Navigating Change: UK General Election's Industry Impact
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As the UK braces for the upcoming general election, businesses across the United Kingdom are evaluating the potential outcomes and their implications. As a founding partner of ClientWindow and a Chartered Accountant, Tim Zeale discusses what could be on the horizon for tech companies and the financial services sector.
The announcement of the UK general election on 4 July 2024 wasn’t exactly a huge surprise to many people, even if we weren’t expecting the exact timing of it. At the time of writing this, the BBC Poll Tracker has Labour on an average of 40% or 42%, with the Conservatives tracking at 20% or 22%. Although with the TV debates now underway, and a variety of news stories, things are still very much in a state of flux. An election battle is about to commence and whatever way you look at it, there will certainly be policy shifts in the months to come.
Technology & Innovation:
Tech companies have the odd juxtaposition of needing to be both agile and innovative whilst also needing clear regulatory frameworks to succeed. AI is of course a hot topic. The current government created the AI Safety Institute, which seemed to explore what type of regulation is required and if a light-tough response would be appropriate. Labour seem keen to be seen as pro-business although Keir Starmer has spoken about responsible technology and said regulation around AI was too slow. Labour's suggestion is to create a new ‘regulatory innovation office’ to push through advancement in both tech and its regulation with a new strategy to use everyday AI throughout the public and private sectors.
The election could also impact the FinTech sector, as different parties may have varying attitudes to the use of technology in financial services. That said, it could also be a time of great opportunity with a chance to galvanise approaches to technological innovation.
Financial Services
Both the Conservatives and Labour seem to aim to foster a positive environment for financial services, but they differ in their methods and specific policy proposals. The Conservatives tend to focus on tax cuts or at least maintaining current levels, announcing a continuance of 19% corporation tax, and their manifesto points to a particular focus on boosting the legal and tech sectors as well as financial services.
Labour’s emphasis so far has been on stability and strategic investment with suggested plans to increase ‘green’ investment practices. Shadow Chancellor Rachel Reeves has described Labour as, ‘the natural party for business,’ announcing a range of policies that are apparently both pro-business and pro-worker. Their manifesto’s emphasis on, ‘tough fiscal rules with economic stability at their heart,’ supports their focus on compliance and financial regulation. It is also worth noting that Rachel Reeves launched an inquiry into the audit industry in 2018, so it appears to be a priority within her approach.
Another element to watch is how the delivery of the Smarter Regulatory Framework for financial services will be affected. Tailored to the UK, the policy (based on the Financial Services and Markets Act 2023 which repealed retained EU law for financial services) is set to replace retained EU legislation with rules set by the financial services regulators, operating within a framework set by government and parliament. This will of course be on pause during the election period and it will be interesting to see how swiftly it is picked back up again once results are in.
Communications Compliance
Whilst we’re talking about compliance – and we usually expect the government to be the pinnacle of adherence to regulation – this also extends to how they communicate within government and record their communications. Those in the current administration, like most professionals, have adopted WhatsApp as a convenient messaging platform. However, the use of WhatsApp has raised significant concerns regarding transparency and accountability – with Rachel Reeves being one of the most vocal critics. In 2023, the Information Commissioner’s Office (ICO) highlighted the risks of important government information being lost or insecurely handled due to the rapid increase in messaging app usage. This concern was exacerbated by reports of ministers using the “disappearing message” function, potentially leading to the deletion of key information related to the government’s Covid response.
It will be interesting to see what changes will be made in terms of compliance and communication policy, whichever party wins the election, as this will very likely have knock-on effects within the wider business world.
Overall, the UK general election holds the potential to reshape the landscape for financial services organisations and tech companies – but the extent of this is hard to predict. Between the rise in tech opportunities and AI use within businesses, we are seeing an increasing intersection of technology, regulation, and economic policy - and understanding these impacts is crucial for any business’ strategic planning. New administrations can bring shifts in financial regulation, which could affect compliance, reporting standards, and operational procedures. Firms should closely monitor the developments and prepare for a range of scenarios to navigate the post-election environment effectively.
Frequently Asked Questions
As the UK braces for the upcoming general election, businesses across the United Kingdom are evaluating the potential outcomes and their implications. As a founding partner of ClientWindow and a Chartered Accountant, Tim Zeale discusses what could be on the horizon for tech companies and the financial services sector.
The announcement of the UK general election on 4 July 2024 wasn’t exactly a huge surprise to many people, even if we weren’t expecting the exact timing of it. At the time of writing this, the BBC Poll Tracker has Labour on an average of 40% or 42%, with the Conservatives tracking at 20% or 22%. Although with the TV debates now underway, and a variety of news stories, things are still very much in a state of flux. An election battle is about to commence and whatever way you look at it, there will certainly be policy shifts in the months to come.
Technology & Innovation:
Tech companies have the odd juxtaposition of needing to be both agile and innovative whilst also needing clear regulatory frameworks to succeed. AI is of course a hot topic. The current government created the AI Safety Institute, which seemed to explore what type of regulation is required and if a light-tough response would be appropriate. Labour seem keen to be seen as pro-business although Keir Starmer has spoken about responsible technology and said regulation around AI was too slow. Labour's suggestion is to create a new ‘regulatory innovation office’ to push through advancement in both tech and its regulation with a new strategy to use everyday AI throughout the public and private sectors.
The election could also impact the FinTech sector, as different parties may have varying attitudes to the use of technology in financial services. That said, it could also be a time of great opportunity with a chance to galvanise approaches to technological innovation.
Financial Services
Both the Conservatives and Labour seem to aim to foster a positive environment for financial services, but they differ in their methods and specific policy proposals. The Conservatives tend to focus on tax cuts or at least maintaining current levels, announcing a continuance of 19% corporation tax, and their manifesto points to a particular focus on boosting the legal and tech sectors as well as financial services.
Labour’s emphasis so far has been on stability and strategic investment with suggested plans to increase ‘green’ investment practices. Shadow Chancellor Rachel Reeves has described Labour as, ‘the natural party for business,’ announcing a range of policies that are apparently both pro-business and pro-worker. Their manifesto’s emphasis on, ‘tough fiscal rules with economic stability at their heart,’ supports their focus on compliance and financial regulation. It is also worth noting that Rachel Reeves launched an inquiry into the audit industry in 2018, so it appears to be a priority within her approach.
Another element to watch is how the delivery of the Smarter Regulatory Framework for financial services will be affected. Tailored to the UK, the policy (based on the Financial Services and Markets Act 2023 which repealed retained EU law for financial services) is set to replace retained EU legislation with rules set by the financial services regulators, operating within a framework set by government and parliament. This will of course be on pause during the election period and it will be interesting to see how swiftly it is picked back up again once results are in.
Communications Compliance
Whilst we’re talking about compliance – and we usually expect the government to be the pinnacle of adherence to regulation – this also extends to how they communicate within government and record their communications. Those in the current administration, like most professionals, have adopted WhatsApp as a convenient messaging platform. However, the use of WhatsApp has raised significant concerns regarding transparency and accountability – with Rachel Reeves being one of the most vocal critics. In 2023, the Information Commissioner’s Office (ICO) highlighted the risks of important government information being lost or insecurely handled due to the rapid increase in messaging app usage. This concern was exacerbated by reports of ministers using the “disappearing message” function, potentially leading to the deletion of key information related to the government’s Covid response.
It will be interesting to see what changes will be made in terms of compliance and communication policy, whichever party wins the election, as this will very likely have knock-on effects within the wider business world.
Overall, the UK general election holds the potential to reshape the landscape for financial services organisations and tech companies – but the extent of this is hard to predict. Between the rise in tech opportunities and AI use within businesses, we are seeing an increasing intersection of technology, regulation, and economic policy - and understanding these impacts is crucial for any business’ strategic planning. New administrations can bring shifts in financial regulation, which could affect compliance, reporting standards, and operational procedures. Firms should closely monitor the developments and prepare for a range of scenarios to navigate the post-election environment effectively.
