The UK political landscape underwent a dramatic change last week. The Labour Party’s landslide victory, led by Sir Keir Starmer, had been anticipated, but still has lobbyists considering what the political shift will mean for their companies, sectors and customers.
In capital markets, insurance and banking, trade groups have been quick to publish their predictions and wish-lists for working in the new political environment, with marcomms professionals considering where they will focus their efforts within the first year.
With the ambiguous and, sometimes, erratic approach to policymaking under the previous Tory government now seemingly consigned to the history books, investment specialists were forecasting a better period for UK corporates.
Investment
Market practitioners have been quick to state that, for investment banks and asset managers it could herald the beginning of a brighter period, with a busy period for mergers and acquisitions and a return of the London IPO market, which was already showing the sparks of a return in the final days of the Sunak government.
The Investment Association promised to “work closely” with the new government and encouraged Starmer’s ministers to consider ways to ensure that investment lands in British companies.
The trade body’s chief executive officer, Chris Cummings, said: “This includes channelling productive capital into more thriving British businesses and infrastructure projects, helping more individuals to benefit from the higher pension and savings levels that investing can build, and fostering excellence in our industry with a highly skilled workforce.”
On the issue of diverting capital into British businesses, the Pensions and Lifetime Savings Association had reminded the previous Tory government that plans to “encourage” cash into UK companies had to keep in mind pension trustees’ fiduciary duties to their members. In its welcome note to the Starmer government it again underscored the importance that any solutions “are right for scheme members and savers.”
Nigel Peaple, director of policy and advocacy at the PLSA, said the organisation was urging the Labour government to consider how best to attract pension fund investment to support key policy goals such as UK growth and climate change. Peaple added that Labour’s planned Pensions Review would offer the opportunity to consider these issues in depth.
Mortgages and payments
The mortgage market had been showing signs of improving in the final weeks leading up to the election as the outlook for interest rates continued to suggest that further cuts were on the horizon, albeit at a slower rate than envisaged 12 months earlier.
However, the prospect of a Labour government could prove a shot in the arm for marketers promoting first time buyer products with Starmer promising a mortgage guarantee scheme and the building of 1.5 million new homes.
“The sizeable majority simply strengthens that message of stability,” said Craig Vile, director of the ValPal mortgage network. “This could give prospective homebuyers the confidence they need to get moving.
“Agents should prepare for action and expect a hike in activity. And they should be prepared to put in the hard work to nurture every lead generated – the competition is going to be tough but more business will be there to be won.”
UK Finance – the trade association for the UK banking sector – is lobbying to maintain the thresholds at which movers and first-time buyers pay Stamp Duty and to only increase stamp duty bands annually in line with the UK House Price Index.
David Postings, chief executive of UK Finance said the level of political support for the UK financial services sector from Keir Starmer, so far, has been “extremely welcome”.
“Throughout the election campaign economic growth has been front and centre of the debate,” he said. “Financial Services has a vital role to play here, both as a major employer and through the support it provides to consumers and businesses up and down the country.”
UK Finance also represents the interests of numerous payments companies in the UK and, as such, is also seeking support from the new government for other recommendations it has proposed for its members.
These include the issuance of a digital gilt backed by HM Treasury to develop securities tokenisation and for a new National Payments Vision and Strategy to build an improved “world leading” payments ecosystem.
Insurance
In Insurance, it was already widely known that the London Market Group had been holding a meetings with the Labour Party in the lead up to the election, but it decided against a public media statement outlining its priorities in the immediate aftermath of the election result.
The Association of British Insurers, however, did issue a short statement, but failed to outline a wishlist, in the same way that some of their peers had done in other industries.
Hannah Gurga, director general of the ABI said the organisation was “looking forward” to working with Starmer’s government to deliver what she described as “mutual priorities”.
She added: “Our industry shares many areas of common interest with the new government, including an ambition to drive growth and competitiveness, boost household financial resilience against risks and tackle climate change. By working together, we can find solutions to some of the country’s biggest challenges.”
Mutual societies
Four trade associations – Co-operatives UK, the Association of Financial Mutuals, the Building Societies Association and the Association of British Credit Unions – clubbed together for their responses, clearly earmarking areas they wish to pursue in the months ahead.
In a statement issued shortly after the new Prime Minister gave his first speech at No 10 Downing Street, a representative for the four organisations said they invited the new government to work with them on three policy areas.
Firstly, they are seeking to create an environment that places mutuals and co-operatives at the heart of government policy thinking to grow the mutual sector.
They called on Keir Starmer to deliver a legislative and regulatory framework that enables mutuals and co-operatives to “compete fairly with other businesses”. They also asked for innovative thinking to “unlock new capital raising options” for mutuals and co-operatives.
The four organisations said they have more than 74 million members across the UK.