What are Labour’s pledges for businesses and governance?

09 July 2024

The newly elected Labour government has made several manifesto pledges that, if accomplished, should help small businesses, for example by improving access to finance. Key aspects that are expected to impact UK businesses are as follows:

• the Labour government has pledged to set up a £250 billion UK National Investment Bank along with a network of Regional and National Development Banks to provide small businesses and innovators with more choices for funding. To facilitate this, the government intend to utilise the Post Office network;
• Labour also plans to establish a new Business Development Agency: a one-stop shop to support small businesses and promote SMEs in government procurement, as well as improve access to government contracts. Additionally, there will be greater flexibility in how businesses can utilize the Apprenticeship Levy, measures to combat tax avoidance, and stronger enforcement of workers’ rights and the minimum wage;
• Labour will scrap the requirement of mandatory quarterly tax reporting under the Making Tax Digital (MTD) programme that has faced criticism for creating an unnecessary administrative burden on small businesses, with a turnover below the VAT threshold of £85,000;
• Labour plans to stop offshoring carbon emissions by shifting from measuring the UK’s production emissions to measuring consumption emissions. This may well have a significant impact on sustainability reporting in due course;
• the new government is expected to strongly support pushing through audit reforms including the creation of the Audit, Reporting and Governance Authority (or ARGA), first announced by the Conservatives in 2019. This is a proposed new Audit regulator for the UK to replace the Financial Reporting Council, with stronger powers. Realistically many commentators believe it is unlikely that the transition will take place until at least 2026;
• Labour has committed to reforming competition, as well as the corporate governance regimes to ensure corporate governance frameworks embed long-termism, enable investment and ensure greater action in the interests of their workers, customers, communities and the environment;
• the Labour government is expected to appoint an Independent Economic Crime Commissioner to ensure accountability across government departments and substantially enhance the UK’s defences against and response to economic crime; and
• Labour also intends to change employment law to enhance working people’s lives by increasing individual and collective rights under its Plan to Make Work Pay.

Answer provided by Ollie Garrod ACA

Document downloaded on 12-07-2024 from Croner-i Navigate, the UK’s leading online research service for tax, audit and accounting professionals. Find out more at www.croneri.co.uk or call 0800 231 5199.

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