What can small businesses expect from the new government?

For the first time in 14 years, the UK has a Labour government, and it was the promise of change that helped get them into power.

If you weren’t too dazzled by all the crowns and carriages, the King’s Speech offered a first glimpse of what that change might actually mean for small businesses. 

We sat through it, so you didn’t have to. We’ve waded through the 39 draft bills that ministers want to pass in the next parliamentary session and pulled out the ones that could have an impact on small business owners and landlords. 

The headlines for small businesses

National Wealth Fund Bill 

A new National Wealth Fund will invest £7.3bn in infrastructure and green industry throughout the UK, with the aim of driving additional private sector investment. The government’s hope is that it should also simplify support for businesses by aligning the UK Infrastructure Bank and the British Business Bank, which supports growing SMEs by improving their access to finance. 

Employment Rights Bill

If you’ve got people on the payroll, look out for this bill, expected to be brought to Parliament within the first 100 days. The Employment Rights Bill will:

• ban zero-hour contracts, giving workers the right to contracts that reflect the number of hours they usually work and giving them reasonable notice of any changes in shifts
• remove employers’ ability to ‘fire and rehire’ as a way to change workers’ terms and conditions
• make parental leave, sick pay and protection from unfair dismissal available from day one
• remove the lower earnings limit and waiting period for Statutory Sick Pay 

Living Wage 

In addition to the Employment Rights Bill, the government said it would deliver a ‘genuine living wage’ accounting for the cost of living and will remove the age bands to entitle all adult workers to the same living wage.

Pension Schemes Bill 

This will introduce new rules and requirements to help increase the amount available for private pension savers and provide higher retirement incomes. The government has said that this bill “could help an average earner, who saves over their lifetime in a defined contribution scheme, to have over £11,000 more in their pension pots”.

Product Safety and Metrology Bill 

This bill seeks to provide regulatory stability for manufactured products on a UK-wide basis. It will give the government new powers to update laws and regulations to:

• respond quickly to new technologies like AI and lithium-ion batteries
• regulate sellers on online marketplaces to protect consumers
• recognise new or updated EU product regulations to prevent additional costs for businesses 
• end recognition of some EU product regulations

Great British Energy Bill

The goal of this bill is to lower energy bills for individuals and businesses, and to meet the government’s pledge to deliver ‘clean’ power by 2030. They will establish Great British Energy (GBE), a new publicly owned ‘clean’ power company headquartered in Scotland. GBE will work in partnership with the private sector to encourage the transition to green energy and invest an initial £8.3 billion in renewable energy. 

Skills England Bill

Skills England will be a new organisation operating in England to help ensure the workforce has the skills that the economy needs. It will take on some of the responsibilities of the Institute for Apprenticeships and Technical Education (IfATE), including:

• addressing skills shortages
• reforming the apprenticeship levy
• recommending which training should be eligible for the new Growth and Skills levy
• making sure that a mix of government-funded skills training is available to learners and employers

The headlines for landlords 

As housing policy is devolved in Scotland and Northern Ireland, these bills will primarily affect England and Wales - the Scottish and Northern Irish Parliaments may choose to introduce similar measures.  

Planning and Infrastructure Bill 

A big focus for Labour’s campaign was around reforming the planning system to deliver more housing. This bill aims to:

• increase planning authorities’ capacity
• modernise planning committees to improve decision-making
• reform compulsory purchase compensation rules

Renters’ Rights Bill

This bill sets out to increase protections for tenants, including by:

• abolishing Section 21 no-fault evictions
• empowering tenants to challenge rent increases
• giving tenants the right to request a pet which landlords must consider and not unreasonably refuse (landlords can request insurance to cover potential damage from pets)
• applying a Decent Homes Standard to the private rented sector

Here’s what to look out for in future announcements

While that sounds like plenty to keep the new Parliament busy, there were some other manifesto pledges which were not covered in the King's Speech. Labour’s Plan for Small Business covered several areas where small business owners can expect to see future policy announcements: 

• Late payments legislation to “ensure small businesses and the self-employed are paid on time”
• Replacing the business rates system “with a new system that will level the playing field between the high street and online giants”
• Boosting small business exports by removing barriers and providing better support
• Reforming procurement rules to give small businesses a fairer chance at public contracts

We’ll find out more about the government’s tax and spending plans in the Budget on Wednesday 30th October. New Chancellor, Rachel Reeves, has indicated some taxes will have to be raised while reiterating that VAT, National Insurance and Income Tax would not be increased. Pre-election pledges also included publishing a roadmap for business taxation to help businesses plan ahead, as well as capping Corporation Tax at 25% and keeping the full expensing system and annual investment allowance. 

Is this the change small businesses are looking for?

You don’t exactly get a lengthy honeymoon period as a new government (we didn’t even make it to August before the first government rebellion). So they will hope the early priorities they’ve outlined chime with the priorities for business owners. But the devil will be in the fine detail that will follow as the draft bills become laws and the tax and spending plans are fleshed out.   

When we surveyed our customers before the election for our Small Business Monitor, the legislation small business owners wanted to see included:

• Lowered business taxes for freelancers and small businesses (70% of respondents)
• A greater crackdown on tax evasion/avoidance by multinational businesses (55%)
• The introduction of more statutory protection for self-employed, like pensions, sick leave and maternity pay (39%)
• More financial aid and/or incentives for people starting a business (33%)
• Scrapping IR35 - or 'off-payroll' - legislation (29%)

The Federation of Small Businesses also wanted the government’s day-one priorities to include “swift new action on late payment”. Not surprising, when our research found that one in four business owners have felt their business was in jeopardy due to late payments and nearly half of those surveyed would be in favour of making the Prompt Payment Code mandatory for all businesses. 

Tackling the scourge of late payments and giving greater statutory protection for the self-employed come up again and again as key issues for business owners, along with making tax easier and fairer and cracking down on tax avoidance. Hopefully that message is coming through clearly for our fresh-faced new intake of MPs because getting to grips with these issues could give a major boost to entrepreneurs, helping them to grow their businesses and revitalise the wider economy.

If we’ve whet your appetite for draft legislation, you can read the full briefing on the government’s website. And if you want more small business news and insights from FreeAgent, why not take a look at our blog and sign up to our mailing list?