With a UK general election near enough certain to occur this year and the country's Labour Party the overwhelming favourite to form the subsequent government, reading the runes of Labour’s relatively detail-sparse policy agenda to get a sense of the likely future environment is a sensible course of action for business.
While Labour Party policy is likely to become less murky as the election approaches, here is what retailers in particular can glean from what information is already out there:
The party will face tough decisions on taxation, but is unlikely to significantly cut taxes on business.
Nonetheless, reform to business rates does appear to be an area where Labour is serious about making changes, which is consistent with its manifesto positions in 2015, 2017, and 2019.
The short-term approach will likely be focused on small businesses, with a freeze in rates and an extension of the relief threshold likely to disproportionately benefit small retailers.
More structural reforms can be expected to emerge as the years go on, but the policy detail on those is likely to be developed over their time in the government.
Other areas of business taxation are likely to be less fruitful avenues for retail, with the party indicating the removal of VAT on tourists’ purchases to be a low priority, and corporation tax unlikely to be cut.
The party’s approach to labour market regulation is likely to slightly increase costs for retailers and businesses more broadly.
The party has expressed intentions to ban zero-hours contracts and ‘fire and rehire’ practices, and eliminate qualifying time for rights to such entitlements as sick pay, parental leave, and flexible working.
Retailers are therefore likely to see higher costs and reduced workforce flexibility, particularly for jobs such as shop floor workers and service staff, where zero-hours contracts are disproportionately used.
This may lead to retailers deciding to employ fewer workers.
Other policy areas are also likely to affect retail with primary and second-order effects.
Retailers will likely see some benefit from reforms to the planning system, enabling them to build and expand more easily, and the home sector will also likely experience growth owing to increased house building, stimulating demand in the sector.
Despite tackling crime being one of Labour’s ‘missions’, the direct pledges concerning retail, namely the commitment to scrap the £200 ($253) limit on shoplifting offences and introduce a specific offence for assaulting a retail worker, would be largely symbolic, with the effect of crime on retail being primarily dependent on the success of its proposals to clear the backlog in the courts and introduce a more preventative approach to crime.
