Following the release of the Labour Party’s 2024 general election manifesto;

Oliver Maddison, Retail Analyst at GlobalData, offers his view:

“The retail sector should not expect to be the immediate priority of the likely incoming Starmer-led government after next month’s general election. Of the retail-relevant policies set out in the Labour manifesto on Thursday, the only one with a prescribed timeframe was a package of labour market reforms to be delivered in the first 100 days, slightly increasing labour costs, with the remainder having no set timeline or unlikely to have a significant effect until later in the Parliament.

“The Labour Party manifesto reiterated its commitment to introduce a ban on the use of zero-hours contracts and ‘fire and rehire’ practices, eliminate qualifying time for rights such as sick pay, parental leave, and flexible working, while strengthening both trade unions and state enforcement. Combined with the proposed removal of age banding for the minimum wage, retailers are likely to see slightly higher labour costs in the not-too-distant future, which may disincentivise job growth in the sector, although there is additional uncertainty as to whether removing minimum wage age banding would apply to under-18s.

“Retail executives should nonetheless be encouraged by Labour’s overall promised policy package, although a number of highly anticipated reforms do not have a specific timeline attached, indicating that they will be implemented according to a slower schedule. The manifesto promises non-specific structural reforms to business rates, indicating that the policy detail is likely to be thrashed out once Labour enters government, backloading the implementation timeline. Similarly, the manifesto reiterates a commitment to reform the apprenticeship levy into a ’growth and skills levy’ to give businesses greater freedom to upskill their workforce, but offers no concrete timeline. In such cases, retailers may be able to have greater input on the precise shape of policy outcomes through a greater scope for consulting with policymakers.

“The effects of some of Labour’s policy agenda on retail will likely only begin to manifest much later, depending on its efficacy in achieving more structural goals. Planning reform is thought to be a key priority for Starmer, given its centrality to achieving future growth, but concrete effects will likely take time to come to fruition. While Labour has pledged to crack down on shoplifting and introduce a specific offence for assaulting retail staff, these would be largely symbolic commitments, with broader efforts to reduce crime and clear the backlog in the courts being more significant determinants of success. Likewise, the effects of expanding the Low Pay Commission’s remit to consider the cost of living when setting the minimum wage will likely take time before it makes a significant additional difference to retailers’ hiring costs.”