Upcoming UK Election in 2024: Examining Potential Impacts of a Labour Government on Venture Capital, Start-ups, and Entrepreneurs
The Labour Party has unveiled its Business Partnership for Growth manifesto, outlining a series of policies aimed at fostering a more integrated, innovative, and sustainable business environment.
Industrial Strategy
The Labour Party is committed to investing significantly in infrastructure, with a particular focus on the green economy. A National Wealth Fund will be created to invest in key sectors such as ports and supply chains, gigafactories, the steel industry, carbon capture, and green hydrogen. The British Business Bank will also have its mandate widened to include supporting growth in the regions and nations.
Labour's industrial strategy will be directed by a statutory Industrial Strategy Council, and the party has sector plans for financial services, automotive, life sciences, creative industries, and artificial intelligence (AI). The government aims to reduce barriers to trade by progressively aligning with EU single market rules in certain sectors, which would help ease regulatory burdens and facilitate smoother trade and market access for businesses.
Business Taxation
While direct details on tax policy are limited in the manifesto, there is a clear emphasis on supporting fair pay and ensuring economic policies that balance the needs of workers and business affordability. Supporting SMEs and diverse business models like mutuals and co-ops suggests tailored tax and support incentives aimed at those businesses to strengthen the venture ecosystem.
Skills and Workforce
The manifesto underlines tackling economic inactivity through employer partnerships that focus on inclusive, value-led cultures in SMEs. Labour’s commitment to raising living standards includes continuing to increase National Minimum and Living Wages, which affects workforce skills investment by promoting fair pay and productivity growth, benefiting businesses that rely on a skilled and fairly paid workforce.
Investing in structural barriers such as transport, childcare, and flexible working arrangements aims to enable a better functioning workforce, directly supporting employment growth and workforce participation. The Labour Party also plans to introduce an Employment Bill in the first 100 days of government, which includes proposals for early stage companies.
Regulation and AI
The Labour Party plans to introduce AI regulations on the handful of companies developing the most powerful AI models. The party has not yet indicated whether they will take forward changes to the National Security and Investment Act (NSIA) that the current government had been considering.
Conclusion
The Labour Party's Business Partnership for Growth manifesto promotes an inclusive and diversified venture ecosystem by fostering cooperative business models, easing trade barriers with the EU, implementing a major infrastructure plan, supporting fair wages, and enhancing employer-led workforce development with particular support for SMEs. These policies collectively aim to create a more integrated, innovative, and sustainable business environment addressing industrial strategy, tax fairness, and workforce skills. The specific policies that a Labour government may put in place, if it wins a mandate on 4 July, are yet to be seen.
- The Labour Party's strategy for financial services includes plans to invest in sectors like artificial intelligence (AI), with the aim of reducing barriers to trade by aligning with EU single market rules in certain sectors.
- To strengthen the venture ecosystem, the Labour Party's industrial strategy proposes tailored tax and support incentives aimed at Small and Medium Enterprises (SMEs) and diverse business models like mutuals and cooperatives.
- In a commitment to a more integrated, innovative, and sustainable business environment, the Labour Party plans to create a National Wealth Fund to invest in key sectors such as green hydrogen and carbon capture, as well as implement measures to support fair wages and inclusive, value-led cultures in SMEs.
- The Labour Party also proposes regulations for AI,aiming to control the development of powerful AI models by a handful of companies, and has plans to introduce an Employment Bill in its first 100 days of government, which includes proposals for early stage companies.
