What does politics have in store for business in 2024?

Simon Danczuk, businessman, author, and former MP, looks ahead at the 2024 international chessboard, covering global events and their impact on UK business.

November saw the Conservative government deliver their King’s Speech and Autumn Statement for the year ahead. The former is where King Charles is tasked with reading to Parliament a list of what legislation the prime minister wants to see enacted over the next 12 months, whilst the latter involves the chancellor of the Exchequer presenting to Parliament his economic forecasts and proposals.

They were probably the last plans to come from this government before a general election is finally called. So, what should businesses expect from Rishi Sunak, Jeremy Hunt, and the rest of government in 2024?

High stakes

First and foremost, the drive for economic growth and reducing inflation remains a key priority, they were the first words the King was asked to utter. What this means is whilst we’ll see some tinkering with interest rates and taxes, they will both remain relatively high.

Even if a Labour administration takes over, don’t expect much change. The public purse is empty and UK debt is at an incredibly high level following the pandemic and higher energy prices because of the Ukraine war. The upside for business is that wages should be contained, and we should slowly build back to prosperity. To help with this, the government – and the same would apply to whoever is in power – is promising more trade agreements with individual countries, now that we’ve come out of the EU, so companies should find it increasingly easy to do international business as we move through 2024.

Assuming the Conservatives do stay in power, we’re promised legislation which will provide new oil and gas fields, but also improve energy infrastructure. Expect a focus on better grid capacity and connections, which should mean improved security, reduced peak loads, increased integration of renewables, and lower operational costs. All this will also make it easier to deliver on net zero commitments. If Labour takes control, we should expect a radical shift to reducing carbon emissions, one that could place onerous responsibilities on business.

Proposed rail infrastructure investment should also create business opportunities in 2024, as the government scraps HS2 and puts money into Network North – the idea being to better connect northern towns and cities, rather than just Manchester and London.

From academics to technocrats

The most significant business development to expect from Sunak is the emphasis on technology. The King’s Speech mentioned self-driving vehicles, machine learning, digital innovation, and the development of safe Artificial Intelligence. There’s little doubt the PM has an aspiration to make the UK much more tech-savvy, with an economy at the forefront of digital developments, rather than following behind.

Business should expect tech-related incentives, government departments tasked with stimulating this sector and related occupations. Perhaps to match these technological aims, expect a big shake-up in education. We are told universities will be radically reformed, scrapping ‘Mickey Mouse’ degrees and boosting technical education. The aim is to close the current skills gap and get our workforce more prepared for the jobs our country has and needs.

There is also a promise to initiate what’s called the Advanced British Standard level, which is targeted at 16- to 19-year-olds. It involves a plan to increase the level of English and Maths and bring together A-Levels and T-Levels into a single new qualification, with students being able to take a wide mix of technical and academic subjects. The hope is that we have more young people coming out of education ready and prepared to contribute positively to business and commerce.

Also, expect reforms to the welfare state and a push to get the economically inactive back into work. The government have finally realised that job vacancies can be filled by people not currently in employment, rather than relying upon immigration.

Sticking with social policy, the government have restated their intention to cut waiting times in the NHS. This will be helped by implementing their Workforce Plan for the sector but must also surely be dependent upon the government’s ability to stop industrial action taking place.

“Events dear boy, events”

Labour’s plans regarding technology, welfare, education, and the NHS are less clear, though we’re likely to learn more as we approach the general election.

As well as uncertainty around a change in government during 2024, business should also expect continued unpredictability from international events. We’ve come to expect turmoil or conflict in other regions adversely impacting our economy and ability to trade.

The war between Israel and Hamas is a recent example, the Ukraine war is set to continue, and parts of the African continent remain plagued by conflict. There are other flashpoints to look out for, such as China and Taiwan, challenges around the Democratic Republic of Congo, trouble in countries like Iran, Pakistan, Ethiopia, and Yemen, plus tensions along the Armenian–Azerbaijani border. Many of these could impact energy production, minerals for use in new technologies, and the manufacture of key equipment and goods.

Finally, there’s the impact from other countries and region’s economies and politics. The United States Presidential Election, the European Union’s, China’s, and many other country’s economic performance will impact how easy or hard it is to do business in the UK.

So, as 2024 unfolds it’s likely to look a lot like 2023, with business remaining vulnerable to what our former prime minister, Harold MacMillan, famously described as: “events dear boy, events.”