Closing the skills gap, growing exports and investing in innovation on business post-election wishlist

Shevaun Haviland, Director General of the British Chamber of Commerce pledged to work with the new government to boost the economy, urging it to use “this mandate to provide the stability and certainty businesses crave”.

Haviland cautions businesses “need to see action from day one on pulling together a coherent industrial strategy for the long term, which places a strong emphasis on harnessing green innovation”.

“Closing the skills gap, growing exports, boosting productivity and harnessing the power of AI won’t happen overnight,” she says.

“And businesses will also want to see early movement on pledges around business rates reform and improving our trade relationship with the EU. If our firms succeed, then our communities prosper, the economy grows, and the wealth needed to support our public services is created.”

Unlocking UK’s economic potential and wealth opportunities remain priorities

The Institute of Directors (IoD) says the election outcome “offers an opportunity to rebuild trust and unlock the UK’s latent economic potential”.

IoD’s Manifesto for Business blames a sharp slowdown in productivity for the country’s growth problem, with the International Monetary Fund (IMF) forecasting 0.6% growth for the UK in the year ahead.

“In absolute terms, the UK’s labour productivity is 28% lower than that of the United States, 14% lower than Germany and 13% lower than France,” it said.

Jonathan Geldart, Director General at the IoD, says he “looks forward to working with the new government to create a resurgent UK economy in which individual companies and directors have the confidence to invest and grow”.

Addressing the labour and skills shortage that remain persistent issues for members, developing an industrial strategy to attract private investment and accelerating the UK’s leadership in the transition to a net-zero future would help business flourish.

IoD’s Manifesto for Business advocates for increased UK research and development (R&D) expenditure and widening the scope of the full expensing regime, with a focus on investment incentives for green and digital skills technologies. “The current official target for UK R&D is 2.4% of GDP by 2027, which is insufficiently ambitious,” it says. “The Government has pushed back its commitment to spend £22 billion on public R&D until 2026/27.”

Any new regulatory measures must not “exert a disproportionate burden on SMEs or place UK business at a competitive disadvantage” and the independent monitoring role of the Regulatory Policy Committee should be strengthened.

Equally, it was vital any regulatory obstacles are removed to encourage business uptake of AI technologies. But a UK framework that delivered central oversight across regulators would address emerging risks and regulatory gaps. “AI and related technologies are potentially game-changing productivity drivers for the UK economy,” IoD says.

Future proofing the UK's corporate government framework remains a priority. “The new government is rightly committed to embedding higher standards of conduct and ethics into public life,” Geldart says. “It is equally important that the UK business community regains the esteem of wider society. We hope that the new government will work with the IoD in making the UK’s corporate governance framework fit for the future and help it roll out our planned code of conduct for directors.”

Landslide election victory a “golden opportunity to plant the seeds of small business growth”

The Federation of Small Business (FSB), Policy Chair Tina McKenzie, says the election outcome gives “hope that political stability can lead to economic stability and recovery”.

“There’s a golden chance in the first 100 days of this new administration to plant the seeds of small business growth, and there are a range of policies FSB hopes the new Government will bring forward,” she says.

“These include measures to ease the cost of doing business and support investment and expansion. From tackling poor payment practices by big businesses to their smaller suppliers to reforming the not-fit-for-purpose business rates system.”

McKenzie believes the upcoming King’s Speech should include a Small Business Bill to enshrine in legislation changes that support small firms and self-employed people.

“We’re looking forward to getting down to business and working in partnership with the new Government ministers and their teams – building on how we’ve engaged constructively with them in Opposition. This will ensure that the small business voice is heard clearly and the right actions can be taken to support existing entrepreneurs and encourage new ones.”