How Has Labour Affected SME’s?

By Sam Horton, Senior Recruitment Consultant, Emmerson Kitney

How Has Labour Affected SME’s?

As an SME over the last five years, we have had Brexit, Covid and the Ukrainian War to overcome…. After a period of uncertainty The UK has now gone through a change in government, but what does this mean for SME’s?

One change that has already occurred is an increase in minimum wage which means as an SME you must pay a minimum salary of £23850 on a 40-hour contract, putting real constraint on SME’s where cashflow and short-term performance are vital!

According to The Cover’s article “The new government has promised to introduce new legislation and regulatory reforms designed to significantly benefit small business and it has won the backing of business leaders including Dragon’s Den investors Deborah Meaden and Theo Paphitis. Its plans include, for example, better access to banking services and stamping out late payment of invoices.”

Labour have also said they will:

• Make the UK the best place to start-up and scale-up by unlocking the supply of finance for businesses looking to grow
• Open up competition to public contracts, giving small businesses the fairer chance they deserve
• Stamping out late payments of invoices
• Opening up contract opportunities so it’s easier and fairer for SME’s
• Addressing the current skills shortages
• Clean energy projects which help decrease energy bills for small businesses

Labour are also due to make changes that will affect employees’ rights which are highlighted below:

• Strengthening employee rights
• Changes to current sick pay policies
• Changes to current zero-hour policies
• Changes to Temporary and self-employed regulations

Although this will be a welcome change for many employees it does mean that small businesses will need to ensure their hiring processes are stringent due to the high demands of working in an SME that often needs employees to come in and add to the bottom line quickly.

As stated above the coming months will see what changes Labour implement for Small Businesses alongside how the economy performs with many factors affecting SME’s such as mortgage rates, supply costs, Ukraine and energy costs.

If you would like a business health check or to discuss how Emmerson Kitney can assist with your business requirements, please don’t hesitate to contact our team.