A battle of many fronts: What the local elections could mean for businesses

3 May 2023, 12:06

By Chelsea Whyte, Consultant at Rud Pedersen UK

On Thursday 4th May, voters in England will be heading to the polls to elect more than 8,000 local councillors across 230 councils. Strategically important seats, constituencies, and regions will be closely watched by keen politicos looking for a sign of what’s to come. However, businesses and investors should be paying attention as this local election could influence current and future UK Government policies as the Conservative Party attempt to regain lost ground. Those organisations involved in housing development and substantial transport and energy infrastructure projects, or where a locally significant employer faces closure, could easily become political footballs during local elections.

One thing is certain, the status quo is unlikely to remain, but where the pendulum swings may very much depend on who turns out to vote on the day.

The predicted outlook

The seats up for election this time were last voted on under Theresa May as Prime Minister and saw heavy losses. Predictions this time put the Conservatives down for even greater losses, with all other parties expecting to pick up seats in regional targets, plunging many councils into ‘No Overall Control’ or new leadership. How well the Conservatives do in these elections is likely to have a significant impact on when the next general election is called as they hedge their bets trying to wait out Labour’s current poll lead. While the next General Election is scheduled for Autumn 2024, there is a small possibility that the General Election could be brought forward in the event the Conservatives perform better than expected on Thursday.

However, the likelier scenario is that the opposition Labour Party, the Liberal Democrats, the Greens and independent candidates will make gains, paving the way for the next General Election to be as late as possible while the Conservatives take every opportunity to rebuild support and try to recover their voter base. Ultimately, the election is being fought on national issues and the lack of meaningful outcomes from the Government’s ‘Levelling Up’ strategy and the impact of recent strikes in the teaching, transport, and emergency services, will be telling. The strikes and increasing cost of living look set to return majorities of anti-Conservative votes across the country, with the potential to return a very colourful set of election results.

Opportunities for business

While many businesses have begun to pivot towards building their relationships with Labour due to their polling, they should not ignore smaller parties. In 2010 the Liberal Democrats became ‘king makers’ following the General Election and this could happen again. Significant gains for the Liberal Democrats could see the Conservative Party turning away from national infrastructure projects which have seen them haemorrhage votes in the ‘Blue Wall’ due to projects such as HS2. Businesses should also keep an eye on the policy directions of regional parties such as the SNP and NI parties in case a confidence and supply agreement is needed to form the next UK Government.

Thursday’s elections are one of the biggest events in the UK political calendar until Autumn’s party conferences. How the parties perform in these elections will likely influence the manifestos for the next general election, which will be discussed and debated at the conferences, and should guide businesses on the priorities for a future government.

With many councils predicted to go into ‘No Overall Control’ or have new political leadership for the first time in recent history, many local administrations will be looking to make their mark on their local areas, presenting an opportunity for businesses to engage and influence the direction of local policy. Highly contested policies around development and the environment are likely to be a hotbed of internal debate in parties, with differences of opinion likely at national and local levels. With regards to development, a reneging on national housing target policy from Michael Gove has already highlighted a shift in the Conservative Party to policies which are more palatable to voters in the ‘Blue Wall’ where they are rapidly losing support. How parties perform in distinct regions is likely to have interesting consequences for national policy, with compromises needing to be made at the senior levels of each party.

Local politics has an increasingly important role in the UK investment environment following policy announcements including freeports and future investment zones. Mayors such as Ben Houchen and Andy Burnham have made names for themselves nationally, leaning into narratives around ‘levelling-up’ and increasing devolution across the UK. As the government looks to enhance innovation across the length and breadth of the country, local authorities will become ever more important in attracting foreign investment to the UK.

Additional factors at play

Thursday’s elections will see the introduction of Voter ID. This election is the first full-scale roll-out of the contentious measure, expected to lead to a much lower turnout, especially amongst older, more Conservative-leaning voters who lack the required identification. While predictions now suggest that the Conservatives are likely to suffer the biggest losses as a result of voter ID requirements, some opposition sources have suggested these rumours are an attempt to pre-empt the significant losses expected of the party.

Not to be forgotten, the elections precede the coronation of King Charles III, and some have speculated that this weekend’s coronation was strategically placed just after the local elections, not to give local authority staff a welcome break after the pressure of hosting elections, but to provide a welcome smoke screen should the results not go as hoped for the national governing party…

*Chelsea Whyte is the Prospective Parliamentary Candidate for the Liberal Democrats in Spelthorne.