June 12, 2017
Any residual feelings of certainty that anybody in the UK may have had about the country’s future following last year’s Brexit vote, will have had them pretty much eradicated by last Thursday’s General Election result. However, we must try to make sense of things for society and the wider economy as well as specific facets of it, such as the world of work. The whole thing looks like the pig’s ear that it is, of course. Fortunately, as some experts have already argued, there are some reasons to see some positive outcomes, including a soft (or softer) Brexit and the chance of a more positive approach to workplace rights, now that the Government needs to maintain a broader consensus. The fear or hope that the UK would lighten its already soft touch approach to workplace legislation would seem at least to be less well founded.
Martin Beck Lead UK Economist, Oxford Economics
On the downside, the UK faces a further period of political uncertainty, which could potentially involve a change of Conservative leader and another general election before the year is out. That uncertainty may drag on economic activity (indeed, the weakening in services growth indicated by May’s CIPS services survey was partly attributed to firms delaying decisions until after the election). But if the experience following the EU referendum is anything to go by, uncertainty is not the activity-killer many previously believed it to be, implying any drag from this source should be modest.
And there are reasons to believe that the election result could offer some positives for the economic outlook. Public dissatisfaction with the direction of economic policy suggested by the Labour Party’s gains may compel a Conservative-led government to adopt a more growth friendly fiscal policy, building on the very modest steps taken in that direction after the EU vote. With ‘fixing the public finances’ no longer selling even on a political level, the consensus around economic policy could see a meaningful shift towards using fiscal policy to promote growth, a shift that, with monetary policy now out of conventional ammunition, has arguably been long overdue.
A softer Brexit than had previously been anticipated is another potential economic positive compared to where we were 24 hours ago, at least for the medium-term outlook. Granted, in some respects, the Conservative’s lack of a majority strengthens the more hard-line Eurosceptics in the Party. But a significant number of Conservative MPs voted ‘Remain’. In light of Thursday’s vote, this group may now be more vocal in resisting a sharp break with the EU. And as things stand, for the Conservatives to push any Brexit deal through Parliament will require support from other political parties, almost all of whom have advocated maintaining closer ties with the EU than the Tories.
Peter Cheese, chief executive of the CIPD
This election was called to provide the next government with a strong mandate to take us through Brexit but this morning we face yet more uncertainty. In order for the economy to remain resilient it’s vital that we have a working government that brings the UK the stability it needs at this crucial time.
Brexit negotiations are high on the agenda and how these now move forwards will be a critical area of discussion. However, there is of course a much wider agenda that we need the new government to deliver on as was clear through the public debates. A key focus must be on addressing workplace issues through a much more human lens. By focusing on improving transparency in business, protecting and raising awareness of rights for workers and boosting investment in skills, we can hope to ensure that work can be a force for good, regardless of how, when and where people work. We look forward to working with the new government once it has been officially formed, to address these issues and ensure the UK is in a strong position to be a high-skills, high-value economy.
Lucy Gordon, solicitor at esphr
If there’s anything recent election outcomes have taught us, it’s that anything can happen. The country has woken up to a hung parliament, which spells even more uncertainty for businesses as we enter into Brexit negotiations. So, whilst the parties jostle to try to form a government, what could we expect for employment law?
Both parties are promising to guarantee existing workers’ rights throughout the Brexit process and offer enhancements, but the Tories’ are limited. If they are able to form a coalition, they propose to better protect gig economy workers, increase employee representation on company boards and simplify the tax system for the self-employed, while Labour, if able to run a minority government, would try to effect more radical proposals that all workers would have equivalent rights to employees from day one. Additionally, they would seek to ban zero-hours contracts and unpaid internships, remove the cap on public sector pay increases, crack down on NMW evasion and abolish Employment tribunal fees.
Along with enhanced workers’ rights, the parties have postulated that they will tackle workplace inequality. While both have proposed to improve gender pay gap reporting, the Tories are also calling for ethnic minority pay gap reporting to become mandatory. Better deals for families are being promised by both, with Labour proposing significant increases in free and subsidised childcare on the one hand, and the Tories encouraging employers to consider more flexible working options on the other. Both are claiming these policy enhancements will get more women into senior, higher paid jobs.
The Tories have additionally planned NICs incentives for companies taking on long-term unemployed workers and those with medical conditions or previous convictions, and have made tackling our current skills shortage a priority. They plan to do so by reforming tertiary education and increasing the number of apprenticeships, while Labour have chosen instead to focus on strengthening Trade Unions to bestow more power upon workers.
In the meantime, uncertainty prevails, and we’re playing a waiting game once more. If the Conservatives do succeed in forming a government, we’ll be interested to see how they put their plans around immigration and addressing skills shortages into action – and whether May manages to hang onto her leadership.
Alan Price, Employment Law and HR Director of Peninsula
The election was called by Theresa May to provide her with a greater Conservative majority to ensure her mandate for negotiating Brexit was robust. The democratic voters, however, appear to have rallied against this and the election will result in a hung Parliament where the Conservatives are the biggest party with no overall majority. Peninsula has received hundreds of calls this morning from worried business owners asking what does this mean for their business in regards to their employees.
One of the most concerning aspects of the election for employers is likely to be what this means for the UK leaving the EU. Some experts are saying that it is now likely a “softer” Brexit will be carried out as the Conservatives campaigned on the basis of a “hard Brexit” and the public did not provide them with the support to carry this out. With some key Conservatives against leaving the single market, and the EU ready to negotiate, there are suggestions that Brexit will be delayed or postponed.
Other important points of the election campaign are likely to be continued by the Conservatives as there is general support for change in these areas. Ensuring rights for workers in the ‘gig economy’ is an important focus for any future government and the Conservative-commissioned Taylor report in to modern employment practices will report on these areas. Although the Conservative manifesto was silent on zero-hours contracts, in contrast to the other parties, Taylor has indicated that he will recommend a right to request zero hours contracts.
The Conservatives also campaigned on the basis of increasing workplace family rights through creating a statutory right to time off for carers and child bereavement leave; increasing the National Living Wage to 60% of median income by 2020 and amending disability laws to ensure short-term mental health conditions are protected. For now, businesses and employers are likely to find themselves in a further period of uncertainty until the future government and employment law initiatives are confirmed.
Sarah Weir, Chief Executive, Design Council
When much of our lives can seem clouded by uncertainty, design can provide a mechanism for us to look forward and positively respond to change. More than ever, our economy and our politics will rely on creative thinking and innovation. Design Council believe good design is at the centre of solutions. It can drive economic growth, improve our shared built environments and tackle social challenges. It can also bring people together. This will not stop after an election result, and over the coming days, Design Council will continue to look to the future.
First and foremost, we must aim to keep design talent in the country. Britain has some of the best designers in the world – it is vital that we remain the best place in the world for them to be. These minds will discover – design – how we can raise living standards; pay for social care; rejuvenate our health service; build homes and create places that enable all of us to prosper and live healthier, fulfilling lives.
We call on a new government to position design at the centre of its plans for a healthier, more prosperous Britain and to use it to respond positively to change.
Brian Berry, Chief Executive, Federation of Master Builders
Theresa May stood on a hard Brexit platform and she has clearly not been given a mandate to approach the negotiations in this way. Brexit is inevitable but the election result will surely have a significant impact on the shape of the Brexit deal we end up with. This could be a positive for business leaders who are concerned about a broad range of issues – for the construction sector, our greatest concern is that the flow of migrant workers might be reduced too quickly and before we are able to put in place a framework for training sufficient UK workers to replace them.
Julia Evans, Chief Executive, BSRIA
The drive towards collaboration demanded by the outcome of the election must mean a more inclusive approach to the big construction related issues of the day. This must be seen as an opportunity to test policy assumptions and reinvigorate the drive towards positive outcomes for the environment and for the carbon economy.
Regarding energy and the environment – the political parties pledged that they will establish energy efficiency schemes to help business and households cut their energy use and bills. And smart meters have featured.
Any steps that ensure both businesses and households’ energy bills remain low is encouraging – coupled with the use of emerging smart meters and relevant technologies as and where applicable.
On immigration – the political parties have outlined issues around migration and immigration and tariffs on firms hiring non-EU migrants and international students being excluded from immigration numbers.
The construction industry needs access to a skilled global workforce – especially from the EU. Specifically regarding labour: how will industry access much-needed tradesmen? With the current housing shortage crisis – we need a workforce with the right skills to build these, therefore a fluid skilled labour market is key. In addition to this – international students should have the freedom to study and work in the UK.
There has been much chaos and mixed-messages surrounding Brexit since June last year so government must ensure that much-needed clarity and order is delivered in the ongoing Brexit debate – which provides investor confidence. Indeed, as we move forward, we must not lose sight of the fact that it is crucial that the construction industry’s voice is heard in the Brexit deliberations. What is evident is that the ‘construction industry is open for business’. The country voted last June to leave the EU. Moving forward: industry needs clarity and stability not further votes and political filibustering.