The Brexit Election – What Happens Next?

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In Workforce Trends
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Flying in the face of many expectations, the Conservative win on Thursday was a significant victory for the Conservatives. Whilst there was a general expectation that the Conservatives would win, the size of the victory is notable – the Conservatives gained 47 seats so that they now have 365 seats in Parliament. This gives them a comfortable majority to pursue their Parliamentary agenda – allowing for rebellions and sickness. Labour holds 203 seats, having lost 59 seats.

The win for the Conservatives is a stronger result than any time since the 1980s. The Conservatives also made significant gains in the traditional Labour heartlands of the north of England and in particular the North East – some seats such as Tony Blair’s former constituency of Sedgefield have turned blue for the first time in nearly a century and also in the traditional Labour heartland of Blyth Valley.

Jeremy Corbyn will not contest another general election – a timetable for a new leader of the Labour Party is yet to be confirmed. Shadow Chancellor John McDonnell will step back from frontline politics. And there has been strong criticism of Corbyn’s leadership and messaging around Brexit.

So, what happens next?

The key driver for what happens next in the new Government is the Conservative manifesto. We will see a flurry of activity starting this week. The Prime Minister has said he will push on with Brexit as soon as possible – Friday’s debate on the EU Withdrawal Bill will start this off. Key timings for the process are now as follows:

  • 17 – 18 December: new Parliament opens and MPs are sworn in.
  • 19 December: Queens’ Speech to outline the legislative agenda. This is expected to focus on Brexit, crime and immigration.
  • 20 December: MPs to debate the EU Withdrawal Bill. This is expected to continue into January.
  • 31 January 2020: Deadline to leave the EU.
  • February 2020: Budget.
  • February – December 2020: EU trade negotiations.
  • 22 March 2020: Report on first 100 days of progress.
  • 31 December 2020: End of Brexit transition period.

For the UK, the key issue will be what sort of trade deal we secure by the end of 2020 – a deal that offers free trade and does not extend the transition period. However, achieving a full deal in the given timeframe is difficult – potentially needing time for several months of ratification and legal agreements. The EU is already talking about extending the transition period; the Government sees its increased majority as working in its favour to push through a deal that it wants and not extending further. In the worst-case scenario, we could still sever our ties with the EU at the end of December 2020 and revert to World Trade Organisation terms.
From a workforce perspective, the key points to be aware of are:

Brexit and immigration

  • The Conservatives are committed to an Australian style points-based scheme. The Migration Advisory Committee (MAC) are reviewing this and it is expected that there will be an update on this in Q1. There will also be a separate NHS immigration scheme.
  • There is a lack of clarity on temporary workers post-Brexit, but there is a suggestion that numbers could be reduced. The manifesto talks about fewer low skilled migrants and a focus on having a job to enter the UK.
  • ManpowerGroup and other organisations have been pushing for a two-year temporary visa and the right to switch to a permanent visa.

Labour market rules and regulations

  • The ‘Good Work’ plan agenda will continue – much of this is already underway.
  • There will be a new Single Enforcement Body taking over from the Employment and Social Innovation (EaSI) in Europe, but there are no significant changes expected in 2020.
  • Changes to employment regulations should be expected in due course.

IR35

  • IR35 is not in the manifesto, but the Chancellor did talk about a ‘review’ during the election. However, it is very likely that it will be included in the Queen’s Speech and will still be implemented.

Skills

  • There will be a review of the Apprenticeship Levy.
  • There will be an introduction of the National Skills Fund, providing workers with retraining opportunities.

Pay

  • The National Minimum Wage will be increased for everyone aged 21 or over to £10.54 by 2024.

If you have any questions about any of the changes, please get in touch and we’ll get the relevant person to get back to you.