The Labour party says if it wins, it aims to strengthen the resilience of supply chains. Here’s what that means for your company

On July 4, the UK is going to the polls and it is widely expected that the public will vote in Labour to lead its next government. The Labour party says that the defining mission of its leadership will be to restore growth. What does that mean for the supply chains of UK companies?

In a document, Prosperity through Partnership: Labour’s Industrial Strategy, the party laid out its mission for the UK’s economy. Within that mission is a stated goal to “strengthen the resilience of supply chains in key sectors.”

The past few years have demonstrated the need for this resilience. Between the war in Ukraine that has driven up energy prices, and pandemic-related supply chain disruptions, it can at times be difficult and costly to access critical goods.

The UK’s economic strength is based on its openness but these, or other, kinds of events can happen again. The Labour party wants to take a more strategic approach to the economy to be better prepared. It plans to set up a supply chain taskforce to review potential supply chain needs across critical sectors, which may include defence, energy, construction, medicines and food. The taskforce will assess the vulnerability of critical supply chains to extreme risks and the potential requirements of responding to these shocks.

The plan is to provide different solutions to address different problems such as the government intervening to ease particular pinch points, removing barriers to supply, enabling sufficient storage capacity and diversifying supply. This is most especially to make sure the UK is not excessively dependent on hostile states. 

EU supply chain regulations

New EU legislation will likely come into force during the Labour government, if it moves into #10 after July 4. This includes the Corporate Sustainability Reporting Directive (CSRD) which will impact UK companies that have substantial activity in the EU. This impact extends beyond the companies directly required to report, emphasising the entire value chain. Companies will need to gather and disclose data on their suppliers in addition to reporting on their own operations. UK companies that didn’t think CSRD would apply to them may find they are required to disclose data.

The Corporate Sustainability Due Diligence Directive (CSDDD) will come into force in a number of years for UK companies but it also puts greater scrutiny on supply chains’ impact on both people and the planet. If a UK company’s activities have a high turnover within the EU, the directive applies to it. And if the UK company is part of the value chain of a company subject to the CSDDD, it would have to comply with the standards established by the directive, even if it is not required in their country. This applies to companies of any size, as long as they do business with, or are otherwise involved in the value chain of, in-scope EU companies. This means a manufacturer of auto parts in the UK that sells its products to an EU car company would be obligated.

UK companies doing business with large EU companies might face a choice: Either stop doing business with those companies or make sure to adapt their own work practices and policies to these new EU standards. 

Compliance and the UK General Election – Special Webinar

Every sector could be impacted and every area of compliance is likely to be reviewed by the next government. From overhauls of financial services regulation, reviews of data protection law, closer alignment with EU regulations and an expansion of health and safety protections, the next parliament will see compliance at the centre of the regulatory agenda.

With everything from whistleblowing reform to overhauls of corporate governance, new employment rights like menopause leave and expanded equal pay rules, alongside crackdowns on tax evasion and expansion of the money laundering regulations, organisations large and small should prepare for the outcome of the general election.

This webinar will cover:

• What the main parties are pledging on key compliance areas
• Potential changes to legislation including the Equality Act, sexual harassment and employment rights
• Expected legislation on AML, bribery, sanctions, fraud and economic crime
• Possible expansion of regulations around GDPR, AI and health and safety
• Preparing your organisation for future regulatory changes and new requirements