BRACHER RAWLINS | The Labour Government: “Change begins now”

Assessing the impact of the General Election 2024

The result from the 4^th July General Election 2024 was not a surprise for many – but what are the implications of the new Labour Government now the dust has started to settle? And will we really see changes to legislation in the first 100 days, as promised?

Of course, we still need to see the changes unfold, but we have summarised some of the most significant proposals the Labour Party presented in their manifesto, which may impact our clients in the commercial world.

Employment

Labour’s manifesto mainly reiterated their commitment to fully implement the “New Deal for Working People” first put forward in 2022. The proposals in this green paper can be found in full here but we’ve summarised some of the key changes from this and their manifesto, below:

Introducing certain employee rights from Day One of employment such as unfair dismissal (after probation), sick leave and parental leave
Banning “exploitative” zero hours contracts (note not an outright ban but aiming to end the abuse of these schemes)
Reform of “fire and rehire” – where employers dismiss and then rehire employees under new, often less favourable, contractual terms
Introducing a “right to disconnect” – empowering employees to switch off outside working hours and not be contacted by their employer
Introduction of “menopause action plans” for companies with over 250 employees
Enhancing rights for employees undergoing the TUPE process
Ban unpaid internships (other than when forming part of education)
The possibility of introducing paid carers leave (subject to consultation)
An introduction of rewards for whistleblowers

Commercial property & planning

Commercial property investors and occupiers are hoping above all that the Labour Government can deliver a stable and growth-conducive environment. This, along with reduced inflation and signs of the economy picking up provide a cautiously optimistic outlook. But what impact will the following key pledges have on the commercial property sector?

Leasehold reforms – Labour plans to simplify and reduce the cost of extending leases and to ban new leasehold houses.
The government will imminently release an updated draft NPPF, focusing on enhancing the presumption in favour of sustainable development and reversing the changes introduced in December 2023.
“Get Britain building again” – Labour has pledged to build 1.5 million homes and re-introduce mandatory housing targets for local planning authorities removed by the Conservatives. They also commit to fast-tracking the approval of brownfield sites and identify “grey belt” land (such as defunct car parks) which will be subject to strict development rules. While mainly focused on housing, this may also provide opportunities for commercial property developments.
The new Government has also promised a 10-year infrastructure plan, slashing planning related red tape and making it easier to build laboratories, digital infrastructure and gigafactories.
Compulsory purchase compensation rules will be reformed to ensure landowners are awarded fair compensation “rather than inflated prices based on the prospect of planning permission.”
Renter’s reform – the Labour Government plan to implement the previously axed Renter’s Reform Bill which would end no-fault evictions for tenants and enable them to challenge rent rises.
The government will tax overseas buyers an extra 1% in stamp duty (SDLT), which may in turn affect demand from overseas investors.
They will also introduce the funding for one new planning officer per local authority to try and speed up decision makings and help galvanise the property market.

Corporate & Commercial

Businesses and organisations are of course also hoping for increased opportunities for growth and economic stability under the new government. People welcome Labour’s commitment not to increase VAT, income & corporation tax, and national insurance, but the door remains open on matters such as business rates. Labour’s key proposals include:

Reforming the business rates system – While corporation tax remains unchanged, with a promise to keep it at 25% for the duration of this parliament, changes to business rates will come but the detail of this is not yet clear. Rates are expected to be altered to try and level the playing field between small, high-street businesses and larger, online competitors.
A new tax roadmap will, however, retain the full expensing regime and maintain capital allowances, R&D tax credits and the patent box regime.
The government has announced the creation of a £7.3 billion National Wealth Fund, a policy bank that will invest to help deliver on government policies. The Fund will focus on investing in ports, giga-factories, the steel industry, carbon capture and hydrogen. The Labour Government is also likely to revive co-investment models with the private sector.
Increased regulation particularly for utilities providers, gambling companies and across some consumer products. The Government has also proposed a Regulatory Innovation Office which would aim to help regulators across sectors implement changes, shorten approvals and work together on regulatory issues.
The government will introduce the Digital Markets, Competition & Consumer Act, ushering in a new regulatory regime for digital markets and granting substantial new powers to The Competition & Markets Authority. Labour’s manifesto also mentions separate regulation for AI.

How can we help?

The change of government after 14 years of Conservative rule comes at a crucial time for the UK, with the opportunity to make significant changes across many sectors, but it’s “watch and wait” for now, as the coming weeks will reveal more detail on legislative priorities.

If you would like to discuss any of the aspects covered in this update, please feel free to get in touch on (0) 207 404 9400 or email info@bracherrawlins.co.uk.