Accordingly, the UK formally left the EU on 31 January 2020. In a referendum on 23 June 2016, the UK electorate voted to leave the EU. These changes can be economic, legal, or social and can include the following factors: What are the Political Factors Affecting Business in UK?Īs a business in the UK, you have to be wary of political factors that can alter the entire business scenario. Owing to that, it is critical for every business in the UK to always plan for the variability in policies to ensure it maintains a stable business environment. Since the country’s exit from the European Union, there have been numerous changes in policies and actions of the prevailing government. Numerous political factors in the UK impacts businesses and can also introduce a risk factor that can cause businesses to suffer losses or compromise their profit stream. Note that the prime minister is the head of the government who is elected for a five-year term.įour political parties mostly dominate the politics of the land: Labour, Conservative, Liberal Democrats, and Scottish Nationalist Party. It is noted as one of the most powerful countries in the world with modern parliamentary democracy and a constitutional monarchy with the monarch (currently Queen Elizabeth II) being the current Head of State. The UK is made up of England, Wales, Scotland, and Northern Ireland. Indeed increase in taxes, fees, and greater regulations can hamper businesses or entire industries.Īnd aside from having a direct impact on businesses, these political factors can also impact other factors too and this can have a massive effect on the business and its operating environment. Have it in mind that they can create subsidies, tax the public and give the money to an industry increase taxes to imported products to lift prices and ensure domestic products sell more. Without doubts, governments tend to have so much power over businesses, and most often, there is really nothing these businesses can do to limit that power, and with these oversights, governments can make decisions that can impact businesses in various ways. Political factors are those critical decisions and laws governments make that can impact a business by making the market environment more or less convenient for that business.
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