2024 Election Result - A Labour Landslide and the Reaction for SMEs

The political landscape of the UK shifted on the night of Thursday 4th July. With all votes from the 2024 general election counted, Sir Keir Starmer’s Labour Party has secured a landslide victory, ending 14 years of Conservative rule.

This outcome marks a significant change in direction for the country, with immediate and long-term implications for small businesses. In this article, we summarise the key results and explore the implications for British SMEs.

A Night of Significant Results

Rishi Sunak, the outgoing Prime Minister, endured a catastrophic night for his Conservative Party. Labour triumphed with upwards of 400 seats, reminiscent of Tony Blair’s overwhelming win in 1997. Sir Keir Starmer, now Prime Minister-elect, declared: "Change begins now".

Former PM Liz Truss lost her seat, along with other senior Tories including Penny Mordaunt, Grant Shapps and Jacob Rees-Mogg. Jeremy Hunt, the outgoing Chancellor, narrowly retained control of his constituency but has since left Downing Street after losing his place in the Cabinet.

The SNP, which had a firm hold on Scottish politics for years, lost dozens of seats. A former MP described the outcome as "cataclysmic."

The Liberal Democrats celebrated a successful night, securing over 70 seats, their best performance in a century. This triumph included symbolic victories in Conservative heartlands, claiming the seats of former Prime Ministers David Cameron and Theresa May. The Lib Dems’ strategy of targeting constituencies where they had previously finished second appears to have paid off, despite their overall share of the vote remaining similar to 2019’s election.

Meanwhile, Reform UK and the Green Party each won four seats, marking their best election performances yet. Nigel Farage finally succeeded in securing a seat in the Commons on his eighth attempt, leading Reform in a bid to fill what they described as a "vacuum" on the centre-right of British politics. Green co-leader Carla Denyer expressed satisfaction with the result, emphasising their role in holding Labour to account in Westminster.

Independent candidates, including former opposition leader Jeremy Corbyn, made their mark. Corbyn triumphed in Islington North, running on a pro-Palestinian platform that resonated with voters in the London borough.

Global leaders have reacted to the UK’s political shift with congratulatory messages for Sir Keir Starmer. French President Emmanuel Macron expressed a commitment to continued cooperation, while Ukrainian leader Volodymyr Zelensky and Israeli Premier Isaac Herzog highlighted hopes for strengthened ties with the UK.

What Does This Mean for SMEs?

As the dust settles on the general election, small business owners are left to contemplate the impact of the incoming change in Government, which brings both opportunities and uncertainties.

Market Reaction

Despite the historic nature of the election results, financial markets have remained relatively stable. The pound and the stock market edged up slightly on the morning of Friday, 5th July, indicating that investors were well-prepared for the outcome.

This stability is a positive sign for small businesses in the UK, providing a sense of predictability in an often volatile market.

Policy Shifts

Labour's victory promises a shift in policies that could directly affect British SMEs. Keir Starmer’s administration is expected to focus on economic revitalisation, with potential increases in public spending and support for local businesses.

Small businesses may benefit from increased access to funding, grants and incentives to boost innovation and employment.

Taxation

Potential tax changes will be a key area of concern for small business owners. However, Labour has historically advocated for higher taxes on larger corporations, which might translate into increased support for SMEs.

Labour Market

The new Government’s policies are likely to emphasise job creation. Initiatives aimed at improving workforce skills could benefit small businesses and address shortages. Any changes to employment law or minimum wage will need careful consideration to balance business sustainability with fair labour practices.

Richer Diversity

The general election results also highlight a shift towards more diverse political representation for the UK. With more female MPs elected than ever before and a notable increase in the number of successful independents, the composition of the new Parliament reflects a broader spectrum of voices.

This diversity could lead to more comprehensive debates and policies considering the needs of small businesses of all shapes and sizes.

Looking Ahead

For small business owners, the key takeaway from this general election is the need to stay adaptable. The new Government will likely introduce policies to foster economic growth and stability, but the specifics will unfold in the coming weeks and months.

Engaging with local business groups, keeping abreast of developments and proactively seeking support could be essential strategies.

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