Business leaders and universities optimistic as Labour sweeps to victory in UK general election

The Labour Party's overwhelming victory in the UK general election has left business leaders and educationists hopeful of better times ahead...and quickly.

As Sir Keir Starmer took over as prime minister on Friday from the Conservative's Rishi Sunak, after Labour secured more than 400 of the 650 seats in the House of Commons, uncertainty remained about the changes the party would introduce in areas such immigration, business activity and higher education.Sir Keir has promised new measures to assist the UK's small businesses financially and to give the sector as a whole a formal voice in economic policy-making.On immigration, the party says it "will act to bring down migration" by strengthening wages and conditions for indigenous workers and by a skills plan so that young Britons, rather than immigrants, can fill vacancies.Labour also intends to reform the points-based immigration system to reduce migration. "We will instruct the Migration Advisory Committee (MAC) to partner with other government agencies to ensure joined-up action to deliver the skills needed for growth, including priority sectors for our industrial strategy."We will work to reduce the need for international recruitment, boost per-capita growth, and ensure quick responses to changes in the labour market," the party said in a statement.Although the new government has pledged to increase the number of teachers in schools, its plans for higher education are less clear at a time when the regulator, the Office for Students, estimates that 40 per cent of UK universities and higher education institutions expect to run at a loss in the current financial year.“For some institutions there really is a genuine crisis,” said Vivienne Stern, chief executive of Universities UK. “We’re seeing a very large number of universities that have to rapidly reduce their cost base.”With university fees in England and Wales virtually frozen for the past 14 years, universities have dramatically increased the recruitment of overseas students, who pay much higher fees than their British counterparts.

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Facing growing anti-immigration sentiment, the Conservative government banned most foreign students from bringing dependants with them, leading to a sharp drop in recruitment and growing financial trouble for universities.Labour’s election manifesto accepted "the current higher education funding settlement does not work for the taxpayer, universities, staff or students,” but offered no plan on how the problems might be tackled.Meanwhile, business leaders have welcomed Sir Keir's use of pro-business rhetoric during the election campaign and said the priority now was to quickly introduce measures to boost investment, skills and productivity.Stephen Phipson, chief executive of the manufacturers' organisation Make UK, said he hoped Labour's commanding parliamentary majority would put an end "to the political and economic instability of the last few years".He added: "The new government has a lot in its in-tray to address. First and foremost is the urgent need to kickstart the UK’s anaemic growth levels of recent years and, boost investment in our infrastructure, without which we cannot address the many urgent priorities the country faces at national and regional level.“A modern, long-term industrial strategy, which tackles the skills crisis in particular, will be key to delivering this growth. Manufacturers stand ready to work with the new government and all stakeholders as a matter of urgency to help deliver this.” Rain Newton-Smith, CEO of the Confederation of British Industry (CBI), believed that delivering sustainable growth should be the "defining mission" of the new government.“The new prime minister has been given a clear mandate to take the tough decisions on areas like planning reform and boosting grid capacity needed to get the economy firing on all cylinders," she said. "What firms need now is a government that’s ready to hit the ground running and is laser-focused on delivery."Setting out a positive vision for the UK economy and leaning into our international leadership should be top priorities for the first 100 days."Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD), the organisation for HR professionals, agreed the new government must work to build a stronger, more skilled and more resilient workforce.He said the immediate priority was to implement a new skills agenda and Labour's promised 'New Deal for Working People', which he described as a complex area involving changes to workplace regulations and practices.“Proposals to introduce day one employment rights, and other employment law changes, need to be worked through in genuine partnership with employers and trade unions, through consultation and potential compromise," Mr Cheese said. "A workplace commission could bring together government, employer representatives and trade unions in one forum to help build consensus.“Effective skills and employment policy can help create a thriving economy that benefits individuals and businesses. The CIPD is ready to provide its expertise, and that of our profession, to support the new government in shaping policies to create better work and better working lives.”Shevaun Haviland, director-general of the British Chambers of Commerce (BCC), said she hoped the new government would use its decisive parliamentary majority "to provide the stability and certainty businesses crave". She said that it was encouraging to see that Labour has business policies that aligned with BCC ambitions, but added: "The really hard work starts now. We need to see action from day one on pulling together a coherent industrial strategy for the long-term, which places a strong emphasis on harnessing green innovation.“Closing the skills gap, growing exports, boosting productivity and harnessing the power of AI won’t happen overnight. And businesses will also want to see early movement on pledges around business rates reform and improving our trade relationship with the EU."Jonathan Geldart, director-general at the Institute of Directors (IoD), said his organisation "looks forward to working with the new government to create a resurgent UK economy in which individual companies and directors have the confidence to invest and grow".He said the IoD had been impressed with Sir Keir's election promises to work in partnership with business. "It is essential that this positive relationship continues, and that the new government places wealth creation at the forefront of its priorities," Mr Geldart said.He, too, felt the new government must "urgently" issues such as skills shortages, an industrial strategy to unlock investment and an acceleration in the transition to net zero.Mr Geldart added: “The new government is rightly committed to embedding higher standards of conduct and ethics into public life. It is equally important that the UK business community regains the esteem of wider society. We hope that the new government will work with the IoD in making the UK’s corporate governance framework fit for the future and help it roll out our planned code of conduct for directors.”The Chartered Management Institute (CMI) joined these bodies in focusing on the priorities of productivity, skills, green transition and public sector reform from its perspective of building management capability. Congratulating Sir Keir Starmer on becoming prime minister, the CMI developing high-quality management is vital for future prosperity and security. "Without stronger managers, productivity growth, public service improvement, better work conditions and the green transition, will all be held back."

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