What businesses can expect from the new Labor government

With Sir Keir Starmer leading Labor into Downing Street after a landslide victory, businesses are ready to navigate a new political landscape.

However, the honeymoon period may be short-lived as Labor inherits deep-seated economic problems and faces immediate industrial crises.

Thames water

Labour’s previous pledge to renationalise the water industry, a sector that urgently needs £270 billion of investment by 2050, puts Thames Water in the spotlight. With Ofwat’s decision on Thames Water’s business plan looming, a difficult outcome could force the government to intervene, possibly overseeing a debt-for-equity swap or appointing special administrators.

Royal mail

Czech billionaire Daniel Kretinsky’s proposed £3.6 billion takeover of Royal Mail will be scrutinized by Labour. With promises to protect workers and explore new models of governance, Labor faces opposition from unions and the right-wing media. The acquisition is also subject to review under the National Security and Investment Act.

Port Talbot

The future of Tata Steel’s Port Talbot plant is another pressing issue. Tata’s decision to close blast furnaces and install electric arc furnaces has faced backlash from unions and parliamentarians. The new government must develop an industrial strategy to support the sector, although Tata’s commitment remains uncertain.

China and EU trade

Labor aims to stabilize and improve trade relations with the EU and navigate the complex dynamics with China. The party will try to negotiate a better partnership with Brussels, without rejoining the single market or the customs union. An audit of Britain-China relations will be launched to better understand and respond to the challenges and opportunities.

Business rates

Commercial property tax reform is high on Labour’s agenda, with business rates a top priority for employers. While Labor is promising to create a level playing field for major retailers, the details of how this will be achieved remain unclear. Possible reforms could include taxing out-of-town department stores, although these measures may not fully ease the burden on traditional retailers.

Labour’s approach to these challenges will be crucial in shaping its relationship with business and determining Britain’s economic future.