What will the General Election mean for pay and employment?

With 4 July fast approaching, what manifesto commitments have the two main parties made in respect of pay and employment?

The minimum wage features in both parties’ manifestos. The National Living Wage, the ‘adult’ statutory minimum rate for workers aged 21 and over, reached two-thirds of median earnings in April 2024 and the Conservatives intend to maintain it at this level in each year of the next Parliament. According to their manifesto, on current forecasts this would see it rise to around £13 an hour (an increase of around 14%) over the five-year term. Meanwhile Labour aims to ensure the minimum wage is a ‘genuine living wage’ and as such would change the Low Pay Commission’s remit so that its recommendations on the level of the statutory minimum account for the cost of living. It would also remove age bands from the minimum wage.

Also on pay, the Labour Party intends to establish a fair pay agreement in adult social care as part of a broader programme of reform in the sector to create a National Care Service. It also proposes to reinstate the School Support Staff Negotiating Body, to help address recruitment and retention difficulties in these roles. Meanwhile the Conservative manifesto details plans for tax-free bonuses totalling up to £30,000 over five years for new teachers in priority areas and key STEM (science, technology, engineering and maths) and technical subjects.

On skills, the Conservatives propose to create 100,000 new apprenticeships every year in England by the end of the next Parliament while their proposed Lifelong Learning Entitlement would, according to a policy paper published in May, enable eligible learners to access a tuition fees loan of up to £37,000 for full courses at level 4 to 6 (such as degrees, technical qualifications and designated distance-learning and online courses) and modules of high-value technical courses at level 4 to 5, as well as a maintenance loan to cover living costs for courses with in-person attendance. They would also expand existing adult skills programmes such as ‘Skills Bootcamps’ to address shortages. Labour says it intends to implement workforce training plans in sectors such as construction and health and social care in an effort to end reliance on overseas workers in these areas.

Both the Conservative and Labour parties want to tackle the growing number of economically inactive people by reforming support for health conditions – especially around mental health and, for the Conservatives, ‘more moderate’ mobility issues – to help them back into the workplace. Under the Conservatives, this would be accompanied by welfare reform and changes to the fit note process, with a view to reducing the number of employees being signed off as ‘not fit for work’.

Labour’s manifesto also commits to implementing its New Deal for Working People in full, introducing legislation in its first 100 days in office if elected. As well as the plans for the minimum wage outlined above, these proposals include:

·        banning zero-hours contracts

·        ending ‘fire and rehire’ practices

·        day-one rights to parental leave, sick pay and protection from unfair dismissal as well as flexible working wherever feasible

·        strengthening the collective voice of workers

·        creating a single enforcement body to ensure employment rights are upheld. 

The Conservatives say little on the topic of reforms to employment law or rights. However, the party’s manifesto makes a broad commitment that the party will ‘continue to stand behind our carers’ and points to the current government’s recent introduction of carer’s leave as evidence of its commitment in this area.