One of the most unpredictable elections in the last fifty years has had a shock outcome...and the impact will continue to resound over the next few months – and years.
Until midway through Election Day, all bets were on a hung parliament – and nobody was sure who would be in a new Coalition.
As the results of the exit polls started to come in, there was a clear swing towards a Conservative vote, and suggestions that Cameron would at least be deciding with whom he would be forming another Coalition.
Paddy Ashdown’s comment that he would eat his hat if the exit polls were correct is now famous.
Well let’s hope that Mr Ashdown’s hat is, as requested, made of marzipan.
By midday not one, but three, of the major party leaders had resigned, as the Conservative Party swept to a comprehensive majority victory.
David Cameron looked positively stunned, while Miliband, Clegg and Farage tendered their resignations in the wake of high profile seat losses such as those of Ed Balls, Vince Cable and Danny Alexander.
A country that was prepared for up to another month of party-bartering now has an all-out Conservative government.
So what does this mean for the UK workforce?
The biggest uncertainty is arguably in the pensions industry. Steve Webb has lost his seat, having guided in the pensions freedoms only a month ago. It’s unclear who the next minister will be, though everyone from Ros Altmann to Boris Johnson has been suggested. What is clear, however, is the immense challenge that Webb’s successor will be taking on.
“It’s less than two months since the pensions landscape underwent massive change and there is still much to do to ensure savers’ interests are safeguarded,” comments Joanne Segars, chief executive of the NAPF. “Whoever becomes the next Pensions Minister will face some tough challenges. We reiterate our belief that an independent commission is the best way to address the challenges ahead – giving the new Minister the benefit of independent expertise and analysis.”
However, the ramifications of the public vote go far beyond the pensions industry. The SNP have swept to an almost exclusive victory in Scotland, and the UK political map has been completely redrawn.
In Cameron’s victory speech outside 10 Downing Street Speaking in Downing Street, he said: “We will govern as a party of one nation, one United Kingdom. In the last parliament we devolved power to Scotland and Wales, and gave the people of Scotland a referendum on whether to stay inside the United Kingdom.”
“In this parliament I will stay true to my word and implement as fast as I can the devolution that all parties agreed for Wales, Scotland and Northern Ireland.”
Giving Scotland the right to set their own taxation rules in this devolvement may have far reaching consequences – meaning that employee benefits tied to tax regulations and National Insurance may well be affected.
“This could present challenges for employee benefits providers,” argues Andrew Leech, managing director of Fleet Evolution. “The system is only as sophisticated as it is due to the financial rules currently in place in the UK. And people employed by UK companies operating in both England and Scotland will cause a problem – how will they be taxed?”
It will be a worry for those employers dealing with the payroll ramifications – and may be a deciding factor for businesses choosing benefits for their employees, or even company locations.
With an EU referendum now on the cards for 2017, this devolution of tax rules may not come in for several years – but it is sure to play on employer’s minds, particularly in terms of benefits that are, for example, salary sacrificeable.
In the shorter term, employers will now be awaiting progress on workplace benefits such as Tax Free Childcare. The change promised by the Coalition for autumn 2015 – but roundly criticised by the Labour party – left the childcare industry in uncertainty and turmoil. Now employers can at least expect that TFC will surely come into force, and make plans to accommodate this in their childcare plans.
If pre-election promises are kept, the job market will also continue to improve, assuming that Cameron sticks to his vows of creating three million apprenticeships and banning those zero-hours contracts which prevent people getting work elsewhere.
And in the healthcare space, the UK should be seeing an extra £2bn put into frontline health and a further 5,000 doctors recruited – with everyone in England able to access a GP seven days a week by 2020.
The shock of the outright Tory win has left everyone – possibly even Mr Cameron himself – a little in the dark about the immediate fallout of today’s results.
“We’ll make Britain greater,” he claims. Well after today, whether it has shocked or delighted, it is entirely in Conservative hands.