All eyes are on the upcoming July 4 general election, with the Conservative and Labour parties ramping up their campaigns to lure voters, especially from businesses.
The general election is fast approaching, and beyond their viral battles on TikTok, the two main parties are battling it out over the economy – more than usual – as Labour looks to seize the advantage over the Conservative Party.
In fact, according to the polls, Labour will win the 2024 election and could see a Tory wipeout, as found by the first YouGov survey since the election was called. Sir Keir Starmer may take power with the biggest Labour majority in 100 years.
Who is the Party of Business?
The makeover of Labour’s outward appearance since the last general election has been accompanied by a “fervent romancing of business,” as aptly described by The Economist.
Such ‘romancing’ has been fairly successful, following a publicly-signed letter of support from 121 founders and chief executives across key industries. They all claim that Labour has changed and “wants to work with business” on long-term growth. The Conservatives have been keen to point out that said letter included no signatories from chief executives of the UK’s largest FTSE 100 companies.
But what about small businesses? New polling revealed in this blog suggests that the national vote is split. In a brand new study by QCF, thousands of small business owners across the UK were recently asked which of the two main political parties would be better for their business.
Following over 500 hundred responses, preliminary data from the Quality Company Formations 2024 UK Small Business Survey reveals a close call, with 52% of respondents voting Conservative and 48% Labour.
While the Tories come out on top, the results reflect an upward swing for Labour and, underlying that, a significant shift in public perception around the party’s economic credentials.
With regards to finances, Starmer is fighting a Conservative institution that has historically (and successfully) presented itself as the Party of Business. At the same time, just five years ago, under a potential Corbyn government, the Labour Party managed to scare off huge sections of the UK business community.
What do they stand for?
We live in a Great Britain whose tax burden is at its highest since World War Two, beleaguered by the public spending fallout caused by the pandemic and the 2022 energy price surge. With this in mind and the cost of living still biting, many UK voters are thinking with their wallets more than usual.
The Prime Minister, Rishi Sunak, says he wants to axe all social security contributions paid by workers by scrapping payroll tax, which Labour contends is unworkable. Starmer has promised not to raise income tax or Corporation Tax on company profits, planning instead to charge Value Added Tax on private school fees and to tax the overseas income of British residents who claim non-domiciled status.
More broadly, how both parties intend to improve public services and finances without increasing taxes remains unclear. The Tories have pencilled in future public spending cuts, in light of what they anticipate as future gains in productivity across the public sector. Labour, meanwhile, promises to end under-investment in infrastructure, and improve public services in areas vital for faster economic growth.
Following the bond market meltdown triggered by the Truss government, Sunak and the Chancellor, Jeremy Hunt, set new budget rules in 2022. The main one is a requirement that public debt falls as a share of gross domestic product in the fifth year of official forecasts, something the government is on course for. Labour wants to keep this debt target.
In terms of green policy, Starmer aims to decarbonise the power system by 2030, five years before The Conservatives. He seeks to build new onshore wind farms, create a state energy firm, and a national wealth fund to invest in green technologies.
As for labour market policies, Labour plans to heavily restrict zero-hours contracts, increase sick pay and give new hires more protection against dismissal. It also wants to promote more flexible working arrangements and renege on laws that restrict trade union activities. The Conservatives say that such plans will only cost jobs and lead to more strikes.
