This week, against the backdrop of the economic fallout following the Government’s ‘mini-budget’, Labour launched a wave of new policy proposals. But beyond flagship policies on energy and transport, are a series of ideas that could have significant impacts for workers and employers. The party has set out ambitions to extend rights and protections to workers, invest in health, social care and childcare and reform social security.

With the next General election likely to be two years away, this is one of the first opportunities to see what policies a Labour Government would implement to ‘make work pay’ and what their vision is for the future of social security system in the UK.

This blog looks at ideas on work and social security announced through the Labour Party’s Stronger Together report and Industrial Strategy (both launched this week) as well as points that have been reaffirmed from their New Deal for Working People.

A plan to strengthen day one employment rights

Labour plans to make a series of key entitlements available to all workers from their first day of employment, such as access to sick pay for everyone including the self-employed, right to request flexible work and protection from dismissal.

Many individuals on insecure and low paid jobs are not currently eligible for sick pay. Statutory Sick Pay (SSP) is only available to individuals who are classed as an employee and meet a threshold of certain working hours or earnings. Our Insecure Work Index estimates that in 2020, approximately 1.4 million (26%) severely insecure workers were not eligible for SSP. SSP in the UK is one of the lowest rates in the OECD and these reforms are long overdue.

Last year, Angela Rayner, Labour’s Deputy Leader and Shadow Secretary of State for Future of Work, announced that Labour will make flexible working a day one right for everyone. Currently, only workers who have been with their employer for 26 weeks and longer can request flexible working arrangements. This means many people who need flexible arrangements in order to work- for instance those with health conditions or caring responsibilities- cannot apply for jobs.

The right to flexible working from day one would also help with supporting thousands of people who left work to get back into employment. The UK labour market is facing a participation problem where unemployment is at an historic low and there are more jobs advertised than there were people looking for work. The Office of National Statistics showed that 26% of people who have stopped working said they left due to sickness, whereas 19% of who left reported mental health for the main reason for leaving work. Allowing access to flexible work could help with retention and supporting people back to work and for this to be most effective, we need flexibility from day one.

Commitments to tackle structural inequalities in the labour market

Labour’s strategy sets out a welcome ambition to tackle structural inequalities in the labour market through re-introducing a focus on socio-economic background within the Equality Act, which may provide an effective route to tackling discrimination to workers on low incomes and individuals from working class backgrounds.

In addition, Labour plans to extend employer requirements on pay gap reporting. Currently employers in the private or voluntary sectors with 250 or more employees are required to publish data on their gender pay gap annually. Labour plans to extend this to outsourced workers, and introduce reports on ethnicity and disability pay gaps.

Pay gap reporting has delivered a modest impact in highlighting disparities in pay, progression and use of part-time working arrangements within organisations and sectors, and increasing scrutiny on and support for employers looking to address them. However, with no regulatory incentives to act on pay gaps, and no consequences for failure to report or for reporting inaccurate information, the impact of reporting on sectors and employers where disparities are greatest has been limited.

More than a third of women working in the UK (37%) are employed part-time. While this might be a positive choice for some, for many it is essential to manage childcare responsibilities due to high costs and limited availability of local childcare provision. So, it’s positive that Labour has committed to expand childcare, with welcome recognition of workforce challenges within the sector and a plan for investment in training. More detail will be needed to understand the types of provision in scope, whether this will be means tested, and how workers within the sector could be supported to access training.

The strategy also commits to reviewing shared parental leave and introducing paid family and carer’s leave and a right to bereavement leave.

Expanding childcare provision and rebalancing leave entitlements will be crucial to give mothers meaningful choices about whether they work and their working pattern.

The plan also sets out an ambition to tackle ageism and harassment at work, and to “ensure rights are enforced and upheld”. Over the coming months, we’ll be looking for detail on how these proposals would align with existing plans to consolidate employment enforcement in the UK in to a Single Enforcement Body.

Positive directions on social security reform but more detail is needed

Labour plans to reform the social security system with a focus on dignity, and to develop employment support services with local Government, NHS trusts and the third sector.

Our recent research, Room to Grow, exposed the limitations of our welfare system in supporting people to access training opportunities. We found that many people who are on Universal Credit (UC) would like to access training but struggle due to requirements to prepare or look for work. We would like to see the UC system allow anyone receiving benefits to study part or full-time.

While the principles underpinning these ideas signal a welcome shift in approach, reforming the social security system is a huge and ambitious task and we need far more detail in the run-up to the election on how plans will be developed in consultation with people on low incomes and employers.

The Labour Party’s announcements this week represent welcome ambitions to improve working conditions, employment support and social security in the UK. Over the coming months, more in-depth proposals on enforcing rights and protections and reforming social security will be expected as we come closer to the election.

We look forward to working actively with all political parties to ensure that improving working life in the UK is a priority within public debates ahead of the next general election.

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