Most Important King's Speech in Recent Times?

July 2024 David Morgan

The recent election of the Labour government in the UK has significant implications for the job market. With Sir Keir Starmer as the new Prime Minister, Labour's victory marks the first Labour government in 14 years, bringing an anticipation of stability and a clear legislative direction.

Since the election, the Labour government has made several statements and commitments regarding the job market:

New Deal for Working People:

Labour has pledged to reform workers' rights, including banning zero-hour contracts, enhancing protections against unfair dismissal, and ensuring sick and parental leave from day one of employment. They aim to introduce sectoral collective bargaining and fair pay agreements, starting with a pilot in the social care sector.

Economic Growth and Job Creation:

Labour has emphasized their goal to make the UK the fastest-growing major economy by the end of their first term. This includes plans to reform job centres and career services to help more people get back into work.

Support for Businesses:

The Labour government has also focused on creating a pro-business environment to stimulate job creation. This includes investments in infrastructure and housing, which are expected to generate new employment opportunities.

Addressing Health and Mental Health:

Recognising the impact of health on employment, Labour has outlined plans to tackle health and mental health challenges to help people stay in or return to work.

However

Business sentiment in the UK for 2024 is mixed. While some businesses remain cautious due to ongoing economic challenges, such as high borrowing costs and the legacy of inflation, there is also a notable sense of optimism.

According to a recent survey by J.P. Morgan, 43% of business leaders are optimistic about the UK economy, while 32% are pessimistic, and 25% hold neutral views. This indicates a balanced outlook, with many businesses expecting growth despite the uncertainties.

And our recent poll of candidates supports this sentiment following the election.

Labour's Vision

Labour's manifesto emphasizes "wealth creation" aimed at enhancing living standards for working people. This includes increased investment in training, skills, technology, and infrastructure to boost productivity. However, the specifics of how these policies will directly benefit small businesses and contractors remain somewhat vague.

Challenges and Opportunities

The past 18 months have been particularly challenging for contractors due to a combination of factors, including the legacy of COVID-19, the reversal of the IR35 repeal, reduced funding, and cautious hiring across most sectors. These challenges have led to a cautious approach from organisations, with many only planning projects six months in advance.

Labour's Economic Policies

Labour's economic policies focus on increasing public spending and encouraging enterprise investment. However, there is a concern that these policies may not translate into immediate job opportunities for contractors. The party's commitment to "wealth creation" sounds promising, but concrete measures to support small businesses and contractors are still needed.

Public Spending

Labour’s 2024 manifesto pledges increased public spending, but this may not directly translate to more NHS jobs. Labour aims to deliver an extra 40,000 weekly operations, scans, and appointments in England, potentially improving IT systems to meet this target.

Outgoing Chancellor Jeremy Hunt announced plans to boost NHS productivity through IT upgrades, AI, and modern technology. If Labour continues these plans, more public sector opportunities, especially in health, could arise. However, large Systems Integrators often dominate, using permanent employees or contractors or offshoring.

Stability and Future Planning

The new Labour government is expected to bring stability, which could encourage UK companies to invest more confidently in their technology stacks1. This stability is crucial for contractors who have faced uncertainty and reduced project commitments from clients in recent years.

Conclusion

While Labour's victory brings hope for a more stable and investment-friendly environment, we will need to wait for more detailed policies and measures to see how they will be directly impacted. The focus on wealth creation and productivity is promising, but the specifics of support for small businesses and contractors are still to be clarified.

This newsletter aims to provide a concise overview of the potential impacts of the new Labour government on contracting in the UK. Stay tuned for more updates as policies and their implications for the sector become clearer.

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