The run up to a General Election usually produces a swathe of pledges from the political parties, but as businesses are not allowed to vote, competing manifestos are often pretty light on measures that could directly affect employers. But in 2017 it is different.
This article highlights just a few of the many 2017 policies pledges that affect employers. Whatever your view of the likely outcome of the General Election, it is important to remember that political parties frequently ‘borrow’ from other parties’ policies and it is also clear that there are some general trends emerging.
Tax and NIC
The Conservatives have restated their commitment to increase the personal allowance to £12,500 and the higher rate threshold to £50,000 by 2020: UKIP plan to increase these further to £13,500 and £55,000 respectively by 2021/22. A Labour government would lower the threshold for the 45% additional rate to £80,000 (over 5 years) and reintroduce the 50p rate on earnings above £123,000. The Lib Dems would increase the basic rate by 1%.
Expanding on existing measures for apprentices, the Conservatives are proposing to create a one year holiday on employer’s NIC for firms hiring ex-service personnel, disabled people, ex-criminals, people leaving care homes, and those unemployed for over a year. However, unlike the Labour party, the Conservatives have not pledged to freeze NIC rates. The Green party would phase out the upper earnings limit on employees’ NIC.
With increasing public focus on the gig economy (see The gig economy review) there are plenty of policies covering it. The current Government launched the Taylor review, and pending it’s outcome, the Conservative manifesto simply says that it will ensure people working in the 'gig' economy are “properly protected”.
The Lib Dems intend to create a formal right for everyone on zero-hours contracts to request permanent hours and would consult on introducing a right to make regular patterns of work contractual after a period of time. UKIP would significantly tighten up rules on zero hours contracts and severely limit their use, whereas Labour and the Greens would ban them outright.
It seems clear that the national living wage will be going up. The Conservatives pledge to increase it to 60% of median earnings by 2020 (estimated at £9.35 per hour by the Office for Budget Responsibility). The Lib Dems are committed to paying a new 'genuine' living wage to all public sector staff and encouraging private sector employers to adopt it. The Labour party would increase it to at least £10 an hour by 2020 for all workers aged over 18, as would the Green party. Labour and the Lib Dems would also end the 1% cap on public sector pay rises.
The Conservatives and the Lib Dems would require listed companies to publish the ratio of executive pay to broader UK workforce pay and legislate to make executive pay packages subject to strict annual votes by shareholders. The Labour party would go further and impose an ‘excessive pay levy’ on employers where any employee is paid more than £330,000 a year.
A Labour government would introduce bank holidays for the patron saints of England, Scotland, Wales and Northern Ireland; there would be new bank holidays in England and Wales under a UKIP government. A Green government would phase in a four day working week to boost employment.
Labour would increase paid paternity leave to four weeks and the Lib Dems would increase it to six weeks.
While all parties are in favour of retaining current employment protection under EU law after Brexit and protecting the rights of EU nationals already living in the UK, there are a number of other policy differences.
The Conservative party plans to double the Immigration Skills Charge levied on all companies employing migrant workers to £2,000 a year by the end of the new Parliament. It is also committed to reducing net immigration to below 100,000 a year.
The Labour party would implement fair immigration rules to replace freedom of movement and crack down on overseas-only recruitment practices. Amongst the many policies UKIP has on Brexit, it would create a legal requirement to advertise jobs in the UK first and allow employers to discriminate in favour of UK applicants aged under 25.
Employer Essentials Index