Eight drivers of change

Eight drivers of change: Role of the state


In an era of political uncertainty, the actions of government will drive change. Take the profound impact of Margaret Thatcher in the 1980s, whose era saw falls from a peak in trade union membership and public-sector employment alongside significant rises in unemployment and self-employment, all stemming from her policies.

More recently, we can see this illustrated by the profound changes in the US under Donald Trump’s presidency and now, in an opposite direction, that of Joe Biden. As Harold Wilson famously said: “A week is a long time in politics”.

The future direction of British politics will influence the world of work in this country, not least in the way work is organised, taxed and regulated. As the traditional left/right divide has broken down, both major UK political parties are divided. The Conservatives are trying to reconcile their traditional support amongst small state, low-tax, libertarians with the “red wall” social conservatives (often working class) on whom they relied to win the last election. Meanwhile, Labour is seeking to reconcile its traditional left-wing supporters with urban, often professional, liberals through its agenda for a new deal for working people.

Populism and green politics are becoming increasingly influential in many countries, including the UK. While there is little correlation between populist governments and employment regulation, the employment agendas advocated by green parties around the world are usually radical. Future political upheavals are impossible to predict, but the results of polling reported by the Institute of Economic Affairs suggest there is good reason to predict a leftward shift in British politics in the years ahead. A return to centre-left politics or increased green party influence, such as appears to be the case in Germany following its September 2021 elections, could see increased regulation including enhanced collective rights, greater individual protection and restrictions over atypical work. In contrast, continued Conservative governments are likely to see deregulation and pro-business employment laws. The higher proportion of green voters among younger generations may well signal a future increase in green party influence, not just in Germany but other countries too (see demographics; social trends).