The long-awaited Labour manifesto, delivered yesterday by Kier Starmer, sets out a mission statement of creating the most pro-growth and pro-business treasury this country has ever seen.
“Wealth creation is our number one priority,” Starmer enthused at the manifesto launch. “If you take nothing else away from this today, let it be this.”
Although a large Labour majority may allow the party to follow through with its promises, a marginal, more fractured victory may leave more room for uncertainty.
Starmer promised a rare combination at the manifesto reveal – being both pro-worker and pro-business. In truth, it’s a great strapline, but arguably harder to deliver, as evidenced by the at times fractious relationship between Starmer and the unions that have traditionally thrown their weight behind a Labour leader.
The business community has been courted by Labour for some time now. The contents of Labour’s manifesto suggests that business has been listened to, with wealth creation being a key stated objective of an incoming Labour government.
No-drama Starmer, or policy surprises on the way?
Labour has been courting British business for months now – the only question is, if Labour gets in, which version of Labour will British business get? Will it be “no-drama Starmer”, or is there a hidden agenda?
Given Labour’s caution in the run up to the election, it would, presumably, be unlikely that any post-election policy surprises will be revealed. But only time will tell. The Shadow Chancellor, Rachel Reeves, has said she has no plans to increase capital gains tax. But some uncertainty remains as to Labour’s precise treatment of capital gains, if it wins office.
Growth among startups and SMEs will be essential to growing the UK economy. The Labour pledge to reform the British Business Bank, including a stronger mandate to support growth in regions across the UK, sounds like a welcome promise to give SMEs’ easier access to capital.
Additionally, Labour’s vow to work with universities to support access to finance for spinouts is welcome. But, it doesn’t go far enough in detailing exactly how a Labour government plans to achieve this.
On AI and the balance of regulation
There’s no getting away from it – AI also needs to be a priority for the next government. Labour has made a good start in promising to ensure an industrial strategy is in place to support the development of the AI sector.
Starmer also pledged to create a new Regulator Innovation Office, which will seek to cope with the dramatic developments of new technologies.
Historically, the UK has taken a lighter touch regulation approach. Although this has helped to maintain competitiveness, there is a balance to be struck between the security and safety that comes with regulation of AI, versus the hindrance on innovation that an overbearing regulatory framework can bring.
The broader challenge creating a high growth ecosystem
As a country, our next government needs to focus on how we are going to grow our economy. The high growth ecosystem is an essential part of this puzzle.
We’ve seen a statement of intent from the Conservatives for the UK innovation economy to start here, stay here, and IPO here. But, we will need to see how either party supports UK equities as a means to bolstering the economy.
Labour has expressly declared its commitment to wealth creation. We hope it does so in a business-supportive way. The indications from the contents of Labour’s manifesto are positive, but there’s a long road ahead for turning them into a reality.
Simon has practised company and corporate finance law since qualifying in the City in 1994. In his role at Marriot Harrison, he advises directors, investors, public and private companies, financial advisers and intermediaries on their corporate matters, based on his experience of equity financings, corporate restructurings, M&A, stock market admissions, corporate governance and City Code, Listing and Prospectus Rules and financial services matters in respect of company fundraisings.
