As the general election gets under way, a jokey quiz question is circulating around Westminster. Which political party pledges to be tough on immigration and asylum, wants to boost pensions, and is keen to provide more childcare and improve the work-life balance? Answer: all three of them.
There has never been a campaign where the parties’ emphasis has seemed so similar – at least from the employers’ point of view. There is also little to distinguish them on the subject of the economy, bar the Tory ambition to cut taxes and the Liberal Democrats promising to raise them for top earners.
Political cross-dressing is the name of the game as all seek to hit the centre ground seeking those crucial votes of ‘middle Britain’. It is confusing at the best of times, but particularly this time for the business voter.
Within the next two weeks, the parties will be producing their election manifestos in the hope of making things a bit clearer.
The Tories had a good start to the ‘pre-election’ campaign, producing some good guerrilla raids that put Labour on the back foot: immigration quotas, council tax cuts for pensioners, a clampdown on travellers’ sites, and the ‘battle of the broken shoulder’. However, the Howard Flight sacking affair has left the party’s campaign reeling and Labour looking smug.
Families and children
So what are we to make of all these election promises? Where are the ideological fault lines, and are these manifesto nuggets simply election bribes dreamt up for polling day, or will the parties deliver?
The area that is of most immediate interest to employers is probably childcare and work-life balance. The issue of parental leave is one that the parties have decided is a vote winner among parents – and with the businesses who will benefit from the flexibility in working hours.
Labour’s focus on ‘hard-working families’ has led it to promise that fathers and mothers can share in increased parental leave of nine months by April 2007, with a ‘firm target’ of extending this to 12 months from the summer of 2009.
The latter sounds very much like a sweetener, but we may find that economic conditions have changed in four years’ time, precluding such a big extension in paternity rights.
To the delight of ministers, Tory leader Michael Howard has refused to match Labour’s pledge to the full. Last week, Howard said he would offer mothers the choice of maternity leave extended from six to nine months, or increased payments for taking just six months. The more cautious Tory approach may be of interest to employers, who have voiced anxiety at the extension of the current fortnight’s leave for fathers to a possible year.
Minimum wage
One possible election clash is the minimum wage. Business has started to grumble about rises of 35% in five years, and Labour plans to increase the figure to 5.35 in 2006. Howard has pledged to keep it, although the current trade and industry secretary, Patricia Hewitt, claims that it would “wither away” if the Tories get in.
I suspect it is true that Howard would be less reluctant to accept the sharp rises recommended annually by the Low Pay Commission.
The Liberal Democrats also support the minimum wage.
Another area that many commentators see as a token gesture is equality in the workplace. Labour introduced an Equality Bill and promised a single equality and human rights commission that would police all forms of discrimination, including (for the first time) sexual orientation. But the Bill will not make it to the statute book by the close of this parliament, and the government annoyed gay rights campaigners by leaving them out of anti-discrimination rules in the supply of goods and services. They now await the findings of Trevor Phillips’ year-long discrimination inquiry.
However, this may have come as something of a relief to business, particularly the leisure and retail sector, which may have found the extra rules a burden. It is not something the Tories are likely to push hard either, with their promise to either amend or repeal the Human Rights Act.
The Liberals agree with much of the emphasis on the above areas, but one issue where they believe they have a distinctive policy is pensions. They claim that they dreamt up the idea of a ‘Citizen’s Pension’, which Labour is threatening to steal. Alan Johnson, the pensions minister, has admitted he is attracted to the idea. The basic concept is to guarantee a pension of more than 100 a week, which would be paid to everyone who can prove British residency. It would also end the current reliance on means testing, which advocates argue has increased under chancellor Gordon Brown’s tenure at the Treasury.
The Tories have promised to increase the basic pension in line with earnings and keep Labour’s pension credit and some other benefits open to older voters, such as winter fuel payments and free prescriptions and TV licences.
The New Deal (technically New Deals) is a good example of the three parties’ differences on employment matters. Labour pioneered the scheme to get the unemployed back into work, which it funded through a windfall tax in 1997, but the Tories want to scrap it. Expect the chancellor to make great play of this in the campaign: he regards his pledge for full employment as a “moral issue” that divides Labour and the Tories. The Liberals – in typical third-way fashion – would keep the New Deal, but would make it more of a bespoke service for jobseekers.
Immigration
According to the opinion polls, immigration is the number one issue on voters’ minds, so it is not surprising that all three parties have given it a prominence it never had before. The Tories led the way early on by promising to introduce a quota system and special border police. This has led to some anxiety in Labour ranks, with the party’s election co-ordinator, Alan Milburn demanding a ‘sharpening up’ of government policy after seeing private polls that showed it was the one issue on which the Conservatives were ahead. The response? To introduce an Australian-style points system for economic migrants, to filter out those who are deemed of most use to the economy.
These, then, are where the battle lines of the election have been drawn. In a nutshell, Labour has had eight years to develop a strategy targeted at what it calls ‘hard-working families’. Howard, in his short tenure as Tory leader, has had to adopt a more piecemeal approach, but has shrewdly matched or at least part-matched some of Labour’s ‘bestsellers’, and thrown in what he hopes will be a few winners of his own.
Of course, the entire Tory edifice relies on the credibility of its promise to make 35bn of savings from Whitehall waste and not to make irresponsible tax cuts – something that was shaken by Howard Flight. Labour, which claims these savings are really ‘cuts’ that will hit frontline services, still leads by several points in the polls, and the party’s private research suggests that it is ahead on most key issues.
As Peter Robinson, senior economist at the IPPR think-tank, sums up: “The government now has a very ambitious target to boost the overall employment rate so that 80% of all adults are in work, compared with about 73% now. It links this directly with the pensions issue: if more of us are in work and stay in work for longer, this is the best way to make sure that we can continue to afford decent pensions.
“The other two parties clearly agree with this logic, but the question is: which of them has the most credible ideas for both improving employment and delivering a sustainable pensions settlement?”
The voters will decide.
Some of the key employment policies
Labour
– Parents can share parental leave of nine months by April 2007. Firm target to extend this to 12 months by 2009. Maternity pay to rise by 1,400
– Increase minimum wage to £5.05 in October, rising to £5.35 next year
– Points system for economic migrants to filter out those who are deemed of most use to the economy. Employers to be fined £2,000 for using illegal workers
– Cut £21.5bn from Whitehall spend by slashing 84,150 jobs.
Conservative
– Increase maternity pay by £1,400, allowing parents to concentrate payments over a six-month period
– Scrap the New Deal for Young People – the initiative aimed at getting the long-term unemployed back to work – using independent contractors instead. Expand the New Deal for Disabled People
– Cut £35bn from Whitehall spend by removing waste. More than 4,000 jobs to go at DTI
– Introduce a quota system on immigration. Employers forced to give financial bonds for foreign staff on temporary work permits.
Liberal Democrats
– Women offered £170 a week maternity pay for six months
– Scrap the DTI and cut more than 100,000 civil service jobs
– Keep the New Deal, but make it more of a bespoke service for jobseekers
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– Replace the work permit system for immigrants with one based on green cards, and a set number of economic migrants.
David Cracknell writes for Personnel Today on political issues.
