“If Labour gets the keys to Number 11, they’ll need to hit the ground running. They might be exhausted after the relentless campaign, but they can’t afford to rest for a second,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.
As people head to the polls to vote today (4 July, 2024), the next government is facing multiple urgent calls to action from enshrining workplace rules to support employee health to major pension reforms and improving the quality of UK PLC’s management.
The first 100 days are crucial in setting the direction of the government, “so they need to get cracking on key policy changes on day one”, Coles said.
“If the Conservatives lead the government, it will be vital to stake the claim of a newly invigorated party with a new mandate, and with plenty in the in-tray, it’s vital they don’t overlook essential opportunities.”
Tax to generate right behaviours
Coles said the next government needs to ensure tax incentives are designed to generate the right behaviours, get to grips with workplace pensions, which includes reforming auto-enrolment, and finish the work on the advice/guidance boundary, so people can get relevant support with their finances.
“Tax tinkering will always be a temptation for any government, and could become even more so if they don’t get the growth they need to avoid a squeeze on government finances towards the end of the parliament.
“However, unless it’s designed with people’s needs at the centre, it runs the risk of putting people off doing the right thing for them and their finances in the long term.”
Lost pension problem
Commenting on Labour’s pledge to review pensions, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “We can expect a further move towards consolidation of workplace schemes, and want to see more movement on the development of the Lifetime Pension. This could help solve the lost pension problem, by allowing people to keep the pension provider of their choice throughout their career. It’s a move that will do much to stoke competition in the market and help people engage with their pensions.
“The pension tax system will also need to be reviewed. Labour’s decision to step back from reintroducing the Lifetime Allowance was welcomed, but more needs to be done.”
She said that constant tinkering over the years has led to a complex system that can make it hard to plan long term.
“An overarching review needs to look at the system as a whole and make sure people are properly incentivised to save without fear of being tripped up by tax changes further down the line.
“The Conservatives haven’t pledged a review, but it would provide a vital opportunity to improve retirement outcomes for millions of people.”
Recovery and transformation at risk
The Chartered Management Institute has warned that unless the quality of UK managers is improved then any government’s plans for national recovery and transformation will be “impossible to achieve”.
In its policy paper ‘Mission Possible – A plan for a stronger managed UK’, the CMI said that the UK has failed to do enough to boost management capabilities over a long stretch of time.
“Government policy choices matter if the UK is to rapidly improve the skills of the managers in businesses, public services and both local and central government. Without stronger managers, productivity growth, public service improvement, better work conditions and the green transition will all be held back.
“That’s why CMI believes that a clear strategy for closing the management gap with other leading industrial nations is imperative – and we stand ready to work with the new government to make it a reality.”
It said there had been encouraging changes in the past five years as the pandemic ushered in a shift in working norms, numbers of management apprenticeships had increased, and Help to Grow and the Messenger Review were introduced.
“The next government won’t be at a standing start – and should embrace, rather than turn away from actions by its predecessor. These programmes, as well as private sector investment in management development, are why we are starting to see encouraging improvements in the quality of management.”
The Office for National Statistics’ 2023 Management Expectations Survey found that the median score has increased from 2020, with the biggest improvements seen in employment practices such as performance management, structured pay and promotion, and in firms without previously strong employment practice.
“Businesses with the highest management scores had significantly higher productivity, were far more likely to undertake formal management training, and far more likely to be implementing cutting-edge technology.”
