Sir Keir Starmer and the Labour Party have won a majority in the 2024 UK General Election with changes forecast. How will a Labour win affect the insurance industry in the UK? LII asks the experts.
Julian Hucks, founder and managing director, Starpeak Insurance Solutions
Labour’s General Election victory should be a step in the right direction when it comes to tackling the ongoing issue of underinsurance for small businesses. SMEs have had a tough few years navigating the cost-of-living crisis and other economic challenges, which has ultimately led to costs being cut. Unfortunately, insurance cover is among the casualties. Labour’s promise to stamp out late payment of invoices to small businesses should result in better cash flow – meaning more businesses will be able to pay for insurance cover on time and protect themselves against potential risk.
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The pledge to address skills shortages is also great news for the insurance industry. Our field has been grappling with an aging workforce and struggling to attract new, ambitious talent. The introduction of new Technical Excellence Colleges will hopefully entice more young people into insurance by demonstrating the range of new roles that technology has created across the sector.
Sinead McHale, CEO, Satago
Small and medium-sized enterprises (SMEs) are the heart of the UK economy, contributing significantly to employment, innovation and economic growth. In the current climate, the newly elected Labour government must prioritise and address their needs and concerns.
Despite recent signs of easing inflation, business costs remain high. SMEs continue to grapple with profitability challenges and longer-term growth plans, with limited access to finance and late payments persisting from larger corporations.
New policies must be implemented to support SMEs further, such as stricter penalties for late payments from larger businesses and incentivising prompt payment practices. Meanwhile, increased collaboration between fintechs and banks will help SMEs adopt more sustainable cashflow management practices. For example, invoice financing helps SMEs build resilience against future challenges and increases visibility by allowing them to access capital via their balance sheets.
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By GlobalDataBy prioritising fintech development, the new government can set the standard for fostering an overall prospective and resilient business environment. Ultimately benefiting SMEs and the entire UK.
Iain McLellan, director, Isio
With Labour securing a sizeable majority their promised pensions review has the potential to be more radical and grasp some of the thornier pensions issues. The government may feel it has clear license to pursue the most ambitious form of its vision for UK pension schemes and their members. That could include sweeping changes to improve member outcomes, ensure schemes take advantage of consolidation and scale, and increase productive investment in UK markets, though it’s worth noting that the consolidation and productive investment themes are ones that were also being pursued by the previous government.
In the meantime it will be interesting to see who is appointed as Pensions Minister and what existing pensions policy developments they look to accelerate, put on the back-burner or bin altogether. Labour has dropped its plans to reintroduce the Lifetime Allowance and has no current plans for further changes to pensions taxation. However, this falls short of an outright commitment to leave pensions tax alone, and pensions might be seen as a convenient target for ‘stealth’ taxes when fiscal circumstances are tight.
