EurWORK European Observatory of Working Life

Parties outline contrasting election policies on employment relations

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Elections to the UK parliament will take place on 5 May 2005. We highlight the main political parties’ manifesto commitments in the area of employment relations.

The incumbent Labour government has triggered a general election to be held on 5 May 2005 - more than a year earlier than required by law. Here we highlight what the three main UK-wide political parties’ election manifestos say on employment relations issues.

Labour

Under the heading of 'fairness at work', the Labour Party’s manifesto states: 'We see modern, growing trade unions as an important part of our society and economy. They provide protection and advice for employees, and we welcome the positive role they have played in developing a modern model of social partnership with business representatives. The Labour Party has agreed a set of policies for the workplace (the Warwick agreement) and we will deliver them in full.' The manifesto does not identify particular elements of the Warwick agreement (see UK0409102N for details), except to highlight that the government proposes to extend employees’ statutory entitlement to four weeks’ paid holiday by making it additional to bank holiday entitlement.

The manifesto also commits the government to implementing the recommendations of the Low Pay Commission to raise the minimum wage to GBP 5.05 from October 2005 and GBP 5.35 from October 2006.

On 'family-friendly' employment, the Labour Party is committed to increasing paid maternity leave to nine months from 2007, 'with the goal of achieving a year’s paid leave by the end of the Parliament while simplifying the system for employers'. The government is consulting on how best to give fathers more opportunities to spend time with their children, including the option of sharing paid leave. It is also consulting on extending the right to request flexible working to carers of sick and elderly adults as a priority, and on whether to extend the right to parents of older children. However, the manifesto notes: 'We need to balance the needs of parents and carers with those of employers, especially small businesses.'

In terms of promoting equality at work, the government says that it will 'take further action to narrow the pay and promotion gap between men and women'. On age discrimination, it proposes 'to put the force of the law on the side of older people who wish to continue working. Companies will no longer be able to force people to retire before the age of 65 except where specifically justified. All employees over the age of 65 will have the right to request of their employer that they be allowed to carry on working' (UK0501103N). After five years the government will review 'whether there should be any fixed retirement ages'.

On the issue of business regulation, the party says it 'will only regulate where necessary and will set exacting targets for reducing the costs of administering regulations'. It will 'rationalise business inspections', and 'take further action in Europe to ensure that EU regulations are proportionate and better designed'.

The manifesto highlights the need for a 'national consensus' on the reform of occupational pensions but says little more beyond noting that the second report of the Pensions Commission is due in autumn 2005 (UK0411107F). Labour will seek to increase the proportion of pension fund trustees nominated by scheme members, with a view to making further progress towards the aim of 50% member-nominated trustees.

The party’s proposals in the area of training and skills include:

  • 'a new national programme, working with employers, to ensure that employees who did not reach GCSE standard (level 2) at school will get time off for free training up to level 2'; and
  • 'a strong partnership with trade unions to boost workplace training, including a new TUC Academy and continued support for Union Learning Representatives' (UK0402103F).

Labour says that it is 'determined to raise the status and quality of vocational education'. Beyond the age of 14, 'high-quality vocational programmes will be available to every pupil. Designed in collaboration with employers, specialised diplomas will be established in key areas of the economy, leading to apprenticeships, to further and higher education and to jobs with training' (UK0504107F).

The party believes that 'everyone up to the age of 19 should be learning, so we will expand sixth-form, college and apprenticeship places, and ensure that all 16- to 19-year-olds in employment get access to training'.

Conservatives

The Conservative Party’s manifesto commitments in this area focus on reducing the burdens on business through deregulation and restoring the UK’s former opt-out from the 'social chapter' of the EC treaty.

A Conservative government would 'set regulatory budgets for each department, capping and then cutting the cost of the regulations that they can introduce in any one year'. All new regulation will have to have 'benefits exceeding costs', and regulations will be given 'sunset reviews' to check that this remains the case. There would be no elaboration or 'goldplating' of EU Directives when implementing them in the UK.

The Conservatives 'support the cause of reform in Europe and will cooperate with all those who wish to see the EU evolve in a more flexible, liberal and decentralised direction'. A Conservative government would 'negotiate to restore our opt-out from the European social chapter and liberate small businesses from job destroying employment legislation'. In a reformed Europe, the 'restrictive employment laws' emanating from the social chapter 'will have to give way to more flexible working'.

In a separate document, Action on deregulation, the party makes a wide range of specific deregulation proposals. Where the regulations concerned stem from Europe, these would be 'revisited with [the UK’s] European partners'. In the case of regulations on European Works Councils, fixed-term work, part-time work, sex discrimination and information and consultation, the party proposes to 'revive the UK’s opt-out'. The Conservatives would also 'scrap' the 'statutory dismissal procedure' (UK0408102F).

The manifesto states that the Conservatives will 'retain the minimum wage, together with proposed increases'. It also commits the party to providing 'more flexible maternity pay - giving mothers a choice of whether to receive it over nine months, or a higher amount paid over six months'.

The party says it would 'take a series of steps to strengthen company pensions', including encouraging employers to make pension schemes 'opt-out' rather than 'opt-in'. It proposes to use the unclaimed assets of banks and other financial institutions to replenish the pension funds of people who lose out when a scheme fails.

The Conservatives want to boost the status of vocational education. New grants would be made available to help pupils who wish to combine GCSEs with vocational study at a wide range of colleges, businesses and other enterprises. The party would introduce 300,000 vocational grants of GBP 1,000 each for 14-16 year olds.

Liberal Democrats

The Liberal Democrats’ manifesto also focuses on cutting the 'red tape, bureaucracy and over-regulation that are holding British businesses - especially small businesses - back'. The party says that no new regulation would be passed until a full assessment of its costs and necessity is published. New regulations affecting business would automatically be scrapped unless Parliament specifically approves their renewal after a period specified in a 'sunset clause'. The party also favours moving to one 'all-purpose' business inspectorate, and scrapping the Department of Trade and Industry, abolishing its 'wasteful' functions and transferring its 'useful roles' to more appropriate government departments.

The Liberal Democrats would give working families having their first child increased maternity pay for the first six months at the rate of the minimum wage.

On pensions, the party proposes to 'bolster' the new Pension Protection Fund, operative from April 2005, to provide that workers who worked for companies that went out of business leaving insufficient money in their pension funds before April 2005 are compensated at the same level. The Liberal Democrats would also 'give proper time for consultation before making changes to existing public sector pension schemes, and ... honour the entitlements already built up' (UK0504104N).

In the area of skills, the party would combine GCSE, A-level and vocational programmes of study within a new diploma system, and give all students over the age of 14 the opportunity to combine vocational and academic learning.

Other commitments in the area of employment were identified in a Liberal Democrat policy briefing issued earlier in the year on Rights and responsibilities at work. These included:

  • encouraging corporate social responsibility by means other than legislation and regulation;
  • protecting home and agency workers;
  • promoting consultation in the workplace by '[placing] a duty on all employers to consult, regardless of the number of employees they have. Businesses themselves should be free to develop their own practices and structures', but in larger firms the party would 'encourage works councils'; and
  • providing for 'binding arbitration where the workforce in a vital area of the economy has voted for industrial action'.

Priorities of the social partners

In March 2004 the Confederation of British Industry (CBI) published a 'business agenda' which it believes 'all political parties should subscribe to'. Among the key challenges for the next government that the CBI identifies are:

  • '[ensuring] that vocational education and training meets business needs';
  • developing a 'secure and sustainable pensions regime';
  • achieving the 'meaningful deregulation of business';
  • '[keeping] the labour market flexible'; and
  • making the EU 'work for business'.

On the issue of labour market flexibility, the CBI wants the next UK government to 'refrain from introducing additional employment legislation, giving existing legislation the chance to bed down'. In particular, the next government should 'defend' the 'individual opt-out' from the EU working time Directive, continue to oppose to the draft EU agency work Directive and 'restrain rises in the national minimum wage'. The CBI also says that: 'Any extensions to maternity and paternity rights must be implemented in a business-friendly manner and the administrative burden must be minimised.'

The Chartered Institute of Personnel and Development (CIPD) has circulated its own 'public policy agenda' highlighting 'key issues of concern'. Among other things, the CIPD calls for 'policies that encourage greater take up of flexible working, in order to attract more people back in to work and to take the pressure off the jobs market'. These should include measures to tackle low take-up of paternity leave provisions, including an increase in paternity pay. The CIPD also favours the abolition of mandatory retirement ages 'in order to enable employers to recruit and retain talent free from unnecessary barriers to the employment of older workers, and to begin to tackle the cultural problem of age discrimination in the workplace'. This is 'particularly important given the current difficulties in UK pensions'.

At the time of writing, the Trades Union Congress had not issued any public statement in relation to the UK general election. However, individual trade unions that are affiliated to the Labour Party are campaigning to secure the re-election of the Labour government for a third term. Via the Unions Together organisation, Labour Party-affiliated unions are asking trade union members to volunteer for the campaign. Unions Together states that: 'Trade unions often have disagreements with the Labour government. We quite rightly want more for our members, but sometimes this means not enough credit is given for what the Labour government has achieved.' During April, a dozen union leaders wrote to the Guardian newspaper urging their members to vote Labour in the general election and, in particular, making a number of criticisms of the Liberal Democrats’ policies.

Commentary

As was the case during the 2001 general election (UK0105132F) (but unlike many previous elections, particularly during the 1970s and 1980s), employment relations issues do not have a particularly high profile in the parties’ election manifestos - nor, to date, in their election campaigning more generally.

There are certain common themes in the three main parties’ manifesto commitments in this area. For example, each of the parties has highlighted the issues of improving maternity/parental leave, reforming occupational pensions, boosting vocational education and training and, to varying degrees, reducing business regulation.

There are, however, distinct differences in the political parties’ approaches to employment relations, and the outcome of the forthcoming general election is likely to have important implications, especially in terms of workers’ rights. Most notably, the Conservative Party’s deregulation proposals imply the repeal of a range of important statutory rights for workers (though in a number of cases this would depend on the success of a Conservative government’s attempt to extricate the UK from the 'social chapter' of the EC treaty).

The most extensive set of employment relations commitments are those of the Labour Party, which opinion polls suggest is likely to win the election and retain office. In the main, these represent a continuation of existing government initiatives and there are no major surprises. The party has committed itself to delivering 'in full' the package of employment law reforms and other policy commitments agreed with union leaders in July 2004 - known as the 'Warwick agreement'. The package was widely seen as being designed to shore up trade union support in advance of the election following sustained union criticism of the Blair government’s record. However, at the same time, party leaders have been anxious to avoid alienating business opinion - a key constituency for 'new Labour'. This is reflected in, among other things, the party’s recognition that its proposals for extending the right to flexible working to wider groups of parents and carers would need to strike a balance which takes account of business needs, and its commitments to simplifying employers’ maternity leave obligations and reducing the administrative costs of business regulation more generally. (Mark Hall, IRRU)

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