Looking ahead to the General Election

Posted by Max Craft, 10th May 2017
 Until Theresa May’s surprise announcement, May 2020 was the date diarised for the next General Election. Instead, almost three years early, 8 June 2017 is the date the country will vote for its new government.

Although, at the time of writing, none of the parties’ manifestos have been published many announcements have already been made about key policies. Whilst it is inevitable that Brexit is dominating the headlines all the parties are keen to publicise other initiatives. What can we expect in the context of employment issues?

The Labour party have made numerous announcements and these include:

  • Increasing the national minimum wage to £10 an hour by 2020 and this will mean abolishing the national living wage which is only available for those aged 25 or over.
  • Introducing four additional bank holidays on 1 and 17 March, 23 April and 30 November, the dates of the UK patron saints.
  • Banning zero hours’ contracts.
  • Ending unpaid internships.
  • Doubling the period of statutory paternity leave from two weeks to four weeks and increasing paternity pay.
  • Guaranteeing the same rights for temporary and part-time workers as for full-time workers.
  • Introducing a maximum 20:1 pay ratio between the highest and lowest earners in the public sector and in companies bidding for public sector contracts.
  • Implementing a pay rise for NHS staff and removing tuition fees for student nurses and midwives.
  • Protecting the rights of EU citizens living in the UK.
  • Repealing the Trade Union Act 2016. The ballot thresholds for industrial action and the additional threshold for strikes in important public services are some of the most controversial elements of the Act. The Welsh Government has already commenced measures to reverse certain provisions of the Act insofar as they relate to devolved public services in Wales.

The Conservative party’s announcements include:

  • Refusing to rule out income tax and national insurance contribution increases which is interesting bearing in mind the U-turn following the Spring Budget about the increase in national insurance contributions for the self-employed. This reluctance to rule out an increase may be related to the taxation concerns arising out of the gig economy.
  • Replacing the “triple lock” which guarantees a minimum increase in the state pension each year by a minimum of either 2.5%, the rate of inflation or average earnings growth, whichever is largest, (the Labour party will keep the “triple lock”).
  • Protecting workers’ pensions from “irresponsible behaviour” by company bosses. The Pensions Regulator would be given the power to scrutinise takeovers and investigate dividend payments that threaten the solvency of a company pension scheme.
  • Introducing a provision whereby firms could be forced to pay more for short notice work from people on zero hour contracts. This proposal would see firms told to pay an increased rate above the minimum wage if they called upon workers whose contract requires them to be on standby for work.
  • Confirming that the Great Repeal Bill will go ahead and preserving and strengthening the rights of workers and securing the rights of EU citizens living in the UK.
  • Continuing to try to reduce net migration to the “tens of thousands”.
  • Improving mental health in the workplace and schools. Under the Equality Act 2010, individuals who have conditions such as depression, anxiety and bipolar disorder are only protected from disability discrimination if their condition is continuous for 12 months. The Act would be amended to take account of the fact that the conditions are often intermittent. Large companies would also be required to train mental health first responders alongside traditional first aiders.

Regarding the Liberal Democrats, it is reported that they are poised to unveil plans to stop employers forcing staff to identify as self-employed with policies aimed at regulating the “gig economy”. Also, the former Liberal Democrat minister who designed the “triple lock” has suggested that it is maintained but modified.

All the details will be confirmed when the parties’ manifestos are published over the next week or so.

In the meantime, what has happened to legislation which was making its way through the parliamentary process when the General Election was announced? Parliament was dissolved on 3 May 2017 and this means no further legislation can be passed until we have the new government. Any Bills which were not passed by that date have lapsed. The new government will be able to pursue its own legislative agenda and those Bills that have lapsed can be presented again in the same form or amended.

One Bill going through the parliamentary process was the Finance Bill 2016/17. A key provision related to the taxation of termination payments to employees (which was expected to come into force in April 2018). Employers would have been subject to tax an amount equivalent to the employee’s basic pay if notice was not worked as well as making all termination payments subject to class 1A national insurance contributions above a £30,000 threshold. However this provision was dropped completely so that the Bill could be fast-tracked through Parliament. The provisions regarding termination payments may well re-appear after the Election if the Conservatives are re-elected.

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