What the general election could mean for jobs in the UK

Tom BelgerFinance and policy reporter

The upcoming election could have a significant impact on employment in the UK.

The main parties have set out a wide range of policies affecting the world of work, from Labour pushing a four-day week to the Conservatives promising to cut workers’ national insurance bills.

But the fate of many current and future jobs in Britain hangs heavily on Brexit, with different parties’ approaches likely to have long-lasting consequences for the future of the economy.

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Here are what two of the most plausible election results could mean for jobs in Britain after voters go to the polls on 12 December.

Conservative majority—fears for jobs under a hard Brexit

Different election results could mean different outcomes for Brexit, the economy and jobs. Photo: PA
Different election results could mean different outcomes for Brexit, the economy and jobs. Photo: PA

The Conservatives have enjoyed a significant poll lead, and a significant majority should allow prime minister Boris Johnson to get his Brexit withdrawal bill through parliament.

But economists warn the kind of hard Brexit envisaged by Johnson could threaten job losses at firms heavily reliant on EU trade or EU nationals working in the UK. Some manufacturers and farmers fear they would find it hard to survive if a sudden or significant break with Europe saw the EU slap heavy taxes on British exports, from cars to cheese.

Economists have warned Johnson’s desire to deviate from European rules could see EU trade barriers wipe £70bn ($90.5bn) off long-term growth, outweighing benefits from other global trade deals.

READ MORE: Boris Johnson’s Brexit deal would wipe ‘£70bn off GDP’

Johnson has also signalled he will use Brexit to limit EU nationals’ free movement to the UK. Bosses in certain sectors, such as hospitality, agriculture, food processing and health and social care, fear the supply of EU labour they have come to rely on could dry up if immigration rules were tightened.

It could see some firms raise prices to offer higher wages and invest more in training unemployed British workers. Some say they would struggle to stay afloat.

New regulatory and trade barriers could also deter investment in new UK jobs, with firms choosing to expand within the EU instead. But the Conservatives say ‘getting Brexit done’ in January will support jobs by reducing uncertainty, and their manifesto promises:

Hung parliament—softer or no Brexit but other job fears under Labour

Labour leader Jeremy Corbyn. Photo: Steve Taylor/SOPA Images/LightRocket via Getty Images
Labour leader Jeremy Corbyn. Photo: Steve Taylor/SOPA Images/LightRocket via Getty Images

A hung parliament—when no party has a majority—means uncertainty worsens further as the parties work out who can form a government or even back a second referendum.

This may deter investment in new jobs or technology that could boost efficiency and fund pay rises, though official employment rates have reached near record highs despite years of uncertainty already.

Simon French, chief economist at stockbroker Panmure Gordon, told Yahoo Finance UK Labour could then form a “second referendum-based coalition” or deal with the pro-referendum Lib Dems and SNP.

Labour promise a softer Brexit deal and then another vote. Many UK firms reliant on frictionless trade, free movement and global investment would see a Remain victory as safeguarding their workers’ jobs.

READ MORE: UK business leaders dismayed by choice between Corbyn and Johnson

They may also welcome Labour’s proposed deal if Leave won. It could make EU trade easier through a “high level of alignment” with EU rules, according to Joe Owen of the Institute for Government.

But Owen warned Britain would “likely have less influence and be more of a rule-taker,” with fears for finance jobs if EU rules disadvantaged the City.

French added that Labour “still want to cherry-pick,” and had not acknowledged jobs could be hit if it limited free movement and the EU retaliated with new trade barriers. Labour leader Jeremy Corbyn could also “end up with the same headache as May or Johnson” as prime minister, with other parties refusing to vote through their deal and prolonged uncertainty damaging business.

READ MORE: Labour denies plans would ‘crack foundations of the economy’

Many firms fear greater threats to jobs lie in Labour’s other policies. Some warn its plans for nationalisation, higher business taxes and public spending could harm the economy and put employment levels at risk. But allied parties may block its more controversial ideas.

Labour has also unveiled a long package of direct workplace reforms, including:

  • Significantly increasing trade union rights and giving workers shares in firms.

  • Immediately hiking the minimum wage and offering longer parental leave.

  • Banning zero-hour contracts and unpaid internships.

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