An expected large Labor majority and even what pollster YouGov predicted last night as a “crushing” defeat for the Conservative Party almost materialised, catapulting Rishi Sunaka from 10 Downing St and parachuting into his place as the UK’s new Prime Minister Sir Keir Starmer . .
The latter’s victory speech (“Change Begins Now”) and the former’s reconciliation speech (“The Judgment I Take Responsibility for”) have already been delivered, although a handful of constituencies are yet to declare this morning, July 5, 2024. .
But, writes IT staffing agency VIQU’s CEO Matt Collingwood, what does first Labor government in 14 years mean for IT suppliers?
Firstly, I am pleased that we now have stability and know that we have a new government that does not have to work with the opposition or the coalition to get legislation passed. I hope the new majority Labor government will encourage UK companies to plan for the future and invest further in their technology stacks.
It is very necessary. It’s been a challenging 18 months for many independent contractors, probably none more so than for those in the IT sector. With this period being labeled a “global tech recession”, we’ve seen the perfect storm of the Covid legacy, the rollback of the IR35 repeal, funding cuts and mass redundancies by Big Tech. Each has impacted the outsourcing technology workforce, from small to large.
To make matters worse, there has recently been a strong reluctance on the part of companies to commit to large projects and expenditures.
Prior to 2020, most of our technical staffing agency end clients were comfortable sharing their project plans for the next 18 months with our consultants, whereas the focus of most commercial organizations today is to plan for only three to six months. future. The most.
This hesitancy was due in part to our volatile political environment. Fortunately, that volatility is now certainly gone.
Labour’s ‘Wealth Creation’ sounds good. But what about small business owners?
Labor won the 2024 general election by claiming to be the party of “wealth creation” to raise living standards for working people.
The party believes that increased investment will lead to more funding for training, skills, technology and infrastructure, which will ultimately increase productivity – a measure of output per hour worked. And it is a measure in which the UK currently lags behind many of our international competitors.
However, Labour’s specific policies to support business spending are limited in their publicly available detail and focus mainly on education planning and reforms. Good intentions alone are not enough to do business, so it remains to be seen whether Labor will champion business, let alone “small” business, which includes a standard limited company run by a typical IT supplier.
Public sector spending
At the heart of Labour’s 2024 election platform is a pledge to increase public spending.
But before you plan that home extension you dreamed of when you were working on a desk or contract job, it’s important to remember that this doesn’t necessarily mean more job opportunities for IT contractors.
Labor promises to deliver 40,000 operations, scans and appointments a week in England – two million a year. Improving IT systems and processes can help achieve this goal.
In spring 2024, the now outgoing Chancellor of the Exchequer Jeremy Hunt (who narrowly avoided losing his seat by just 900 votes in yesterday’s vote) announced plans to boost NHS productivity through IT system upgrades; scaling existing use of artificial intelligence (AI) and equipping all NHS staff with modern computing technology.
Hunt has pledged that all NHS trusts will have electronic patient records by March 2026, upgrading more than 100 MRI scanners with artificial intelligence and digitizing care transfers.
So if Labor sticks to these existing plans – and its own, it would be easy to conclude that there will be many more opportunities for IT contractors in the public sector, particularly those with healthcare experience.
Still, I’m not convinced that the shot for our health care is going to happen. I would like to see more public sector contracts awarded to SMEs. However, since the introduction of IR35 Off-Payroll Working in the public sector on 6 April 2017, we have seen an increase in the use of large systems integrators (former Prime Minister Rishi Sunak’s father-in-law’s business was the controversial, for-profit SI).
And these corporate system integrators mostly use permanent employees, or even offshoring. Independent IT contractors and other temporary professionals could thus find themselves in a situation where they are not invited to the party.
Cancel IR35? Unlikely under Labour
Reform UK was the only party to pledge to repeal IR35 in the six-week UK election campaign. This pledge to repeal IR35, which is set out in their manifesto ‘Our Contract with You’, was made by the party before the 2024 general election was called on 4th July 22nd May. Despite this not being clarified or explained by Reform UK – despite repeated calls from ContractorUK, the pledge remained in place throughout this 43-day campaign.
The Labor manifesto completely ignored IR35 and generally lacked any interesting detail regarding the self-employed, despite the party’s pre-election plan for “self-employed” status.
Instead, “Our Plan to Change Britain” made strong references to other plans already announced, such as their “Plan to Make Work Pay: Delivering a New Deal for Workers”.
Labour’s small business experts recently told ContractorUK that a review of Labour’s OPW is unlikely, as is going further – scrapping IR35 reform altogether.
I’m afraid I have to bring them back down to earth with the rose-tinted glasses of suppliers (and other recruitment agencies for IT suppliers). It is important to remember that it was originally the Labor Party that introduced IR35 into law all those years ago (2000) and that alone tells me that it is here to stay for a long time.
Zero hour contracts
One thing that is causing concern is Labour’s take on zero hours contracts. I don’t doubt that some workers, such as retail and warehouse workers, will benefit from wage and benefit protections.
However, many IT contractors and freelancers who work on the payroll actively want zero-hours contract features.
Labor has consistently pledged to ban zero-hours contracts, which allow employers to waive guaranteed minimum working hours.
However, under its updated proposals, employers would have to provide contracts reflecting usual hours worked, but employees would still be given the option to remain on zero-hours contracts if they chose to do so.
Under another, more left-wing Labor umbrella, firms have had their card marked, but since Sir Kier Starmer took over there has thankfully been no talk of banning this important labor market model, although umbrella regulation the company is already overdue.
Go green (ahem)
One aspect of Labour’s manifesto that gives me hope is its £24bn commitment to ‘green’ initiatives, including the creation of a Great British Energy Company.
Labor aims to create 650,000 jobs in the green/energy sector by 2030. We saw it successfully four years ago in the United States under the Biden-Harris administration, and it grew very well and created thousands of jobs. In April 2024, Democrats announced that they have authorized more than 25 gigawatts through clean energy projects – a major milestone before 2025. That’s enough clean energy to power more than 12 million homes across the US!
I’ve written before about the future of green technology and how I believe it’s a sector that IT vendors who care about our environment should absolutely explore. There is a long, long way to go before we see what the green tech sector will achieve and what impact it will have on the UK technology supplier workforce.
However, we’ve already started to see large corporations looking for team members to promote sustainability within their organizations, and it doesn’t seem like it’s just limited to permanent employees. So I’m excited to see where the green sector could go under our new Labor government and I’m asking freelancers and contract technologists to be open to what the sector could do for them.
Final Thoughts Now Labor leader Sir Keir Starmer has almost taken office
In closing, I think it’s clear to most IT vendors and businesses that things in government have been in need of a shake-up for some time.
Some aspects of Labour’s manifesto are unclear, which could understandably unnerve the one-person supplier companies now that Labor – the architects of the broker legislation – have won the keys to Number 10. The suppliers who read this probably won’t be too keen to read my thoughts on , where IR35 will go under a new Labor government, yet I think there is a general confidence in the air around a Labor victory which I hope will bring stability, leading to increased spending and more temporary jobs for computer suppliers who , frankly, they’ve had a problem for far too long.
Labor has some ambitious plans which I hope will be good for the long-term success of British businesses; community of IT vendors and technology staffing agencies. A new era of British politics has just begun, let’s see what it brings.