The announcement from the Government, revealing plans for a 2024 UK general election in July, has seen all political parties dive into their campaigns to gain political power and improve the UK's current climate.

As each party unveils their proposed distinct policies, it is important to examine which policies will affect the mergers and acquisitions (M&A) landscape, how significantly these policies will influence the business environment, and how the outcomes of the election could shape the future of your business.

As a leading advisory firm, GS Verde Group's multi-discipline team offers expert guidance to businesses in the M&A sector, along with supporting businesses on how they can adapt and thrive amid changes in the political climate. As leaders in the space, we will continue to stay informed regarding shifts in the political climate to give the best advice possible and enable your business to benefit from any changes.

In this article, we explore the potential impacts and outcomes of the upcoming election and provide advice on how best to navigate these changes.

Political party manifestos that could affect your business

So far in this campaign, we have seen all political parties present varied economic policies that will shape the business environment, but how will they affect your business?
The Conservatives have proposed easing business rates, expanding access to finance, and retaining tax incentives to encourage and foster a pro-business climate.

Meanwhile, Labour has revealed that its policies will give the UK the changes it needs to be on a better path for the future. Their policies include a focus on reforming taxes, enhancing workers' rights, and replacing business rates with a new system which will potentially raise operational costs and promote equity.

Another party in the running is the Liberal Democrats, who have proposed the introduction of environmental duties, the abolishment of business rates, and the support of local banking to drive sustainability.

As a business owner, it is vital to be aware of and informed about the political changes within the M&A landscape, especially with the upcoming general UK Election. Whether you are a business owner who wants to sell your company, buy another company, or even scale your company, GS Verde Group will guide you through what you need to do to secure your business's legacy.

Understanding Business Implications of the 2024 UK General Election

If you are a business owner in the UK, you may be wondering what your next steps are in terms of exiting your business. You may even have plans to grow your business to greater levels of success through an MBO, EOT, Trade Sale, or an acquisition ahead of the election.

Here, we break down some of the policies to help examine how they could affect your business long-term.

The Conservatives:

Easing of Business Rates: This will see a reduction in costs, increase profitability, and open up competitiveness within markets. Companies will see the burden of costs lessen as profitability improves, making businesses more attractive to investors and potential buyers.

Expanding Access to Finance: The policy looks at growth opportunities, facilitation in the M&A landscape, and innovation. It aims to provide the necessary capital for growth initiatives, and facilitate M&A by enabling businesses to invest in expansion and innovative projects as part of selling or buying a business.

Retaining Tax Incentives: This policy by the Conservatives will attract investment in the M&A sector, which will help enhance business valuations and support reinvestment into growth activities.

Labour:

Reforming Taxes: The reforming of taxes could impact profitability and reduce available capital for expansion. This, in turn, could make businesses appear less attractive to investors and buyers and make selling your business a challenging task.

Replacement of Business Rates: The new proposed system for replacing business rates may increase costs for some businesses while creating uncertainties in the M&A landscape. Under Labour's focus on equity and sustainable practices, companies that have the same outlook on the policy could find new growth opportunities for their businesses' long-term future.

Enhancing Workers' Rights: This policy from Labour looks at improving the rights of workers which includes labour conditions. Despite this coming with a possible rise in labour costs for businesses, companies considering an EOT will benefit from having their workers more motivated.

Liberal Democrats:

Abolishing Business Rates: The idea of abolishing business rates can help lower costs for businesses along with boosting profitability. Having your company financially boosted can make your business more attractive to potential investors and buyers when you consider acquiring, selling, or scaling your business to meet your long-term goals.

Environmental Duties: This policy looks at sustainable practices and duties within the workplace. Despite the risk of potentially increased costs, the policy aims to attract environmentally focused investors when buying businesses that align with their values.

Supporting Local Banking: Supporting local banking will aim to support small and medium-sized enterprises (SMEs) by increasing access to financing. By improving access to finance, opportunities can open for SMEs in the M&A landscape by promoting business expansion, growth, and economic development.

Election Outcomes: What They Mean for Your Business

The upcoming general election will significantly influence M&A activities across various sectors in the UK.

If the election results in a Conservative victory, a stable, low-tax environment could be created. This would then stimulate M&A transactions in sectors like technology and finance through private equity and deregulation support. A Conservative win could reduce regulatory burdens, simplify M&A processes, and attract investment, though divergence from EU standards might complicate cross-border deals.

On the opposite side of the spectrum, a win for Labour could see the UK M&A landscape experience tax reforms, for instance. This can potentially slow down various processes in M&A while fostering sustainable practices such as impacting renewable energy, manufacturing, and healthcare.

Labour has also made pushing its value of fairness a priority during the campaign, as the party's manifesto consists of an underlying focus to lead the UK into a more cautious environment in the M&A landscape. Under Labour's policies, though businesses could face higher costs and reduced margins, the outcomes could mean you leaving your business in better long-term condition if you decide to sell.

Aside from the other two parties, a win for the Liberal Democrats could see a focus on sustainability and corporate governance. This outcome has the possibility of leading the M&A landscape into more complex due diligence yet enhancing long-term business value and ethical standards. This would benefit various sectors including environmental services, consumer goods, and technology. The win could also see businesses enhance their valuations and investor appeal in the M&A landscape.

Whether you are thinking of scaling, acquiring, or selling your business, these policies will encourage a more dynamic and sustainable M&A landscape, ensuring you are creating the best possible long-term outcome for your business.

Navigating Political Changes in Business

There are many historical examples which illustrate how political changes have influenced M&A activities and highlight the need for strategic adaptability in response to political shifts.

For instance, the Brexit referendum caused a significant amount of uncertainty in the M&A landscape, which had a knock-on effect by delaying deals and prompting strategic relocations.

Another example was the U.S. Tax Reform of 2017, which boosted M&A activity by lowering corporate taxes and encouraging the repatriation of overseas cash. As the implementation of GDPR increased due diligence complexity in the EU, China began to crack down on tech firms. Even though this slowed domestic M&A down, it also inspired outbound investments.

Expert Advice from GS Verde Group

By analysing the potential political impacts ahead of the 2024 general election, it is crucial that you prepare your business for post-election economic scenarios.

At GS Verde Group, we keep up to date with changing political climates and position ourselves as specialists in guiding businesses through the complexities of M&A activities regarding these changes. We advise companies to stay informed about regulatory changes, and due diligence, and to adopt flexible strategies to increase growth opportunities and mitigate risks.

Corporate Finance Director & Group CFO, Craig Blackmore comments; "Successful transactions are built upon robust and rounded planning from the outset. Increasingly, consideration of financial, legal and tax matters in parallel is key to ensure that the moving parts do not adversely impact the direction of travel in a process. Cohesive and co-ordinated advice on all areas provides comfort that decisions are made in an informed and timely manner. GS Verde's multi-discipline team addresses all areas and combines from inception to completion of transaction."

With a multi-discipline team with expertise in navigating political and economic changes, we can assist your business in strategic planning, ensuring resilience and adaptability to the evolving political climate.

The GS Verde Group are business-focused experts in getting deals done. Combining all the services needed to complete a corporate transaction, including legal, corporate finance, tax, accountancy, and communications, GS Verde acts as a complete advisory team and provides a truly end-to-end service.