Working Families briefing on the new coalition government plans

Working Families briefing on the new coalition government plans

20 May 2010

1          Workplace culture

The right to request flexible working will be extended to all employees is a promise in the Coalition’s programme for government announced on 20 May 2010.  This was one of Working Families’ key manifesto calls, and we are delighted that the consultation with business will be on “how best” to extend the right.  Many of our employer members already offer the right to request to all their employees and reap the benefits.

The new programme also promises to “work to limit the application of the Working Time Directive in the United Kingdom”.  Working Families will monitor this carefully, having supported the Working Time Directive as protecting vulnerable workers from long hours which can result in time poverty for families. 

Finally, there may be an opportunity to consider these changes in the round with a promised review of “employment and workplace laws, for employers and employees, to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive”.

Taken together, the review and the extension of flexible working rights may provide the opportunity to change working culture in the UK for good.  We will be pressing the government to introduce more family-shaped jobs and to protect families from both income and time poverty.

2          Transferable parental leave and family policy

Building on the manifesto pledges of both parties to go further than the plans for Additional Paternity Leave and Pay, the new government promises to “encourage shared parenting from the earliest stages of pregnancy – including the promotion of a system of flexible parental leave”.  Working Families is keen to see an independent right for fathers to have an extended period of leave and we await further details.  We hope that the shared parenting “from the earliest stages” will open the way to a right for fathers to have paid time off to attend antenatal appointments. 

The coalition supports free nursery care for pre-school children, to be provided by a diverse range of providers, with a greater gender balance in the early years workforce.  Sure Start will be refocused on the neediest families and 4,200 extra Sure Start health visitors will be provided.

The goal of ending child poverty in the UK by 2020 is maintained.  Funding for relationship support will be put on a stable, long-term footing.  There will be a comprehensive review of family law to increase the use of mediation and provide greater access rights to non-resident parents and grandparents.

The Conservatives’ promised married-couples’ allowance remains, but Liberal Democrat MPs will be allowed to abstain when it comes before Parliament.   The Institute for Fiscal Studies commented that this policy will affect only about a third of married couples, only 35% of the families who benefit will have children, and there will be no benefit to the lowest income families.

3          Welfare Reform and benefit changes

The administration of tax credits will be reformed to reduce overpayment and fraud.   The government promises to investigate “how to simplify the benefit system in order to improve incentives to work”.   Working Families welcomes both these proposals and had called for simpler tax credits and benefits in its manifesto demands.

The government promises to replace current welfare to work programmes with a single welfare to work programme for all unemployed people.   There will be no change in direction on conditionality with the receipt of benefits for those able to work to be conditional on their willingness to work.    All claimants currently on incapacity benefit will be reassessed and moved onto Jobseeker’s Allowance if they are assessed as fully capable for work. 

While a single welfare to work programme has the advantage of reducing complexity, this may be at the cost of responsiveness.  Significant concessions have been granted to parents in the current welfare reforms including allowing single parents to limit their job searches to school hours.  Not all job seekers have the same ability to work – many parents and carers are constrained in the hours they can work so a “willingness to work” needs to allow for a “willingness to work part time”.  We remain concerned that making welfare benefits for parents conditional on accepting job offers may have a detrimental impact on children and will not meet child poverty targets.

Arrangements will be introduced to “protect those on low incomes from the effect of public sector pay constraint and other spending constraints”. Plans to reduce the couple penalty in the tax credit system will be brought forward “as we make savings from our welfare reform plans”.

A new Work for Yourself programme will help unemployed entrepreneurs by providing access to business mentors and start-up loans.  Work Clubs will help unemployed people share skills and access advice.

Spending on the Child Trust Fund and tax credits for higher earners will be reduced.  No details are yet available as to the cut off points for these areas.

There is little data about the effectiveness of the Child Trust Fund (as it has only been running since 2002, beneficiaries have yet to reach 18) but we do know that low income families find it very difficult to save.   We hope that families with disabled children are also included in the Coalition’s plans as they were in the Conservative manifesto. 

Reducing tax credits requires closer examination, and should be measured alongside any policies to reduce child care costs.  Reducing the tax credits of modest income earners (a £50,000 family income figure was suggested in the Conservative manifesto) may mean reducing their ability to stay in work while paying the high costs of childcare.

4          Equality issues

With the Equality Act now on the statute book, the new government will turn its attention to equal pay and gender equality on boards.   We very much welcome the promises to “promote equal pay and take a range of measures to end discrimination in the workplace.”   A public sector fair pay review will consider the issue of the highest paid being no more than a 20 times multiple of the lowest in an organisation.    Whitehall internships in government departments will increase opportunities for underrepresented Black, Asian and Minority Ethnic groups.   We await more details in these areas, along with details on a welcome promise to “look to promote gender equality on the boards of listed companies”.

5          Pensions and older workers

The coalition agreement promises that pensions will be raised by the higher of earnings, prices or 2.5% from April 2011.  The default retirement age will be phased out.  Working Families welcomes both the state pension guarantee and an end to the default retirement age

6          Social care and carers

A new commission on long term care is to report within a year.  Direct payments will be extended to carers and improved access to respite care is promised.  Access to Work for disabled people will be reformed “so disabled people can apply for jobs with funding already secured for any adaptations and equipment they will need. “