One of the things businesses cherish the most is stability. That’s been in short supply in recent years, now more than ever with Keir Starmer resigning as Prime Minister, and could be even further away if the 2029 General Election sees another change of government.

With prospective PM Andy Burnham rising through the ranks after the landslide by-election victory against Reform in Makerfield, there is likely to be more instability ahead as the country settles into yet another new agenda and changes.

Reform evokes strong opinions from all sides, but even with the loss in Makerfield, they appear to be the only other party strong enough to defeat Labour. So how should businesses feel about these two parties? Other than marking another sea change in British politics, should we be concerned about the economic impact of Reform’s policies? While it’s a mixed bag, the short answer is yes—and it’s worth planning ahead now to avoid what could be a worst-case scenario if Burnham’s next few years don’t live up to the hype.

Labour’s EU reset

After years where Labour politicians were terrified of the merest mention of Brexit, the tide seems to be turning. While the current government still sees the issue as ‘settled’, it’s also begun to openly acknowledge the negative effects of Brexit, particularly on the economy. While this is an easy way to snipe at the Conservatives for striking a ‘bad deal’, it’s also a manoeuvre designed to allow for improved relations with Europe, bringing in policies that will bring the UK and EU closer together, without re-entering the Union.

While Labour under Starmer explicitly ruled out a return to the Single Market or the Customs Union, the government has made a big play of cooperation on a number of fronts. As well as using current global instability to press for greater defensive cooperation, Starmer had tried to smooth over the logistical friction of the Trade and Cooperation Agreement (TCA). This has so far included efforts to secure mutual recognition of professional qualifications, ease border delays for agricultural products, and foster closer cooperation on security and technology. With Burnham’s previous standing as a staunch Remainer, it’s likely that a bigger push to strengthen European trade ties will continue to be made.

Other plans are also in the works. As well as rejoining the Erasmus+ scheme, there are also negotiations around joining the EU’s internal electricity market, linking the UK and EU emissions trading systems, aligning agri-food standards through a new Sanitary and Phytosanitary (SPS) area, and launching a new youth experience scheme. All of this has potential positive knock-ons for businesses in terms of trade, energy prices, and access to talent.

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On the European side, this has been a welcome change. Labour’s approach has started to rebuild trust in Brussels, with pending changes that could provide British exporters with a more stable framework for trading with their largest market. Yet political stability is a fragile commodity. As much as in Britain, European leaders recognise the fragility of the current government. Even if new agreements are struck and laws are passed, there’s a sense that they are imperilled by the potential for a complete 180 if Reform get into power in 2029.

What are Reform’s plans for businesses?

On paper, many of Reform UK’s business policies might not seem that different from Labour’s. The party is aiming to slash red tape for businesses and pursue aggressive tax cuts, creating an environment of deregulation. Unlike Labour, this includes promises to raise the corporation tax threshold, raise the personal allowance for employees, and abolish hundreds of retained EU regulations that they argue hold back British productivity.

Reform’s focus is on asserting the autonomy they feel has not been taken advantage of after Brexit. They would, for instance, point to the many areas in which the UK still mirrors EU legislation as opportunities for the UK to reduce burdensome regulations that cost businesses money. Exactly what this would include is still unclear, but their stated aim is to “ensure that no foreign court, treaty, or institution overrides the will of the British people or the authority of Parliament”.

That last bit is likely to put a spanner in the works of current and future deals with the EU. One of the core components of many of the deals struck by the current government is regulatory alignment, on which the EU requires certain legal guarantees. While Starmer’s government was trying to lock in these deals through the passage of a ‘dynamic alignment’ bill, this may not make it through parliament. There is also the prospect of Reform simply ignoring deals and absorbing the cost of non-compliance, selling the idea that UK sovereignty is more valuable than whatever benefits might be lost.

Immigration, visas, and the skills challenge

On paper, UK sovereignty might sound highly attractive to entrepreneurs looking to reduce their overheads and reduce bureaucracy. Yet this kind of sudden, sweeping deregulation can be double-edged, if the positive side even has an edge at all. For companies integrated into European supply chains, the wholesale abandonment of EU-aligned standards could create massive compliance issues. If a British manufacturer no longer adheres to UK regulations that mirror EU safety or environmental standards, exporting those goods to France or Germany suddenly becomes vastly more complicated and expensive, much as it was immediately after the Brexit transition period.

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There is also the potential impact of a Reform victory on the British labour market. Reform UK’s headline policy is a strict, legally binding cap on net migration, alongside the ending of Indefinite Leave to Remain, and the introduction of an Employer Profits Tax on firms that rely heavily on foreign labour. Even emergency visas are planned to be strictly capped, with any business hiring a foreign employee in a skills shortage also being required to train a UK employee in parallel.

For those sectors already grappling with chronic skills shortages, this could pose an existential challenge. British hospitality, agriculture, healthcare, and construction have all historically relied on a mix of domestic and international talent, and are still massively suffering from the end of EU freedom of movement. While the intention behind Reform’s policy is to compel companies to invest in training British workers and raising wages—not unnoble in itself—that transition can’t happen overnight.

A sudden freeze on international visas would leave many businesses unable to fill critical roles, driving up labour costs and potentially forcing companies to scale back their operations. Tech startups and financial institutions in the City of London, already punished by barriers to trading and talent, would find their recruitment pipelines even further constricted. All of this threatens to further diminish the UK’s status as a hub for global talent.

The green transition in the crosshairs

Another area where a Reform government would radically diverge from current policy is environmental policy. The party has been vocal in its criticism of the UK’s legally binding Net Zero targets (an issue Burnham has championed) arguing that the rapid transition to green energy imposes unfair costs on British consumers and businesses. Reform has pledged to scrap green levies, fast-track licenses for North Sea oil and gas exploration, and abandon policies aimed at phasing out fossil fuel reliant technologies.

That will come as a shock to the UK’s largely thriving green energy sector, which has seen billions of pounds of investment from both domestic and European firms. Car charging spaces are now a common sight across the country, while zero emission grants have seen a steady uptick in electric vehicle ownership. Wind power meanwhile has been an overwhelming success, powering 15.5 million homes in 2025. Renewable energy developers, electric vehicle manufacturers, and supply chain companies could all see their regulatory support frameworks evaporate.

This pivot would also create another rift with the EU, which is moving forward aggressively with its own European Green Deal. The EU is progressively implementing the Carbon Border Adjustment Mechanism (CBAM), a tariff designed to penalise imports from countries with less stringent climate policies. A Reform-led UK that abandons its climate commitments would find its exports to Europe hit by hefty carbon border taxes, undermining the competitiveness of British goods on the continent.

Ramifications for mainland Europe

The ripples of a Reform victory would be felt far beyond the shores of the UK. Despite Brexit, the UK remains a massive and important trading partner, and a major consumer market. A UK government focused on aggressive deregulation and trade friction would inevitably force a rethink among European exporters, and could see contingencies put in place sooner rather than later.

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Take those logistical hubs in France, Belgium, and the Netherlands, for instance, who have already had to adapt to post-Brexit conditions. These hubs would need to brace for renewed border delays and administrative complexities, as British standards diverge further from the EU norm. European firms with UK subsidiaries might decide that the added costs of managing a fractured, non-aligned entity outweigh the benefits, leading to even more repatriation of capital and jobs back into the single market.

More broadly, a Reform victory would alter the geopolitical dynamics of Europe. At a time when the EU and the UK are seeking common ground on defence, energy security, and tech regulation, a populist, Euro-sceptic government in London would tilt the EU away from the UK. The spirit of partnership Labour is trying to foster would return to the relationship under the post-Brexit Tory party (many of whom are now in the Reform cabinet): transactional, confrontational, and actively inhibiting pan-European projects and supply chains.

Preparing for a Reform government

It’s worth saying that many British businesses are far from happy with the current government, or the current business environment. But economic indicators prior to the war in Iran were much more encouraging, and the current government’s focus on a constructive relationship with Europe has been warmly greeted by international businesses and bodies, if not everyone at home.

What Reform UK introduces is a layer of opportunity for some, but also a thick layer of political risk. However you individually feel about it or the party as a whole, it’s a prospect that forward-thinking business leaders can’t afford to ignore. The vast divergence between the current trajectory of Labour’s policies and the shifts proposed by Reform could be another seismic event for British commerce.

The prudent response is to start planning to mitigate these risks today. Whether that involves diversifying supply chains, checking how you might be impacted by future visa restrictions, or looking for alternative routes to expand into mainland Europe and maintain access to the Single Market, adaptability continues to be the ultimate competitive advantage.