This is what the new Labour government’s economic policies could mean for British businesses and UK plc
Alex Schulte, 5 July 2024
With a 170-seat majority, the incoming Labour government has a unique opportunity to hit the ground running and pursue a mandate for change. For the business community, this result signifies a moment of real opportunity after a decade of difficulties with Brexit, Covid and unstable Conservative party leadership.
Centuro Global joins other startups in wishing the new Cabinet the best in finding a path through the country’s current deep-seated economic challenges on the road to growth and innovation. We hope Labour will make good on their manifesto’s commitment to boosting investment in R&D, lifting up AI development and forging a ‘pro-innovation regulatory framework’.
While there is optimism, though, Labour must urgently clarify its plans to reform the immigration and visa system. If the government is truly serious about spurring economic growth, something must be done to help the skills-intensive businesses that have been so damaged by the onerous system recently introduced by the Tories.
The business community needs decisive action and clear, growth-friendly policies. Any delays will hinder the confidence that is so immediately needed to lift the UK’s low levels of investment.
Overall, we are cautiously optimistic. A moment for positive change has finally arrived, and If Labour can deliver on its promises, the future for UK businesses looks bright. Let’s grab this opportunity by the bullhorns and create a supportive environment for the entrepreneurs and enterprises who drive this country’s economy forward.
Labour’s key business policies unpacked
Immigration:
The Conservative government hiked the minimum pay for skilled overseas workers to £38,700 – a whopping £12,500 increase from the previous threshold and £3,700 above the median UK salary! This has had a chilling effect on recruitment, with companies withdrawing job offers from new, young hires. If multinational behemoths like KPMG, HSBC, and Deloitte can’t make it work, the effect on innovative and budget-conscious startups further down the chain will be alarming.
Labour’s proposal to raise the minimum wage will significantly raise businesses’ OpEx, particularly in retail, hospitality and other sectors with higher concentrations of low-wage workers. While aiming to improve living standards, this policy will compel companies to re-evaluate their financial strategies to handle increased payroll expenses. We all agree that certain forms of immigration control are necessary. But a truly strategic immigration regime would not impose the kind of cliff edges we’ve seen in the last two years. Businesses need a more balanced policy that nurtures talent and allows our unicorn firms to thrive. Otherwise, the end of the Winter recession might turn out to be just another false dawn.
That’s why we’re collecting the signatures and testimonies of businesses affected by the Skilled Worker visa restrictions. We’ll present a report to the incoming government later in the year, detailing the pain that the 2024 rule changes have caused businesses and urging them to reconsider. You can join our campaign and add your voice here.
Worker’s rights and the right to switch off:
An always-on culture is unhealthy. It’s also a false economy – burnt-out, unhappy workers aren’t productive workers. This applies no matter the size of your business or where your workforce is based—after all, work-life balance is universal.
Labour plans to introduce a right for workers to ‘switch off’ from work. In a digital world of work, this shift to flexible and fluid patterns would extend to a wide range of communication channels beyond email. While the sentiment of supporting a healthy work-life balance should be well-received by all, the policy could be problematic for businesses to manage. To prioritise productivity, executives must consult with teams to agree on clear boundaries, policies and procedures. Ambiguity spells dysfunction.
As a company with a global workforce based across multiple jurisdictions, we’re particularly interested in how these rules can realistically work in practice. Countries including France, Spain, Portugal, and Belgium are already adopting varieties of the right to disconnect. This piecemeal implementation will affect companies that operate across the EU Single Market. Inconsistent legislation across closely interconnected, multinational regions will pose new challenges for hiring, HR practices, workplace culture, and operational efficiency.
From a UK perspective, British businesses should pay attention to the experiences of their peers in those countries that have already launched these schemes. It’s time to start trialling policies that naturally limit working hours and emphasise a better work-life balance – but fall short of an official right to switch off. This will show staff and potential hires that you value their downtime, but will ensure a more straightforward transition if and when this legislation comes into force.
AI, R&D and innovation:
We’re excited by Labour’s tech-focused policies. New data centres, long-term R&D funding and reformed, centralised regulators. for new technologies are among the key tech policy commitments in the manifesto.
The last ten years have been a really successful period for UK tech This week, it emerged that the UK has surpassed China for tech startup funding. Last year, the UK was front and centre of the windwide movement for AI safety when we hosted the global summit at Bletchley Park. To build on these wins, the Prime Minister is pledging to boost AI development and create a ‘pro-innovation regulatory framework’ to end business uncertainty, turbocharge output and boost economic growth.
As well as pushing forward innovation at home, we hope to see a reset in brittle UK/EU relations. This would make it much easier for multinational firms to comply with the nascent but fragmented international landscape around AI regulation.
Centuro Global is calling on the new government to reconsider the restrictions placed on the Skilled Worker visa route. Add your voice to our campaign here.
