REC responds to the Conservatives manifesto 2024

Commenting on the Conservatives manifesto 2024, Kate Shoesmith, REC Deputy Chief Executive, said:

“There are commitments in this manifesto that will be encouraging for business but it will be important to understand their deliverability in light of the spending cuts implied by current policy. The success of this manifesto will depend on convincing enough employers to loosen their wallets, while they watch public sector spending tightening.”

Kate Shoesmith said:

“Whatever employers will make of the approach today, they will agree that business-as-usual is not an option because we are on track for labour and skills shortages to cost the UK economy up to £39 billion every year.

“Many sectors are short of skilled staff which makes the extension of Lifelong Learning Entitlement and Skills Bootcamps useful. No mention of the Restart scheme is a surprise – as there are examples of it delivering.

“The commitment to creating 100,000 apprenticeships every year is another plus for employers. But Apprenticeship Levy reform is what employers need. This should include reform that allows levy funding for high-quality, modular training. By our calculations, out of the one million temporary workers on assignment in the UK every day, around 960,000 workers are ineligible for apprenticeship levy funding. More broadly, a future Conservative government must fix the ladder for young people in this country and understand the urgent demand from employers is for intermediate skills.

“Retaining key tax incentives that encourage small businesses is helpful in an environment where employers have told us for months of their intention to invest in their own businesses, even if they are not doing enough of it – they just need certainty and stability.

“Shifting through the gears on national insurance cuts is helpful for workers but may grind with employers who are still dealing with rising costs. No commitment on reform of the VAT threshold will also jar.

“Much is made of successes and changes to healthcare, but Trusts and staffing firms will get anxious that there was nothing on off-framework providers in the manifesto, just a few weeks before their use was to end in NHS. We hope this offers an opportunity for continued dialogue between government and agencies rather than complacency.

“The Low Pay Commission remit is already to maintain the NLW rate at two-thirds of median hourly pay for next year. But employers will agree it is vital that equal emphasis is put on its remit to continue to monitor developments in the labour market and advising on emerging risks.”

Ends

Notes to editors:

In REC’s Overcoming Shortages report, we show exactly how much damage could be done if we don’t step up. With a 10% surge in demand for staff across the economy, and the labour market restricted by shortages, we could see a 1.2% fall in expected GDP and productivity by 2027 – costing the economy anywhere between £30 billion and £39 billion every year. This figure is just short of the entire current defence budget, or two whole Elizabeth Lines.

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.