![[UK] The Conservative Party Manifesto](http://globalpayrollassociation.com/cdn/shop/articles/bigstock-P-klimkin-B-johnson-And-W-was-174045532_1200x.jpg?v=1576602850)
So now we know that there will be a majority Conservative Party government in Westminster. So it is relevant to point out the pledges in their manifesto that will / could impact payroll and HR professionals in the years to come. This was called “Get Brexit Done, Unleash Britain’s Potential” and stretches to 64 pages. We also include our comments in each of the below sections:
Brexit
Unashamedly, the manifesto pledges to “get Brexit done” in so many places that it is impossible to mention all references. Employers and individuals are encouraged to look at the messages about Brexit, as this is coming with certainty now.
Tax
There is a general lock (referred to as a “tax guarantee”) on any increases to income tax, NICs and VAT for the duration of the Parliament.
Whilst the manifesto does not say it, for income tax, this will only apply to UK countries other than Scotland where the setting of tax rates and bands are devolved.
The new Conservative government will continue to “tackle tax evasion and reduce opportunities for aggressive tax avoidance”. Quite what reducing aggressive tax avoidance means is a guess at this stage but employers and professionals may want to consider changes may be on the way. This is coupled with the pledge to “create a single, beefed-up Anti-Tax Evasion unit in HMRC”.
National Insurance
The much-publicised National Insurance starting threshold pledge is contained on page 15 where it says “We will raise the National Insurance threshold to £9,500 next year”.
There is also the pledge that the “ambition” is to ensure that the first £12,500 is “completely free of tax”, implying that the starting point for income tax and National Insurance will be aligned in the future.
Will the starting threshold increase apply to employers as well we speculate?
On page 32 there is the pledge to “increase the Employment Allowance for small businesses”. At a time when there are possible changes from April 2020, we hope that this is a simple change
National Minimum Wage
On page 14, the manifesto says:
“In our first months, we announced an increase in the National Living Wage to two thirds of average earnings, currently forecast at £10.50 an hour, and widened its reach to everyone over 21. That means an average pay rise of £4,000 per year for four million people by 2024”
We believe that this will be an issue for many employers, especially extending the eligibility of the National Living Wage to people over 21 rather than the current threshold of 25.
Apprenticeship Levy
On page 33 there is the pledge to “improve the working of the Apprenticeship Levy”. Employers should also watch for details of the “new National Skills Fund worth £3 billion” for SMEs, all to do with high-quality education and training in the duration of the next Parliament.
We believe that any improvement to the working of the Levy must include better and clearer guidance for employers so that they can use the funds properly. Also, there must be a commitment in ensuring that there is quality training and education that fits the needs of employers.
Pensions
Although this is something that the Conservatives have already done for the 2019/20 tax year, page 10 of the manifesto pledges:
“We also want to make sure that doctors spend as much time as possible treating patients, so we will address the ‘taper problem’ in doctors’ pensions, which causes many to turn down extra shifts for fear of high tax bills. Within our first 30 days, we will hold an urgent review, working with the British Medical Association and Academy of Medical Royal Colleges to solve the problem.”
We hope that the government and the review does not forget that the tapered annual allowance is an issue in more sectors than the NHS.
We are pleased to see on page 16 that a Conservative government will review the anomaly of those people on earnings between £10,000 and £12,500 (the personal allowance) do not get pension tax benefits in net pay pension schemes. The review will look to “fix” that issue
Regarding those on the State pension, there is a pledge on page 16 to maintain the “triple lock” for pension increases as well as maintaining “other pensioner benefits”.
Employment
- Regarding immigration and migration, employers will want to watch for details of the “firmer and fairer Australian-style points-based immigration system”. There are few details on page 20 but EU freedom of movement will end and the manifesto pledges that a new system will ensure that individuals wishing to come to the UK will be decided on the skills that they have and the contribution that they can make. Employers in the NHS (England) will also want to watch for details of the “NHS Visa” that is also pledged on page 20. There is also mention of new arrivals to the UK having to make a contribution towards funding the NHS
- There will be the creation of a “single enforcement body” as recommended in the Taylor Review and a general crackdown on employers refusing to give the correct employment rights (page 39). There will also be an initiative to ensure “workers have the right to request a more predictable contract and other reasonable protections”. We anticipate that these will apply in Great Britain only, as employment law is devolved to Northern Ireland
- There is a pledge on page 39 to make flexible working a default employment right
- Page 39 also pledges to “allow parents to take extended leave for neonatal care” and “make it easier for fathers to take paternity leave”. Again, watch out for these statutory rights which will probably not apply UK-wide
- Regarding carers, the manifesto pledges on pages 12 and 39 that the new government will “extend the entitlement to leave for unpaid carers, the majority of whom are women, to one week”. Does this mean the creation of a new statutory entitlement and, if so, will this apply UK-wide?
- Regarding teachers, the manifesto pledges on page 13 that the best teachers will be attracted to the profession by “raising teachers’ starting salaries to £30,000”. This will apply in England only
- Regarding the disability employment gap, there is a simple statement on page 17 that the Conservative government will “reduce” it. There are no further details on what this means for employers.
- Regarding childcare issues, the manifesto says that it recognises that the costs are too high for many working families. So it pledges on pages 15 and 39 that a new £1 billion fund will create “more high quality, affordable childcare” before and after school and during the school holidays
- Regarding the Universal Credit, the manifesto says on page 17 that the Conservative manifesto will continue with the roll-out of this system and “do more to make sure that Universal Credit works for the most vulnerable. We will also end the benefit freeze, while making sure it pays to work more hours”. There is also a pledge to “support” the main carers in the household receiving Universal Credit. Payroll professionals should by now realise that the workings of the Universal Credit is dependant on the success of Real Time Information.
The Union
So important for many people in the UK, the manifesto pledges on page 3 to “defend and protect our United Kingdom - the awesome foursome that make up the most successful political partnership in history”. Page 42 also talks about “levelling up all parts of the United Kingdom”.
With the Scottish National Party having achieved gains in Scotland, we see this as a challenge for this Parliament as Scotland are already declaring that the result gives them a mandate to request a second independence referendum. This is something that Westminster has to agree to and something the Conservatives have indicated they will not.
Pages 44 to 48 talk about “Standing up for Northern Ireland”, “Delivering for Scotland” and “Investing in Wales” and are worth reading.
The Queen’s Speech
It had already been announced that should the Conservatives win then a Queen’s Speech will be delivered on the 19th of December 2019. We look forward to seeing how or if this differs from the speech that was given only a couple of months ago.
A budget
Mr Johnson’s first priority he says is to “get Brexit done”. By this he is referring to the 31st of January 2020 deadline. Then he has said that he will hold a budget that the payroll profession desperately needs
The manifesto pledges on page 7 that it will “prioritise the environment”.
For Individuals
There are many pledges in the manifesto and it is worth reading. Two that we noticed on page 28 are:
- “the biggest ever pothole-filling programme” and
- “We intend to bring full fibre and gigabit-capable broadband to every home and business across the UK by 2025”
So now we know that there will be a majority Conservative Party government in Westminster. So it is relevant to point out the pledges in their manifesto that will / could impact payroll and HR professionals in the years to come. This was called “Get Brexit Done, Unleash Britain’s Potential” and stretches to 64 pages. We also include our comments in each of the below sections:
Brexit
Unashamedly, the manifesto pledges to “get Brexit done” in so many places that it is impossible to mention all references. Employers and individuals are encouraged to look at the messages about Brexit, as this is coming with certainty now.
Tax
There is a general lock (referred to as a “tax guarantee”) on any increases to income tax, NICs and VAT for the duration of the Parliament.
Whilst the manifesto does not say it, for income tax, this will only apply to UK countries other than Scotland where the setting of tax rates and bands are devolved.
The new Conservative government will continue to “tackle tax evasion and reduce opportunities for aggressive tax avoidance”. Quite what reducing aggressive tax avoidance means is a guess at this stage but employers and professionals may want to consider changes may be on the way. This is coupled with the pledge to “create a single, beefed-up Anti-Tax Evasion unit in HMRC”.
National Insurance
The much-publicised National Insurance starting threshold pledge is contained on page 15 where it says “We will raise the National Insurance threshold to £9,500 next year”.
There is also the pledge that the “ambition” is to ensure that the first £12,500 is “completely free of tax”, implying that the starting point for income tax and National Insurance will be aligned in the future.
Will the starting threshold increase apply to employers as well we speculate?
On page 32 there is the pledge to “increase the Employment Allowance for small businesses”. At a time when there are possible changes from April 2020, we hope that this is a simple change
National Minimum Wage
On page 14, the manifesto says:
“In our first months, we announced an increase in the National Living Wage to two thirds of average earnings, currently forecast at £10.50 an hour, and widened its reach to everyone over 21. That means an average pay rise of £4,000 per year for four million people by 2024”
We believe that this will be an issue for many employers, especially extending the eligibility of the National Living Wage to people over 21 rather than the current threshold of 25.
Apprenticeship Levy
On page 33 there is the pledge to “improve the working of the Apprenticeship Levy”. Employers should also watch for details of the “new National Skills Fund worth £3 billion” for SMEs, all to do with high-quality education and training in the duration of the next Parliament.
We believe that any improvement to the working of the Levy must include better and clearer guidance for employers so that they can use the funds properly. Also, there must be a commitment in ensuring that there is quality training and education that fits the needs of employers.
Pensions
Although this is something that the Conservatives have already done for the 2019/20 tax year, page 10 of the manifesto pledges:
“We also want to make sure that doctors spend as much time as possible treating patients, so we will address the ‘taper problem’ in doctors’ pensions, which causes many to turn down extra shifts for fear of high tax bills. Within our first 30 days, we will hold an urgent review, working with the British Medical Association and Academy of Medical Royal Colleges to solve the problem.”
We hope that the government and the review does not forget that the tapered annual allowance is an issue in more sectors than the NHS.
We are pleased to see on page 16 that a Conservative government will review the anomaly of those people on earnings between £10,000 and £12,500 (the personal allowance) do not get pension tax benefits in net pay pension schemes. The review will look to “fix” that issue
Regarding those on the State pension, there is a pledge on page 16 to maintain the “triple lock” for pension increases as well as maintaining “other pensioner benefits”.
Employment
- Regarding immigration and migration, employers will want to watch for details of the “firmer and fairer Australian-style points-based immigration system”. There are few details on page 20 but EU freedom of movement will end and the manifesto pledges that a new system will ensure that individuals wishing to come to the UK will be decided on the skills that they have and the contribution that they can make. Employers in the NHS (England) will also want to watch for details of the “NHS Visa” that is also pledged on page 20. There is also mention of new arrivals to the UK having to make a contribution towards funding the NHS
- There will be the creation of a “single enforcement body” as recommended in the Taylor Review and a general crackdown on employers refusing to give the correct employment rights (page 39). There will also be an initiative to ensure “workers have the right to request a more predictable contract and other reasonable protections”. We anticipate that these will apply in Great Britain only, as employment law is devolved to Northern Ireland
- There is a pledge on page 39 to make flexible working a default employment right
- Page 39 also pledges to “allow parents to take extended leave for neonatal care” and “make it easier for fathers to take paternity leave”. Again, watch out for these statutory rights which will probably not apply UK-wide
- Regarding carers, the manifesto pledges on pages 12 and 39 that the new government will “extend the entitlement to leave for unpaid carers, the majority of whom are women, to one week”. Does this mean the creation of a new statutory entitlement and, if so, will this apply UK-wide?
- Regarding teachers, the manifesto pledges on page 13 that the best teachers will be attracted to the profession by “raising teachers’ starting salaries to £30,000”. This will apply in England only
- Regarding the disability employment gap, there is a simple statement on page 17 that the Conservative government will “reduce” it. There are no further details on what this means for employers.
- Regarding childcare issues, the manifesto says that it recognises that the costs are too high for many working families. So it pledges on pages 15 and 39 that a new £1 billion fund will create “more high quality, affordable childcare” before and after school and during the school holidays
- Regarding the Universal Credit, the manifesto says on page 17 that the Conservative manifesto will continue with the roll-out of this system and “do more to make sure that Universal Credit works for the most vulnerable. We will also end the benefit freeze, while making sure it pays to work more hours”. There is also a pledge to “support” the main carers in the household receiving Universal Credit. Payroll professionals should by now realise that the workings of the Universal Credit is dependant on the success of Real Time Information.
The Union
So important for many people in the UK, the manifesto pledges on page 3 to “defend and protect our United Kingdom - the awesome foursome that make up the most successful political partnership in history”. Page 42 also talks about “levelling up all parts of the United Kingdom”.
With the Scottish National Party having achieved gains in Scotland, we see this as a challenge for this Parliament as Scotland are already declaring that the result gives them a mandate to request a second independence referendum. This is something that Westminster has to agree to and something the Conservatives have indicated they will not.
Pages 44 to 48 talk about “Standing up for Northern Ireland”, “Delivering for Scotland” and “Investing in Wales” and are worth reading.
The Queen’s Speech
It had already been announced that should the Conservatives win then a Queen’s Speech will be delivered on the 19th of December 2019. We look forward to seeing how or if this differs from the speech that was given only a couple of months ago.
A budget
Mr Johnson’s first priority he says is to “get Brexit done”. By this he is referring to the 31st of January 2020 deadline. Then he has said that he will hold a budget that the payroll profession desperately needs
The manifesto pledges on page 7 that it will “prioritise the environment”.
For Individuals
There are many pledges in the manifesto and it is worth reading. Two that we noticed on page 28 are:
- “the biggest ever pothole-filling programme” and
- “We intend to bring full fibre and gigabit-capable broadband to every home and business across the UK by 2025”
