Tania Bowers, Global Public Policy Director at APSCo discuss what recruiters should consider about Labour’s plans.
As the dust begins to settle on the Labour Party’s landslide win, attentions are now turning to the detail in how Starmer’s administration will implement the many promises made during its election campaign. There’s no doubt that the new Cabinet has already begun to move fast on making changes and setting policy reviews in motion. Indeed, the King’s Speech earlier this month really demonstrated that the new Government isn’t hanging around.
While we expect further developments each week, here are some of the key points that recruiters need to keep note of from Labour’s actions so far.
Employment Rights Bill
Perhaps the biggest news that staffing firms are keen to monitor are plans to roll out the Employment Rights Bill within the first 100 days of office to implement the party’s ‘Make Work Pay Plan’. This formed the crux of Sir Keir Stamer’s plans in the initial Labour party manifesto so it comes as no surprise, but it does have the potential to significantly shake up employment rights.
Some details have already emerged on the topic. We know that zero-hour contracts will be banned and fire/rehire practices ended. Day one rights for workers are also planned, providing access to parental leave, sick pay and protection from unfair dismissal from the first day of employment.
There will be a consultation on the Bill which APSCo will be involved in. As we have long highlighted, the nuances of the labour market must be recognised in any changes in order to create a fair and prosperous employment landscape for everyone. That requires an understanding that the protections afforded for those most at risk of exploitation aren’t necessarily relevant for the highly skilled contract workforce, and the self-employed. A ‘catch-all’ approach to employment legislation could have a detrimental impact on those in the highly-skilled flexible workforce who are critical to many of Labour’s economic growth plans.
It’s unclear at the moment how much the Bill will impact the temporary worker and contractor markets. However, in the longer term there are plans to review employment status, defining genuine self-employment, alongside reassessing worker status. This will be an opportunity for the professional independent contracting market to be differentiated. Something that we see in our other markets such as Germany, with a recent focus on self-employed adult education teachers. There is a view that the approach by the courts and pension authorities to defining self-employment has become too restrictive.
Skills England
The new Prime Minister based much of his campaign on the need to boost the UK’s skills and has already launched Skills England – a new body that will be tasked with the immense problem of addressing the dearth of highly trained professionals. That will include reforming the Apprenticeship Levy to create a Skills and Growth Levy which will be more flexible. However, as APSCo has previously recommended, the scope of these changes need to be extended to agency workers and the self-employed to support the upskilling of this crucial part of the labour market.
It’s promising to note that the Government is planning to implement real change to address the skills shortages that the country has been suffering from for years. But given the sheer scale of this issue, it is unlikely that we will see significant progress in the short term. That means that the highly skilled flexible workforce – both in the UK and internationally – will still play a critical role in keeping Britain working.
If we look at the statistics, for example, we can see in core STEM-based remits, that a decline in job applicants has been developing for some time. For example, our recent report on the pharmaceuticals sector (developed in conjunction with Veritone) revealed that the number of people applying for permanent jobs in pharma fell 37% year-on-year in June. In education a similar decline has been reported. The number of professionals applying for permanent education jobs has fallen throughout most of 2024 with June’s statistics showing a 29% year-on-year decline. Contract applications saw a similar fall, down 25% year-on-year in education last month. This puts the Labour Government’s plans to recruit more teachers at risk.
It won’t be easy to reverse this given the level of training and education that is needed in many of these sectors. We have already had promising conversations with Labour representatives on this issue and will be involved in the discussions going forward to ensure that appropriate and added-value actions are implemented.
Business regulation
Aside from the actions that will have a direct impact on the labour market, there are other plans on the cards that will impact recruitment businesses. The full details are yet to emerge, but initial plans for business regulation and policy reform could also drive positive growth for staffing firms.
The potential to reform business rates to level the playing field for all and take action on late payments to ensure SMEs and the self-employed are paid on time will all be a boost to smaller businesses. APSCo has historically called for the review of long payment terms and an upper limit of 60-day payments so it is a promising win in our view that this has been acknowledge by the Government. The devil will, of course, be in the detail, but we will continue to work closely with policy makers to address the issue of long and late payments in the supply chain.
A promising future?
We expect more information will come in the October Budget announcement, but for now, it looks like stability may be on the cards for the UK economy. As the King said in his speech, “Securing economic growth will be a fundamental mission” for the Government. There may be changes for recruiters to navigate in the months ahead, but recruitment thrives on a strong and growing economy. Should the aims of the first 100 days be delivered against, staffing firms could be set for a far more positive end to the year.
