Coalition document: Key implications for employers

The government has published its full coalition document, outlining the policies as agreed between the Conservatives and the Liberal Democrats.

In a joint foreword, David Cameron and Nick Clegg claim that the combination of the two parties’ best ideas and attitudes has produced a programme for government that is “more radical and comprehensive” than their individual manifestos.

Here are the key implications for employers:

Jobs and pensions

  • The government says it will scrap all existing welfare-to-work programmes and create a single welfare-to-work programme to help all unemployed people get back into work.

  • It vows to ensure that Jobseekers’ Allowance claimants facing the most significant barriers to work are referred to the new welfare-to-work programme immediately.

  • The document outlines “support” for the national minimum wage, although there is no stated commitment to raising it.

  • The government will commit to establishing an independent commission to review the long-term affordability of public sector pensions, while protecting accrued rights.

Retirement age

  • The government will “phase out” the default retirement age of 65 and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.


  • The two parties have agreed to the Conservative commitment to introduce an annual limit on the number of non-EU economic migrants admitted into the UK to live and work – despite the Liberal Democrats’ strong opposition to the move. They will jointly consider the mechanism for implementing the limit.


This section has perhaps the clearest Liberal Democrat imprint, with the government vowing to promote equal pay and take a range of measures to end discrimination in the workplace, including:

  • Extending the right to request flexible working to all employees, consulting with business on how best to do so

  • Undertaking a fair pay review in the public sector to implement the proposed ’20 times’ pay multiple – ensuring that no public sector worker can earn over 20 times more than the lowest-paid person in their organisation

  • Promoting gender equality on the boards of listed companies.


  • The document outlines the commitment to cutting red tape by introducing a ‘one-in, one-out’ rule whereby no new regulation is brought in without other regulation being cut by a greater amount.

  • The government promises to review employment and workplace laws for employers and employees, to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive.

  • It also vows to reinstate an Operating and Financial Review to ensure that directors’ social and environmental duties have to be covered in company reporting, and investigate further ways of improving corporate accountability and transparency.

  • The coalition will seek to ensure an injection of private capital into Royal Mail, including opportunities for employee ownership, while retaining the Post Office in public ownership.

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