General election 2024 – industry reactions

It has been a dramatic night of results in the UK election. Sir Keir Starmer’s Labour party has won a landslide victory, and he will become the next prime minister.

The Conservative party has suffered the worst night in its history and Labour are set to enter government with a majority of around 170.

Industry response:

Following today’s news that Labour has secured a landslide victory in the General Election, members of the asset and auto finance community share their thoughts on the immediate steps needed as the government begins its plans for their future.

Stephen Haddrill, Director General of the FLA, said: “When the electorate’s expectations are high, but the government’s coffers are low, growth is the only option.

“This must be a concerted effort – a partnership where Government creates the right environment for growth so that lenders can finance investment, and businesses can do what they do best – generate wealth and employment.

“That environment will not happen by chance. The FLA’s Manifesto sets out the necessary improvements to regulation, access to finance and preparations for a greener future.

“Once the key Ministerial positions are confirmed, we will be re-establishing contact to continue discussions that began before the General Election.”

 John Phillipou, Managing Director of SME Lending at Paragon Bank, noted: “Now that Labour has won the General Election, the first 100 days will be crucial in setting out plans to foster economic growth. We want to see a focus on investment in British businesses and the development of a deliverable sustainable industrial strategy. We need to make the UK a desirable place to do business once again and attract more private investment both domestically and from overseas.

“As someone who works closely with SME businesses across the UK, we also want to see SME businesses supported. The government will need to work closely with SMEs to truly create policies that support them and combat some of the challenges they currently face. High costs, supply chain issues, labour shortages and an unstable political environment have all contributed to challenging times for SMEs in recent years.

“In the asset finance sector, we still want to see full expensing extended to used assets to prolong the lifecycle of useable assets, but also support smaller businesses that cannot afford to buy brand new.

“Additionally, as we approach the 2050 net zero target, we want to see more policies in support of businesses investing in green assets, both new and used.”

Mike Randall, CEO of Simply Asset Finance, said: “The new government has no time to waste – the UK recovery is at risk of veering off the tracks and substantive action is required to avoid this happening. Front and centre needs to be ensuring that SMEs can sustainably and reliably drive productivity and growth. Without that, the economy could falter, and pledges on public services could become unachievable.

“There are without a doubt longer-term structural issues that need to be addressed, for which policies addressing late payments, planning reforms, and capital allowances can have a real impact. But in the shorter term, the truth remains that access to capital is all too often the core of the issue. Both the government and lenders have a responsibility to work hand-in-hand to deliver fast, innovative, and agile financing. Businesses need the reassurance that they have the necessary support to help them capitalise on opportunities as they arise, and the confidence to make the decisions that will enable them to thrive in the future and beyond.”

Ed Rimmer, CEO at Time Finance, commented: “The finance industry in recent times has been witness to a rumbling sense of apathy from SME owners, with many businesses either not knowing where to turn for finance or have been too cautious to explore their options. Today we hope to see many of these firms reevaluating their position and hitting the ground running with a newfound optimism to take their business forward.

“A new Labour Government needs to keep the promises it has made to SMEs in their manifesto. From exposing late payers to unlocking the supply of finance for businesses looking to grow, it is vital for the new government to demonstrate their commitment to SMEs. They need to focus their time on assisting businesses to market effectively, encouraging investment into the country and helping to develop new trade strategies, which will hopefully inspire SMEs with the courage and confidence to expand their business and help rebuild the country.

“When it comes to the economy, simply put, the country needs stability. Interest rates need to continue to fall further to unlock working capital for UK businesses and allow intermediaries and the wider finance market to bring solutions to businesses to help them achieve their goals, and though we have reached the target for inflation, our new Chancellor should focus on getting it below 2%.”

Theo Chatha, chief financial officer of Bibby Financial Services, noted: “The Labour party now has an opportunity to drive economic growth through the UK’s resilient small and medium sized business community, and to support them in boosting output. But first, they must address key areas of concerns for SMEs, and access to finance is an area that requires attention.

“We know that for many SMEs, high street banks remain the first and only port of call, so there’s a strong opportunity for Labour to increase competition in the commercial lending sector and to enable SMEs to access a wider range of options.

“That’s why we were encouraged to see Labour commit to strengthening the British Business Bank’s Bank Referral Scheme in January. But clearly, more still needs to be done to make it work effectively. Despite much effort from the British Business Bank and the designated platforms and lenders, the number of businesses the scheme has supported since its launch in 2016 has been hugely disappointing.

“We would urge this government to develop a new scheme that includes input from a wider array of SME funders and commercial finance brokers, to ensure that the initiative delivers for SMEs. This would ensure Labour gives SMEs more choice and agency over how they finance themselves to grow and thrive.”

Mike Hawes, SMMT chief executive, said: “We congratulate Sir Keir Starmer and the Labour Party on their election success. The new government’s commitment to an industrial strategy and its already published Automotive Sector Plan can boost manufacturing competitiveness, enhance trade relations and support consumers. The industry is fundamental to the achievement of net zero which, with the right conditions, will deliver the growth the economy needs. We now look to continue our productive partnership with government to ensure the long-term success of the sector and all those who depend on it for their mobility, services and livelihoods.”

Ian Plummer, commercial director at Auto Trader, said: “All too often in the recent past, we’ve seen short term political advantage prioritised at the expense of the serious long-term decision-making the country needs to meet net zero goals. Given the size of their mandate, we’d like to see Labour do more to support the transition to greener vehicles. That means protecting the existing salary sacrifice and BIK incentives to support the new electric car market, and targeted financial incentives on used electric cars to support greater adoption.

 “We also need to be proactive and transparent about future changes in road pricing and taxes for electric cars so consumers can plan accordingly, as well as supporting the industry to install more chargers by speeding up planning and encouraging more creative ways to charge EVs near people’s homes.” 

Philip Nothard, insight director at Cox Automotive, commented: “We welcome this new government. We ask that it gives the automotive sector – as a major UK employer, an integral part of the nation’s industrial strategy, a significant contributor to the treasury and a key component of our net zero commitments – the attention and backing it deserves. This is a time of seismic change throughout the automotive ecosystem. Without leadership and sustainable support from the government, the sector will be compromised in its ability to meet its full potential.”

Todd Davison, MD of Purbeck Insurance Services, said: “We want to see Labour prioritising small business growth and funding. Access to finance from the larger banks for SMEs can be difficult and precious time can be wasted in pursuit of these facilities. Decisions by the big banks need to be expedited for SMEs so that they have the opportunity to explore other avenues if necessary.

“Reforms to the British Business Bank could make access to capital easier, particularly if the BBB increases links with alternative finance providers. At Purbeck, we see most applications for personal guarantee insurance coming from SMEs that have secured loans from alternative lenders.

“Also, knowing that cashflow can sometimes fluctuate, prior to taking finance, SMEs need to check what forbearance/assistance a lender would be able to provide in order to help manage cashflow and repayment obligations. Any policies on interest only repayments, repayment holidays and the fees/charges in these circumstances, should be provided up front by lenders in the application process.

“Fundamentally, closer liaison is needed between the new Government and the lending community to help SMEs overcome the barriers to finance.

“At the same time, Labour needs to recognise that navigating the myriad of SME finance options can be daunting. Improved awareness and education is needed on how different loan facilities work and what can be done to reduce the risk of personal guarantees such as sharing the guarantee or using personal guarantee insurance.

“As we await the outcome of the FCA’s review into small business lending practices, small business owners can alleviate concerns surrounding personal guarantee backed loans and instead view them as avenues for growth and opportunity.”