19 June 2024 – The banner the Labour Party carries for the next Parliament is the party of wealth creation.
To emphasise this cause, a third of the Labour Manifesto 2024 was focused on uplifting the economy and empowering businesses throughout the country.
Improved finance options for SMEs
As expected, the Labour Manifesto provided a section for small businesses and the self-employed.
New regulations are promised to assure SMEs and the self-employed of timely payment.
Labour also vows to make exporting more accessible for SMEs while introducing reforms to the British Business Bank. This will incorporate a mandate to make capital more available for small and medium-sized enterprises.
Meanwhile, procurement rules for government contracts will be adjusted to accommodate these businesses.
The party of wealth creation also recognises how the current business landscape disincentivises investment. To combat this, they pledge to replace the current business rates systems to ensure a rise in revenue for all businesses.
Labour also promises to maintain the permanent full expensing system for capital investment and the annual investment allowance for small businesses. To encourage better investment decisions, a new Labour government would provide guidance to outline what qualifies for allowances.
Reforms to taxation
Labour has great news for the working masses. The party promises no increase in taxes for employees. In other words, rates for the basic, higher, or additional rates of Income Tax, National Insurance, or VAT will not be raised.
Corporation tax will be maintained at 25%, the lowest in the G7.
The intention behind this is to introduce changes to the planning system. Once these are implemented, Labour optimistically thinks this will make it easy to obtain building permissions while trickling down powers for transport, skills, housing, and planning to local authorities.
Enhanced support for local talent
The current labour and skills crisis is terrible news, not just for medium to large enterprises. In fact, SMEs face more challenges as they have no choice but to rely on a foreign workforce to keep operations going.
One in eight young people are not in education, employment, or training, with those lacking good qualifications and with poor mental health facing particular disadvantages.
Labour Manifesto 2024
To encourage young Brits to enter the workforce, the manifesto promises access to training, an apprenticeship, or support to find work for those 18 to 21 years old.
It also pledges two weeks of work experience for every young person and an initiative to improve careers advice in schools and colleges.
A better post-16 education is in the works, according to the manifesto.
Furthermore, Jobcentre Plus and the National Careers Service’s combined effort will ensure support before and after employment. This effort will ideally be responsive to local employers, inclusive for all users, and work in partnership with other local services.
Labour to reorganise immigration policies
The Labour manifesto also focused on the high immigration levels, which have more than tripled since the last election. It promises to reduce net migration to reduce the long-term dependency on foreign workers.
To achieve this, the Migration Advisory Committee will spearhead a basis for a multi-agency collaboration with skills bodies, the Industrial Strategy Council and the Department for Work and Pensions.
The points-based immigration system will also be reformed to ensure a fairer selection process. This new and improved system will centre on integrating immigration and skills policies.
Overall, the Labour’s manifesto exhibits a well-rounded albeit generalised approach for the next Parliament. Based on current polls, a focus on improved investment and support for SMEs, taxation reforms, and a solution to the employment crisis is proving effective for many voters and business owners.
Our verdict on the Labour Manifesto 2024
Anyone who expected a lot of detail in Labour’s manifesto was disappointed. However, a party that is so far ahead in the polls probably can afford not to be too specific.
But that doesn’t mean that the manifesto document doesn’t give you an idea of how small businesses will fare under a Labour government. The first thing that strikes me is the focus on wealth creation.
Now that’s not something that you would expect from a Labour manifesto. However, given the cost-of-living crisis and the state of our economy, it’s certainly something many people will welcome. And if people are better off, they will spend more money, including with UK’s small businesses.
The manifest does seem to promise to tackle some of the biggest challenges companies in the UK face. Late payments, skills and labour shortages and the business rates system are all areas where small businesses have said they want to see action.
Promising not to raise corporation tax, income tax, NIC and VAT will be welcomed by small businesses too. Especially because Labour is often accused, probably not without reason, of funding their policies by raising taxes.
Of course, there are still other taxes that might be raised in the next parliament, but it’s good to know that at least these are out of bounds.
All in all, I would say this isn’t a manifesto small businesses have to fear. It looks like Sir Keir recognises the need to support small businesses, and is prepared to make sure they can thrive to grow our economy.
