In our last Blog on 10th July on this subject, a few days after Labour won power, we discussed the Country “voting for change”, the hopes of the new Labour Government, and what this might mean for businesses over the coming months and through this next parliament. We follow up today on the first three months of the Labour government coming to power, what we have seen, and the impacts that are already being felt, or are yet to come.
Sir Kier Starmer in his September Labour conference speech recently said “Change must mean nothing less than national renewal” and he and his cabinet colleagues have been trying to instil a sense of optimism around the state of the UK economy, following some doom-mongering early on. The doom-mongering talked about the broken NHS, the £22 billion black holes in the finances, cuts to winter fuel allowances for most pensioners, talk about tax rises, and a general “oh my goodness” reality check of what do we do now.
And the promise to bring a government “laser-focused on delivering the needs of working people” has been somewhat undermined by unnecessary sleaze around accepting corporate hospitality invitations, donations for designer clothes and spectacles, and free gratis use of properties in the UK and overseas. Does nothing change, one might ask? Well, we hope things will change, and for the better.
Change has been happening, and Starmer is citing settling the NHS doctor’s strike, approving new solar projects and offshore wind farms, planning reforms, stopping no-fault evictions, creating a new National Wealth Fund, and legislation to renationalise the railways as a start. They are also setting out their key priorities, number one being boosting economic growth, alongside reforming the NHS, securing Britain’s borders, improving education, and shifting to clean energy.
The Chancellor has a budget fast approaching, which is expected to include tax rises and spending cuts to deal with the “£22 billion black hole”, at least part of that arising from the settlements for the doctors and the railway pay settlements (£9 billion). It is also likely to see revisions to how the Country’s finances are measured and increased borrowing to support capital projects. Since taking office the Chancellor has warned of difficult decisions on tax, spending and benefits. So how does Labour balance boosting economic growth while raising taxes, encouraging businesses to invest, while taking more from businesses in a bigger tax take? We will find out in the next few weeks, and for many, it will be painful.
Fixing foundations appears to be a key theme being banded around at the moment. This is also a key message for businesses to focus on at this time. To have the confidence to manage change, implement change, and deliver change programmes, you do need to have good foundations. Businesses and shareholders should also be prepared for some additional tax consequences, given that the Labour Government has narrowed its flexibility around where it can raise taxes without breaking manifesto promises.
Now is definitely the time to take steps to both ensure your business maximises the opportunities that a change in government can bring and to mitigate some of the consequences that are being sign-posted ahead of the Budget at the end of October. As we said last time, take the bull by the horns, be proactive, and embrace change for the better. Look at your foundations, whether that be your governance, your management information, your systems and controls, your operational infrastructure, your IT capability, or your people. Take stock, assess what you need to do better, change, restructure, refocus or stop doing, and then plan to do something about it.
If you’re facing transformational challenges, or just don’t know where to start, contact us for a confidential chat. Together, we can achieve positive outcomes for the future of your business. Here at Brighter Consultancy, we are experts in helping you manage change for the better.