Business reaction as SNP loses 38 Westminster seats

First Minister John Swinney

The Scottish National Party (SNP) has lost 38 Westminster seats so far in the UK general election — amid a low turnout by voters — with one seat still to be declared.

Scottish Labour made huge gains across the central belt of Scotland, taking 37 Westminster seats so far, with the SNP winning nine and the Scottish Liberal Democrats five.

The Scottish Conservatives won five seats in the UK parliament, down from six, with leader Douglas Ross failing in his bid for Aberdeenshire North and Moray East.

UK-wide, the Labour Party won a landslide majority, with nearly all the results declared.

Labour is set to take 412 Westminster seats with a majority of more than 170. However, Labour still took the lowest share of the vote for a UK governing party in history.

Labour’s vote increased by less than two points from 32% to 34%, while the Conservatives saw their vote share fall to around 24%.

UK-wide, the Conservatives are forecast to win as few as 122 seats. The Liberal Democrats achieved their best result since 1923 with 71 seats.

Turnout across the UK was 59.9 %, down 7.4% on the 2019 election and the second lowest in a UK election since 1885.

Keir Starmer becomes UK prime minister with Angela Rayner appointed deputy prime minister.

Rayner also becomes UK secretary of state “for levelling up, housing and communities.”

Rachel Reeves becomes the UK’s first female chancellor (finance minister). Yvette Cooper becomes UK home secretary and David Lammy is the UK’s new foreign secretary.

Ian Murray becomes UK Secretary of State for Scotland.

First Minister John Swinney described the Westminster results as “very, very difficult and damaging.”

Swinney said: “The Scottish National Party needs to be healed and it needs to heal its relationship with the people of Scotland, and I am absolutely committed to doing that.

“I have to accept we failed to convince people of the urgency of independence in this election campaign.

“Therefore, we need to take the time to consider and to reflect on how we deliver our commitment to independence – which remains absolute.”

The next election for the semi-autonomous Scottish Parliament will be in May 2026. Currently, of the 129 members of the Scottish Parliament, the SNP has 63 MSPs, the Scottish Conservatives 31, Scottish Labour 22, Scottish Green Party 7, Scottish Liberal Democrats 4 and Alba Party 1.

Scottish Labour leader Anas Sarwar said: “Today, the hard work for change begins. A UK Labour Government delivering for Scotland.

“But let’s be really clear — it’s also about redoubling our efforts, so we can complete that two-stage process in 2026 when we hopefully elect a Scottish Labour government.”


Sara Thiam, Chief Executive Officer, Prosper, the Scottish economic network with over 500 members from all sectors: “Our simple question for all parties at this election was ‘will your policy programme support a prosperous future?’

“The new Prime Minister has said that sustained economic growth would be the first mission for the Government and it has been given a strong mandate to deliver positive economic changes.

“Prosper set six key tests to grow Scotland’s economy and Labour’s plan include many policies that our members support, such as a new Industrial Strategy to increase investment and innovation, skills reforms, and improvements in EU trade. But there are areas, including the energy transition, where we have concerns about its approach.

“Scotland must be ‘at the table’ as the business of government begins and policies are implemented. Government can best unlock opportunities and tackle the tests for our economy by working with private, public and third sector partners.

“Prosper and our members are ready to work with the UK and Scottish Governments to build a strong economy, based on our long-term values of purpose, innovation and collaboration.”

Ben Ritchie, Head of Developed Market Equities, Abrdn: “A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world. Labour’s pro-growth agenda is key to delivering the tax revenues needed to fund public services, with private capital playing a vital role in supporting investment.

“If the new Government get this right, businesses with significant exposure to the UK economy should be the likely winners – a shot in the arm in particular for companies in the FTSE 250 and FTSE Small Cap.  With just a little more patience, investors could finally be rewarded.

“A key priority for the new Government should be to make UK equities more attractive for both domestic and international investors.  One of the quickest and most effective way to deliver this is to scrap stamp duty on UK shares, making Britain more competitive, rewarding savers and attracting vitally needed inward investment.”

Liz Cameron, chief executive, Scottish Chambers of Commerce: “Now the election is over, the real work of government must begin and that means supporting job creation and enabling Scotland to remain ahead of the game in global competitiveness.

“We need an ambitious programme of pro-enterprise and pro-growth policies, but without urgent action, the opportunity for positive change clearly mandated by the electorate will be wasted.

“Now more than ever we need our leaders at Holyrood and Westminster, and our new Scottish MPs, to work together to put the economy and growth at the forefront of all policy discussions to ensure that Scotland remains prosperous for all.”

Kathleen Brooks, research director at XTB: “The reaction to the UK election result has mostly been felt in the UK stock market. The FTSE 250 is higher by more than 1.5% and the FTSE 100 is up 0.2% so far today. Unsurprisingly, the best performers in the UK equity space are the housebuilders, who were always seen as the big winners from a Labour victory.

“Five out of the top ten performers in the FTSE 100 so far today are housebuilders, with Persimmon, Vistry and Barratt taking the top three spots. Persimmon is the top performer and is higher by more than 3% on Friday, as investors wait for Labour to act on their pledges on planning reform and to build more homes.

“As we have mentioned, Sir Keir Starmer does not have the fiscal headroom to throw money at all the UK’s problems. The focus will be on whether he can deliver the growth that he has promised. Early in his tenure as Prime Minister, we expect a blitz of legislation, including the employment rights bill, which will look to ban zero hours contracts, strengthen trade unions and improve workers’ rights from the first days of employment.

“This is normally something that sends shivers down the spine of business and stock markets, however, Labour have promised to consult business as this law makes its way through parliament. Thus, ahead of this election, Labour has reached out to business and these bonds could be keeping financial markets calm in the aftermath of the largest majority for Labour since 1997.”

Nalaka De Silva, Head of Private Markets Solutions, Abrdn: “Delivering growth to support public spending is a key priority for the new Government with planning reform expected to be a focus in the first 100 days in office.

“We’re encouraged to see planning reform at the heart of policy priorities and hope this translates into swift, tangible reform and funding not only in the short term but with a long-term vision and stability. This is desperately needed to address the deep-rooted issues in the savings and pensions markets. By supporting the flow of capital into productive sectors, the UK’s comparative advantage can be maintained.

“In line with the productive finance initiatives, there is a role for directing more capital into domestic assets to support growth. We believe urban regeneration via large-scale real estate projects, specialist equity (growth equity and venture capital), social and economic infrastructure including renewable energy project assets have an important role in boosting the economy and providing investors with diversification.

“We’d like to see corporates and trustees empowered and incentivised to diversify pension asset allocation into a wider range of equities and alternative assets within an appropriate risk framework. Along with the investment management industry being encouraged by Government to develop products and vehicles to provide access to private markets to long term savers.

“During the first 100 days, we expect to see enablement for such allocations of capital via continued pensions reform which will allow for accrued benefits to be shared with corporate sponsors should schemes run on versus a move to insurance buyout.  We anticipate further movement on the cost disclosures issues in the Investment Trust Sector and we hope to see more incentives for long term savers.”

Sandy Begbie, Chief Executive, Scottish Financial Enterprise: “It’s clear that the new Prime Minister will have a daunting in-tray with the country facing a litany of serious economic challenges, but with the right interventions there are also huge opportunities to be unleashed.

“As we highlighted in our election manifesto, sustainable growth must be the government’s guiding ambition. To achieve this, Starmer must demonstrate good government, foster a thriving business environment, champion green and sustainable finance, and invest in our people and their skills.

“Policy alignment within and between governments is key, and we would like to see the UK and Scottish governments working together to remove barriers, empowering industry and helping to deliver economic growth.

“Scotland has a fundamental role to play in delivering the economic growth that the UK so desperately requires, and our world class financial services industry is ready to play its part.

“Our sector is already worth £14.3 billion GVA to the UK economy each year, employing almost 150,000 people in high-wage, high-skill jobs.

“We look forward to working closely with the UK and Scottish Governments to unlock further growth in our sector, adding an additional £4bn -£7bn to the UK economy by 2028.”

Christian Pittard, Head of Closed-Ended Funds and Managing Director, Corporate Finance, Abrdn: “The new government must urgently look at fixing the cost disclosure rules which are holding back the UK’s closed end fund sector. There’s nothing to lose and everything to gain, coming at zero cost to the public purse while boosting investor confidence and investment in the UK.

“Closed end funds provide a critical source of capital for those large-scale real estate, specialist equity, infrastructure and renewable energy projects that, political consensus agrees, are needed to power the nation’s growth.

“Misleading and unhelpful rules on cost disclosure for investment trusts are choking investment into these productive areas and must be addressed immediately.

“It has impacted investor sentiment to the point where the disclosures could be adversely affecting investment decisions.

“Reforming UK capital markets can’t be done without solving this conundrum, given that the sector accounts for around 36 per cent of the FTSE 250, according to the London Stock Exchange.  At abrdn, we also believe capital markets reform should go further and encourage a national culture of saving and investing that would provide even more capital for growing our economic pie.

“Stamp duty on UK shares and UK domiciled investment trusts has distorted capital flows, putting the UK at a competitive disadvantage compared to international peers, further hampering economic growth. By cutting this unfair and distortive tax, the new government could make great strides in creating the healthy, competitive investment environment the country so badly needs.”

Susannah Streeter, head of money and markets, Hargreaves Lansdown: “It’s a Labour landslide victory bringing in a political new guard which has vowed to make big changes to the UK economy, but given poll forecasts the result has caused few ripples on financial markets.

“The FTSE 100 was in positive territory in early trade and the pound was largely unchanged against the dollar, as the exit polls came in and lifted only very slightly as the overall result became clear, hovering around $1.276. The lack of movement was unsurprising given that the overall result had already been priced in.

“However, the domestically focused FTSE 250, gained more ground, with a little more confidence swirling about the UK’s prospects. Nevertheless, with an estimated 35% of the vote, Labour still took the lowest share for a governing party in history.

“There may be a honeymoon period for the new administration, but then difficult decisions will have to be taken in office. The size of the victory and the upswell of support for smaller parties and independents will leave Labour MPs concerned about the safety of their seats at the next election.

“They know they have to deliver for the electorate but are likely to be hampered by a commitment to be fiscally responsible and restrain spending.

“The priority will be keeping the markets unruffled in the first days, weeks and months of the new administration and not overdoing spending pledges. There may be some tinkering with the borrowing rules at some point in the future, to distinguish between day-to-day spending and investment, to propel long term growth, potentially loosening the purse further ahead.

“So far, this doesn’t seem to have perturbed the debt markets, with bond investors still appearing to be more sensitive to interest rate speculation than the investment plans of an incoming government. 10-year gilt yields barely changed as the exit poll results came in, hovering around 4.2%, down from almost 4.7% last October.

“This result comes on the heels of a steady rise for the UK market, retaking its crown as Europe’s most valuable for the first time in nearly two years last month. With political turmoil in France now taking centre stage, the UK looks finally set to enter into a period of financial stability which has the potential to spark renewed investor interest in UK assets.”

Alastair Black, Head of Savings Policy, Abrdn: “We were delighted the Labour manifesto committed to undertaking a review of the pensions landscape recognising the importance of both delivering better pension outcomes as well as encouraging investment in the UK.

“The pension review provides a chance to take a step back and implement in a considered way taking on feedback from the industry. Current levels of contributions will not deliver adequate retirement outcomes for the majority.

“We have previously called for minimum auto enrolment levels to substantially increase, and ideally doubled to 16%. Setting out a clear roadmap and timescales to increase towards this level will both help deliver adequate retirement outcomes to more people and boost the available amount of assets which could be invested into the UK.”

Susan Love, Strategic Engagement Lead for Scotland, ACCA (Association of Chartered Certified Accountants): “Key to getting the UK economy firing on all cylinders is restoring trust and transparency in our business ecosystem so we’d urge the new government to accelerate long-awaited reforms to the audit regime and reverse the collapse in HMRC service levels.

“For Scotland’s economy to thrive, many in the business community will be hoping to see a new era of Scottish and UK governments working effectively together to realise economic opportunities including planning for net zero, improving our infrastructure and investing in our people.”

Neil Davy, CEO of Family Business UK: “Having campaigned on a platform for growth, we are looking forward to working with the new Government, on behalf of family businesses across the UK, to ensure the specific needs of the family business sector do not get overlooked.

“90% of private sector firms in the UK are family-owned businesses, making-up a significant portion of the UK economy. Family businesses need policies that give them the confidence to plan for the long-term, invest in their people, the communities in which they are rooted and ensure their business can confidently be passed to the next generation.

“Labour must be sure they don’t undermine this with policies that could have catastrophic consequences for family businesses or put investment, jobs and growth at risk.

“For the family business sector, business property relief (‘BPR’) – which forms part of the Inheritance Tax regime – is a critical policy that allows business owners to plan for the long term and ensure their business can continue, without penalty, when the next generation takes the reigns.

“Successive governments, for almost 50 years, have understood the role of BPR in allowing family-owned businesses to thrive. Speculation that the new government views BPR as a loophole and could change or scrap it, is extremely damaging.

“We would ask for clarity of Labour’s intentions, at the earliest opportunity, and we hope the new Chancellor and Business Secretary come and talk to us about the importance of retaining BPR to ensure family businesses can continue to successfully contribute to the long-term growth and prosperity of our economy and communities across the country.”

Lindsay James, investment strategist at Quilter Investors: “Labour has won a landslide that is not just historic, but utterly devastating for opposition parties. Thanks to the quirks of the British electoral system, Labour has not had to increase its share of vote considerably to completely flip the make up of parliament. This highlights the precarious job they now have to govern a country that is experiencing difficult economic challenges that many in the population will expect to be fixed quickly.

“So far the financial market response has been fairly muted with the pound holding on to recent gains overnight. Businesses and investors have foreseen this result for some time and have been comfortable with the messages that have emanated from Labour. It will not want to upset the apple cart, although now it is in power it will be interesting to see how much they deviate.

“Labour has focused on economic growth being at the heart of everything they do. Boosting growth from its currently stagnant levels is going to be difficult to do given the tax and spending challenges facing the new government. Interest rate cuts are also not likely to be delivered at the pace that some in the party will like and as such Labour is inheriting a tough economic environment that has no easy quick fixes.

“And while the City is comfortable with a Labour government, it too will want to see substantial and concrete plans to reinvigorate the London market. Labour governments have not been considered natural allies in the past, but the demise of the London market will require it do give it some sort of stimulus, especially if it wants growth to return to the economy. Getting more businesses choosing to list in London would be a positive start, but a lot needs to be done to also prevent companies currently listed here moving elsewhere or going private.

“This is a fascinating election result and Labour will quickly discover the challenges that face them and the potential this has to hold back its agenda. Given how the votes have played out, it is unlikely the population will give them a long leash and as such clamour for change and improvements will be swift.”

Bruce Cartwright, CEO, ICAS: “We witnessed a significant shift of vote away from the Conservatives but not necessarily to Labour, who’s share of vote only marginally increased, with the lowest ever share of the vote for a winning party. Noticeably, the overall turnout was 59.9 %, down 7.4% on the 2019 election.

“Across the country the political ‘swingometers’ were in overdrive as votes shifted from the Conservatives and the SNP. The Liberal Democrats won 71 seats, their best performance since 1923. But it was the shift of votes from the Conservatives to the Reform Party which surprised everyone with Nigel Farage’s party taking 14.5% of the vote share, and with Farage finally becoming an MP at his eighth attempt.

“This morning, we congratulate the incoming Prime Minister and his colleagues as they assume their seats in the House of Commons. We also congratulate the new Cabinet and other Ministers as they are revealed today and over the coming days, and we look forward to working with them. Our job, as the oldest accountancy professional body in the world, is to work with whichever government is in power, and to act in the public interest, a commitment at the heart of the Royal Charter which established us in 1854.

“This is why just over two weeks before the election, we published our five keys asks of the next government. In this we urged a new UK government to prioritise the long-delayed audit and corporate governance reform and introduce mandatory, corporate sustainability reporting. We’ve seen an unacceptable lack of action from the UK government in bringing forward proposed audit and corporate governance reform which has been at least six years in the making.

“We also called on the new government to invest more in the tax system, broaden access to the accounting profession by strengthening apprenticeship programmes and different routes into the profession, and increasing funding for college and university courses. Lastly, we asked for the new government to collaborate with us to improve regulation, to make sure it’s fair, proportionate and purposeful. You can read more about our key asks in the link at the bottom of this page.

“Our attention now turns to those who will make their way to Downing Street after the much-awaited call from their new boss, Sir Keir Starmer. We’ll write to those new Ministers with a focus on the issues that are important to us, our members and the public interest, as they are announced, and later, to new committee members, when the new structures are formed.

“Before the election, we wrote to 50 high profile candidates, who we thought might win seats, so we’ll keep a close eye on what happens to them over the next few days and weeks. Like everyone else, we’ll work to develop our relationships with new decision makers and their advisers and to introduce ourselves to the many, new members of the House of Commons.

“As always, we’ll pursue an agenda based on the ICAS strategy, the views of our members through feedback from our annual survey, and from the interactions and contributions of members on the many ICAS panels, committees, boards and our council.”

Richard Stone, Chief Executive of the Association of Investment Companies (AIC): “The issue of misleading cost disclosures is well documented, and the case for reform won cross-party support in the last parliament. However, the previous government failed to deal with this problem before the General Election.

“Investors need accurate, clear and useful information to make good decisions, but under current rules they are still being supplied with misleading disclosures that double-count costs. We are calling on the new government to act swiftly to resolve these issues and I will be writing to the new Economic Secretary as soon as they are appointed. I am urging our members and other stakeholders to do the same.

“We are restating our call for investment companies to be taken out of scope of regulated cost disclosure, returning them to the position they were in before 2018. In addition, we need to see an end to the misleading aggregation of costs by investors in our sector and a fundamental reform of disclosures made to retail investors by platforms, advisers and wealth managers.

“This is an opportunity for the Labour government to chalk up an early success. Officials within the Treasury have already done much of the necessary work and resolution will not eat into any parliamentary time, allowing the new government to press forward with what I am sure will be a very full agenda.

“Front and centre of the Labour manifesto was the need for growth and wider wealth creation. Investment companies are perfectly positioned to support those aims, but to do so effectively, there must be an end to regulations that mislead investors and damage the sector.”