Credit: Rupert Rivett

Labour manifesto promises biggest shake-up of the workplace in a generation

Labour's manifesto proposes sweeping workplace reforms to improve job quality, but the Resolution Foundation warns of risks and a cautious financial approach.
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Labour’s manifesto outlines significant changes to employment rights and labour market enforcement, aimed at improving job quality. However, these reforms must be implemented cautiously, according to the Resolution Foundation. While bold in workplace changes, Labour’s approach to public finances remains cautious, potentially leading to tax increases and public service cuts in the next parliament.

Labour’s proposals include new employment rights, tougher labour market enforcement, and setting sector-wide standards in social care. With care staff among the lowest-paid workers in Britain, there are strong reasons for a new Fair Pay Agreement in social care. If care workers are paid at least the real Living Wage, over two-in-five would benefit directly. However, implementing new labour market institutions is complex and requires careful planning.

Additional reforms include the right to a contract reflecting regular hours worked and ‘day one’ rights to improve job security. These measures aim to tackle zero-hours contracts while maintaining flexibility in sectors like hospitality.

Contrasting with their bold labour market reforms, Labour’s cautious approach to tax and spend could lead to further tax rises and spending cuts. Labour plans to raise taxes by £8.5bn annually over the next parliament, in addition to the £23.5bn post-election tax rises announced by Jeremy Hunt. This would result in the UK’s tax-to-GDP ratio rising to its highest on record.

Labour’s modest spending increases focus on protected departments such as education and health and social care, leaving around £18bn of cuts needed for unprotected departments like transport, justice, and the home office. Additionally, Labour’s child poverty strategy is praised, but the absence of plans to abolish the two-child limit on welfare support is noted.

The manifesto also pledges nearly £5bn a year in public investment by 2028-29, primarily through its Green Prosperity Plan. While this investment is welcome, it only partially offsets announced investment cuts.

Mike Brewer, interim chief executive at the Resolution Foundation, said: “Labour’s manifesto proposes the biggest shake-up of the workplace in a generation. The aim of boosting the quality of work across Britain is laudable, as is a better deal for under-paid and under-valued care workers. But the sheer scale of these reforms carries risks that demand careful implementation. While Labour may want to start consulting over these reforms in their first 100 days in office, they’ll need to take their time to get their details and delivery right.”

Ryan Fowler

Ryan Fowler is Publisher of Workplace Journal

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