What can businesses expect from the general election?
Hello and welcome to the latest edition of Off to Lunch…
How fast the world moves. To think that yesterday started with this:
…and ended with this:
Rishi Sunak announced on Tuesday evening that the general election will be on July 4th. Even cabinet ministers were reportedly left in the dark about the prime minister’s surprise news.
Today, the general election campaign officially kicks off.
But what are Labour and the Conservatives promising to do for businesses? The answer is rather murky.
Starmer outlined his party’s first steps seven days ago:
And here are Sunak’s promises from early last year:
The PM has also started using these three phrase as footers for his social media graphics in the last few weeks:
But neither of the parties has submitted manifestos for public scrutiny yet. Keir Starmer has provided no clear tax guidance other than promising to keep taxes as low as possible. Earlier this week the International Monetary Fund warned that high levels of government borrowing mean that more tax cuts are not an option for the UK. This may have encouraged Sunak to call a July election rather than wait, given it suggested there was no possibility of pre-election giveaways by the government, but it also highlights the challenge facing the new administration.
On the topic of corporation tax, Labour said in February that it would not raise it above its current rate of 25 per cent. Rachel Reeves also promised to build on measures brought in by Jeremy Hunt at the spring Budget. This includes full expensing, which allows companies to claim back investments in IT and machinery by writing it off against tax on their profits.
The Conservatives are rumoured to be putting a cap on immigration numbers. This complements their recent promise to tighten rules on dependants, which is estimated to bring net immigration down by 300,000. This move has been heavily criticised by many business leaders who worry about the knock-on effect on the talent pool.
Labour has already committed to scrapping the Rwanda asylum scheme but also to implementing an Australian-esque approach to tackle skills shortages. The party also promised to introduce new training plans and requirements for key occupations.
Labour’s mission document hints at the difficulty of the line between being pro-worker and pro-business…
Labour is back serving working people and that means a recognition that when there is economic chaos, it is working people that pay the heaviest price. And that is unacceptable.
We have worked up our plans in partnership with business, with the purpose of kick-starting growth everywhere and making working people in all parts of the country better off.
Labour will build a genuine partnership with business and civil society - sleeves rolled up, working for the national interest.
Business groups have been posting their official reactions this morning. Rain Newton-Smith, director-general of the CBI, said:
Whoever forms our next government can’t tackle these momentous challenges alone – they will have to partner with business to harness the insights, innovation and optimism needed to deliver real and lasting change.
Our members want to see politicians having grown-up conversations about how we foster the investment we need to have a labour market which delivers higher living standards and make the UK an attractive place to run and grow business. It’s critical that these issues that will affect the UK’s long-term growth prospects are reflected meaningfully in the debate over the next six weeks.
Martin McTague, national chair of the Federation of Small Businesses, says:
The hard-working voters running the UK’s 5.5 million small firms are a large and motivated section of the electorate. A further 16 million voters are employed by small businesses.
There will be fierce competition for their votes at this election, and those competing will need a convincing plan to bring down the cost of doing business, support small businesses to grow, and create the right conditions to encourage new businesses to start up.
Regardless of the outcome, it’s going to be a historic result. It’ll either be the biggest comeback in early polling history or the biggest swing of votes ever. As we prepare for the first July election since 1945, the only thing that stands out is how neither of the major parties loves providing details…
Podcast…
The latest episode of the Business Leader podcast looks into the story behind Manchester-based travel company Travel Counsellors and why it might be the company with the best reviews in the UK.
Steve Byrne, the long-serving chief executive, explains why customers and staff rate it so highly, why you may not have heard about the company until now, and why it has ambitious plans for the future.
You can listen to the episode on Substack here, Spotify here and Apple here
Other stories that matter…
1. One company that was less than enthused to hear the PM’s election plans yesterday was NatWest. The bank’s plans for a multibillion-pound mass market sale of the government’s stake have been dashed by the news. You can read more here.
2. The head of the Post Office during the Horizon IT scandal has said that she was unaware that people were being wrongly prosecuted. Paula Vennells added that she had been misled by her staff about the safety of the prosecutions of branch operators. You can read more here.
3. Hargreaves Lansdown has rejected a takeover bid from a consortium of private equity investors including CVC and Abu Dhabi’s sovereign wealth fund. The company’s share price saw a surge after confirmation of the news. You can read more here.
4. Another Bristol-based darling is fighting off takeover talk. Semiconductor firm Graphcore has revealed its intention to cancel its share premium account. Speculation is that the move will give the company wiggle room to fight off an attempted takeover from SoftBank. You can read more here.
5. Nvidia has reported record quarterly revenue. Investors can’t get enough of the AI chip maker, which has gained more than $1.1trn in value this year alone. The company brought in $26bn in revenue in the first quarter of fiscal year 2025, up 18% from Q4 and up 262% from a year ago. The company also announced a 10-for-1 stock split. You can read more here.
And finally…
Yesterday’s announcement from Rishi Sunak has teed up an all-encompassing six weeks of non-stop election coverage. However big national events like this are when X users take centre stage for some much-needed comic relief. Here are a few of my personal favourites:
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