A political sea change: How businesses can navigate “Election 2024”
By Ella Fallows, Head of Public Affairs, UK, Weber Shandwick
In 2024, 50% of voters globally will go to the polls. But what impact will those votes have on the world at large – and what will their outcomes mean for businesses trying to navigate a complex political environment?
In recent weeks across a series of client events in London, we’ve explored this year’s US and UK general elections to understand what these two seminal political moments might mean for businesses on both sides of the Atlantic. At a time when everything is “political” and companies are dealing with multiple competing (often contradictory) viewpoints from customers, employees and stakeholders, how should businesses think about navigating these moments? And what considerations are at play?
- Everything is political.
At a recent event with leaders from companies spanning a diverse range of key strategic growth sectors for both US and UK markets (healthcare, tech, retail, the creative industries), Pam Jenkins, The Weber Shandwick Collective’s Chief Public Health Officer & Chief Public Affairs Officer, discussed how companies are being scrutinised for every decision against a backdrop of extreme politicisation. From which celebrity is used for an advert – to the statements a company puts out about geopolitical issues or whether a statement is put out at all. All will be considered as taking a political stance.
Many companies are considering how they position themselves during this election year when engaging with political stakeholders. Will a site visit suggest a political allegiance? How do you balance the real need to engage with a potential incoming government with the need to show political balance? How might a spokesperson’s personal views muddy the water for your brand?
Our insight suggests it’s essential to engage – and as long as you’re able to demonstrate balance, there is little harm in doing so. But many businesses are having to look much more closely than ever before at how they engage.
- Change is coming.
Almost certainly in the UK, but potentially on both sides of the Atlantic, change is coming to government. In the UK, it’s very likely we’ll see Labour take power with the election of a Starmer-led administration after fourteen years of Conservative-led government. In the US, even in the event of a Biden win – with elections in both houses and across the country likely to see a new wave of elected representatives – expect some upheaval in the policies being made and delivered.
Change takes time. And in the UK, any new government will need time to implement machinery of government changes, appoint ministers (clocking in at around 150 roles, this is no mean feat for a party whose parliamentary presence is likely to be around 60% new MPs), hold an emergency budget, and get detailed policy plans to departments to begin rolling out.
Engaging with government at this point will be particularly challenging – and relationships with officials will be essential for continuity. The new government will need a strong and effective partnership with business in delivering on its promises. Being the “go-to” corporate partner for government will help position companies effectively for the future.
- There is no money.
Former Labour Treasury Minister Liam Byrne’s infamous words, “I’m afraid there is no money”, written as a goodbye note to his successor after Labour lost the 2010 election, ring truer than ever today. While the global economy struggles, so too will domestic economies.
A quarter of UK citizens have savings of less than £100. The Office for National Statistics estimated that UK borrowing for the last financial year overshot forecasts by around £6.6bn. And Rishi Sunak has been cautioned by the IMF to toughen up measures to cut the UK’s public debt. Almost every level of society will feel the pinch – and this will shape election campaigns.
Political parties will try to present convincing solutions to the problem and governments will become more extravagant with their tax and spend promises to attract and retain voters (“fiscal slippage”, a common phenomenon when elections are looming). Despite the bleak economic environment, the UK government still insists it will do all it can to cut taxes in an autumn fiscal event, but it remains unclear where that money will come from. With no obligation for any party to fully cost policies pre-election, businesses must treat promises with a healthy pinch of salt and make their case to cross-party policymakers that they require a stable, long-term fiscal environment to conduct their operations.
- Geopolitics is everything.
The existing world order hangs precariously in the balance, with wars in Ukraine and the Middle East both demanding resource and threatening to derail existing multilateral structures. The political and economic impact of these shocks continues to be felt globally.
A Trump win in the US could have a large impact on how the country approaches its global responsibilities and may lead to a shift in alliances elsewhere around the world – and even potential splits in NATO. Russia’s continued impact on energy supply and China’s growing dominance in tech will further complicate an already complex market system for governments worldwide as autocracies threaten the dominance of democracies in the free market and the Global South continues to feel increasingly overlooked and isolated.
Incoming governments are likely to have little time and energy to focus on domestic issues and risk becoming consumed by external events. For business, engaging with these governments will require tact, patience and helpful solutions, rather than just a list of immediate policy asks.
Understanding the new political landscape is paramount to business success
During these turbulent political circumstances, businesses face a pivotal moment to recalibrate their strategies, engage with agility and champion stability amidst uncertainty – ensuring they remain resilient and adaptable in the face of evolving political landscapes.
