Red Blue or Hung

6 Minutes

Predicted to be a Tory landslide just weeks ago, today’s election has turned out to be unexp...

By Pareto Team


Predicted to be a Tory landslide just weeks ago, today’s election has turned out to be unexpectedly tumultuous and uncertain.  With 3 feasible outcomes now clearly on the table: Red, Blue or Hung – now is the time to anticipate the impacts of each one on your business.  

They say things come in threes. Our clients seem to agree, as three clear issues appear to be influencing their commercial strategies at the moment: Brexit, Employment and Taxation. 

Whether Parliament is predominantly Red, Blue, or Hung from tomorrow, Brexit, Employment and Taxation will remain the key concerns of business leaders. So let’s explore how each of the different outcomes of today’s election are likely to affect them. 



Conservatives Win the Election:


Hard Brexit continues. Zero hours contracts stay. Taxes on businesses maintain or reduce.

The advantage with the Conservative approach and policies is that they’ve already given us some insight with the April budget. Besides pledging to keep corporation tax low, there are some other changes for business we can examine. Also, Brexit is obviously something we have more clarity on with the Conservatives as they’ve already begun to deal with the fallout first-hand. 

Brexit Negotiations:


Having abandoned the hope of remaining in the Single Market, the Conservatives now plan to negotiate a free trade agreement with the EU and will need to negotiate individual trade deals with any non-EU countries. Where this might be interesting for business is in opening up new opportunities with non-EU countries and one challenge might be resourcing any new commercial strategies. 

Things are still very uncertain, as they will be for some time to come under any party’s leadership. The Conservatives’ overarching approach is to hold tough negotiations and that ‘no deal is better than a bad deal’. 



The Conservatives have pledged to increase the Minimum Wage to over £8 by the end of the decade and to encourage businesses to use the Living Wage (£7.85 for over-25s) where they can afford to. They intend to keep the controversial Zero Hours contracts to support the ‘Gig Economy’ which is good news for any employers who currently use Zero Hours contracts. The 'Gig Economy' basically refers to the use of short term contracting, giving businesses the flexibility to scale up or down. At Pareto, we support businesses in this area as contracting is a growing phenomenon (i.e outsourcing).



The Conservatives have already pledged to raise the threshold for the 40p tax rate to £50,000 and to keep corporation taxes at their current level while also not increasing VAT. 

They have indicated that they hope to reduce corporation tax to 17% by 2020, which would be good news for the pound in the current climate. However, they are removing the ‘triple lock’ promise David Cameron brought in and replacing it with a statement of intent; to lower tax and simplify the tax system.


Labour Win the Election:

Brexit talks aim to keep us in the Single Market. Zero hours contracts banned and minimum wage increases. Measures to cap high earnings. 

There has naturally been much discussion of Labour’s manifesto this election, not only because they’re the opposition but because, considering the short notice, they’ve delivered a very detailed and apparently costed manifesto (though this has been the subject of some debate). Below are outlined what we believe to be several of the most pressing potential changes for businesses to consider. 

Brexit Negotiations:


Labour will be looking to essentially start from scratch with EU negotiations in order to try and secure UK access to the Single Market. They also intend to immediately guarantee the rights of all EU citizens to continue to live and work in the UK, which is good news regarding the STEM skills shortfall. This is another area we are helping clients address, as STEM talent is hard enough to find even with EU resource. We are focusing on talent for customer-facing STEM roles, contact us for further details. 

While an added delay in negotiations could be problematic, the possibility of retaining access to the Single Market may be enough to sway some business leaders. This could possibly lend some stability to the pound however it’s widely accepted that a change in government presents the greater risk for an initial fall in the pound. How long it takes to stabilise could depend completely on the results on a new set of Brexit negotiations with the EU. 

There may be some initial work to be done in protecting margins through renegotiating with clients, this is something we’ve already supported some of our clients with through our Negotiation Skills training. 


Labour have already said that they intend to start work within their first week in power to bring in Labour policies such as the increase of the minimum wage to £10 (currently £6.70) and the scrapping of tuition fees. 

On the topic of Zero Hours contracts, Labour have come out and said definitively that they will ban the use of Zero Hours contracts and give rights to any employee working for more than 12 weeks to have a proper employment contract. This will obviously have implications for all businesses who currently employ people on zero hours contracts and may result in headcount increases or decreases and a shift in resource. 

Labour aim to crack down on high earners through forcing businesses to be more transparent about pay and the ratio between its highest and lowest earners, penalising those who have more than a 20:1 ratio and introducing an ‘excessive pay levy’ for those companies employing large numbers of staff on high pay. This will be problematic for many businesses and we’d advise leaders to consider how they might reward and retain their top earning talent in ways that go beyond basic pay and bonuses. Pareto are available to offer assistance with executive recruitment and can guide you in this. 

Less immediate changes include increasing paternity leave to 4 weeks and the introduction of 4 new public holidays. 


The most controversial element of the Labour’s manifesto for UK businesses is corporation tax. Labour’s proposal is to raise corporation tax to 26%, from its current level of 19%. The corporate world is naturally concerned about the impact this will have on big business - will it stay in the UK, or re-locate, depleting our economy and overseas investment?  

Hung Parliament:


Another Brexit referendum? Otherwise your guess is as good as ours!

As this election has become such an unexpectedly difficult one to call we need to consider that that we might have a Hung Parliament. If so, both Labour and the Liberal Democrats have indicated that they wouldn’t pursue a coalition and Labour would prefer to form a minority government. But as they say ‘never trust a politician’ we’ll have a cursory look at this potential outcome anyway. 

Let’s consider the impact Liberal policies might have on a Labour government. 


In the case of a Labour/Liberal coalition the Liberal Democrats may push for a second referendum but as Labour have pledged to respect the result of the first one, this is unlikely to actually happen. We’d imagine that negotiations with the EU would start anew and lead to a fight to remain in the single market as Labour are proposing.


There is very little to go on regarding their policies on employment law but they do have some around family such as offering some free childcare, so we imagine they’d fall into line with Labour on employment. 


The Liberal Democrats want to maintain corporation tax at its current 19% level. But as the minority party in a coalition government it’s unlikely the Liberal Democrats would get their way and corporation tax increases would be likely. 


It’s going to be a tense wait for UK voters. If you haven’t yet cast your vote then read the manifesto summaries from the broadsheets. If you have, then we’ll join you in waiting impatiently for a result! 

Whatever the outcome, commercial growth is fundamental to your success. To future proof this, you need to be armed with the very best sales talent at every level, and a proven process to keep performance and KPI’s high. 

Please contact us for a no obligation chat on how to navigate your business through any sales challenges you can see on the horizon.

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