King’s Speech – what is Labour’s plan for small businesses?

Following the Labour Party’s return to power, King Charles has outlined the party’s priorities for their first year in office in the King’s Speech. 

Growth is top of the agenda, with Sir Keir Starmer calling his task one of “national renewal”. 

We know that small businesses want a new government to reduce their tax burden, tackle the energy crisis, prioritise investment in small businesses, and much more. Let’s take a closer look at the huge raft of legislation set out in the King’s Speech to see if it matches any of these requirements. 

What does the King’s Speech mean for small businesses? 

The King’s Speech touched on 40 bills in total, but few proposals directly addressed the needs of small businesses. These eight are the most relevant. 

1. National Wealth Fund Bill 

Our Small Business Manifesto called for a new government to prioritise investment in small businesses, reducing red tape, and making it easier to access grants and loans. 

The National Wealth Fund Bill aims to simplify the UK’s fragmented landscape of support for businesses and investors. It will align with the SME-focused British Business Bank (which already supports £12.4 billion of finance into small businesses). 

2. Employment Rights Bill 

This bill will deliver on some of the policies set out in Labour’s Plan to Make Work Pay that need primary legislation. The overall plan includes making flexible working a default, removing zero-hour contracts, and banning fire-and-rehire practices. Alongside the bill, as part of the King’s Speech, Labour committed to introducing a genuine living wage. 

3. English Devolution Bill 

This bill will hopefully make it easier for businesses to grow in their local market by giving more decision making powers to local leaders and empowering local communities – essentially “moving power out of Westminster and back to those who know their areas best”. 

4. Great British Energy Bill 

In their manifesto, Labour committed to preventing small business energy bills from reaching crisis levels once more. One method they hope will address this is by establishing Great British Energy, a public entity focused on lowering costs and accelerating investment in renewable energy such as offshore wind. 

5. Skills England Bill 

The aim of this bill is to bring together businesses, providers, unions, and other organisations to make sure “we have the highly trained workforce that England needs.” It will create an organisation called Skills England to oversee this, transferring functions from the current Institute for Apprenticeships and Technical Education. 

6. Planning and Infrastructure Bill 

The Planning and Infrastructure bill aims to accelerate house building and infrastructure delivery by reducing red tape. This is great for the construction sector, which saw shortages in materials and skilled workers, leading to an overall slowdown in recent years. 

7. Budget Responsibility Bill 

Economic instability has seriously hurt small business prospects. The Budget Responsibility Bill aims to improve economic stability in the UK by creating something called a Fiscal Lock. This means that “any government making significant and permanent tax and spending changes will be subject to an independent assessment by the Office for Budget Responsibility (OBR).” 

8. Mental Health Bill 

In our Small Business Manifesto, SMEs outlined their hopes that the next government would prioritise the mental health of the self-employed – introducing a flexible statutory sick pay scheme and mental health support specifically for small business owners.

While this bill doesn’t address small business owners specifically, it does aim to deliver on Labour’s manifesto commitment to modernise the Mental Health Act 1983, giving patients “greater choice, autonomy, rights and support”. 

King’s Speech contains limited support for small businesses

“The King’s Speech offered an opportunity for the new government to deliver help for the UK’s five million small businesses and build on the pre-election signals to ‘pull up the shutters’ for Britain’s entrepreneurs,” said Bea Montoya, COO at Simply Business UK. 

“However, it’s hard to detect much positive news for SMEs within the outlined proposals. 

“The future prosperity of the UK economy depends on the success of small business. Our research shows 98 per cent of SMEs felt the last government didn’t do enough to reduce their tax burden – so there is clear evidence of where help is required from the new government in an increasingly challenging business landscape. 

“Hopefully, more recognition for SMEs will emerge along with cast iron commitments to create conditions which will enable small businesses to thrive in the long term.”

What is the King’s Speech?

Formally called the Speech from the Throne, the King’s Speech is written by the government and delivered by the reigning monarch at the State Opening of Parliament. It’s delivered at the beginning of a new parliamentary year or session, and sets out the government’s priorities for the following months. 

What’s next? Key dates for businesses to look out for 

Labour has set ambitious goals for its first 100 days in office. After parliament returns from recess the Labour Party Conference will start on 22 September, when the government will likely celebrate any wins so far. 

A very telling moment will be if the party does announce its first Budget this autumn, which will set out key financial policies for 2025. However, there has been talk of skipping the Autumn Budget this year. 

Some 47 per cent of the businesses we surveyed before the election said a change in government would make them more hopeful about the future of their business. 

Let us know in the comments below whether you agree. 

Other useful articles: 

• General election: what Labour’s win means for small businesses
• The DMCC bills: how will it impact your business? 
• What is business growth? 4 simple ways to develop your business? 
• How to write a business plan in 7 simple steps

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