibility of hiring decisions under these new regulations.

“One of the key changes is the plan to grant full employment rights to all workers from their first day, which will lead to many questions about the right way forward for businesses of all sizes.”

Kevin Fitzpatrick, UK MD of Employment Hero, said: “It has been a challenging time for SMEs and the unexpected calling of a General Election only adds to the uncertainty. Despite positive indicators in the economy following yesterday’s inflation data, SMEs will be looking forward to more stability and policy certainty post-election.

“It’s too early to make the call, however polling suggests that Keir Starmer is likely to be the next Prime Minister. Labour is yet to release its official manifesto, but it’s already promised a new deal for working people. We can expect fresh thinking about regulation and planning, the removal of obstacles that stifle business growth, and better access to finance to make Britain a hub for new SMEs.

“Businesses shouldn’t allow the election outcome to decide their future plans. Now is the time for growth.”

HR firm, Peninsula, reviews what would happen around employment law for the main two parties.

Conservatives win re-election

If the Conservatives win re-election this should continue as planned, with the following changes already having been announced:

  • Neonatal care leave and pay
  • Reform of industrial action laws
  • Back to Work plan, including proposed reform of fit notes
  • Reform of the umbrella company market
  • Continuation of the National Disability Strategy
  • Reintroduction of employment tribunal fees
  • Reform of non-compete clauses
  • TUPE reform
  • Address the definition of ‘sex’ in the Equality Act 2010

“There are further Bills currently being debated including the Paternity Leave (Bereavement) Bill, Bullying and Respect at Work Bill, Fertility Treatment (Employment Rights) Bill and the Unpaid Trial Work Periods (Prohibition) Bill. It remains to be seen which, if any, of these would become law should the Tories remain in power,” they said.

Labour wins

“The Labour party manifesto has laid out approximately 60 changes to employment laws that they would look to bring in,” said Peninsula. “They have also pledged to bring about these changes within 100 days of taking office. We don’t know what that would look like in practice, whether consultation periods on draft bills would happen within the 100 days or if they would be looking to push through the end legislation.”

These are the main areas of change that business owners should be aware of should Labour win the election:

  • Day one rights – removing the qualifying periods for basic rights such as unfair dismissal, sick pay, and parental leave, so they would become day one rights
  • Establishing a single status of ‘worker’, thereby removing the current distinction between employees and workers. Under this plan, all workers would be afforded the same basic rights and protections around sick pay, holiday pay, parental leave, protection against unfair dismissal, etc.
  • Strengthening existing rights and protections, including for pregnant workers, whistleblowers, workers made redundant and those subject to TUPE processes.
  • Raising wages for workers – various commitments including continuing raising the National Living Wage, immediately increasing minimum wage to at least £10 per hour for all workers who are not already at that rate, reforming the role of the Low Pay Commission, ensuring travel time is paid in sectors with multiple working sites, acting on ‘sleep over’ hours in sectors such as social care, banning certain unpaid internships, and creating Fair Pay Agreements
  • Increasing Statutory Sick Pay and making it available for all workers, including those currently excluded because of low wages
  • Acting to close gender, disability and ethnicity pay gaps, permitting equal pay comparisons across employers where comparable work is carried out, and introducing mandatory publication of ethnicity pay gap for all firms with more than 250 staff
  • Requiring employers to create and maintain workplaces and working conditions free from harassment, including by third parties
  • Making flexible working a default right from day one, with employers required to accommodate this as far as is reasonable
  • Family friendly protections – extending statutory maternity and paternity leave, introducing a right to bereavement leave, making it unlawful to dismiss pregnant employees for six months after their return from maternity leave except in specific circumstances, and reviewing the shared parental leave system
  • Strengthening the rights of workers to respond to family emergencies with paid family and carer’s leave, flexible working, and a greater ability for workers to enforce their rights
  • Zero hours contracts – banning ‘one sided’ flexibility, ensuring anyone working regular hours for 12 weeks’ or more gets the right to a regular contract that reflects the hours they work, a requirement for all workers to get reasonable notice of any change in their shifts or working time, and recompense for cancelled shifts
  • Fire and rehire – improving the information and consultation procedures, and adapting unfair dismissal and redundancy legislation to prevent workers being dismissed for not agreeing to less favourable contract terms
  • Raising awareness of neurodiversity and reviewing workplace provisions for stress, mental health and long Covid
  • Introducing a new right to disconnect and protection for workers from remote surveillance
  • Strengthening the trade union right of entry to work places, simplifying the process of union recognition, strengthening the protections for trade union reps, and introducing a new duty on employers to inform the workforce of their right to join a union
  • Extending the time limit for bringing employment tribunal claims and removing the compensation caps

Innovation

AI is certainly a point of contention for small businesses. Some are adopting it to boost productivity while others are unsure about what its widespread use will spell for the future of their firms.

Dr Roeland Decorte, CEO and founder of Decorte Future Industries, hopes that the government prioritise AI:

“What we as AI entrepreneurs are hoping to see is a government that continues to take a cautious and balanced approach to regulation, and one that doesn’t just do the easy work of talking to big tech, but also the hard work of engaging directly with, and listening to the UK startups that will form the backbone of a healthy domestic AI economy.”

In fact, innovation is a talking point for a few entrepreneurs. David Holt, Partner and IP Solicitor at Potter Clarkson, said: “A common-sense and ‘light touch’ approach to regulation of inventions in industries such as biomanufacturing will be welcomed by innovative businesses across the country looking to take their products and services to market, and this should be prioritised by the next government.

“For example, in the biomanufacturing space, there is a risk that heavy-handed regulation could prevent UK companies from exploiting their existing competitive advantage.” 

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