Public Policy News

08 May 2013

On Wednesday 8 May, marking this year’s state opening of Parliament, the Queen delivered her annual Queen’s Speech setting out the Government’s legislative agenda for the 2013/14 Parliamentary term.

The Queen’s Speech contained several Bills of significant interest to the CIPD.

Pensions Bill

The Pensions Bill, continued from the last parliamentary session, intends to reform the pension system by introducing a single-tier pension, replacing the basic State Pension and means-tested additional State Pension.

We support the introduction of a new single-tier pension, which could encourage more workers to contribute to private pension schemes by making the standard of living they can expect from the state pension much clearer to see. 

However, we are unsure about the benefits of linking increases in the state pension age to longevity.  Workers from poorer backgrounds typically start work earlier and thus make contributions for longer, yet have a shorter life expectancy than better-paid workers, meaning that deprived areas could be hit disproportionately by this change.

• See our comments on the Government’s proposals to reform the state pension

National Insurance Contributions (NICs) Bill

The NICs Bill, announced in the 2013 Budget, intends to reduce the costs of employment, support small businesses and address tax avoidance. The Bill includes a new Employment Allowance worth £2,000 for every business taking on new employees, measures to strengthen legislation to prevent the use of offshore employment payroll companies, and an extension of the General Anti-Abuse Rule to NICs.

We welcome measures designed to remove some of the barriers employers face when it comes to taking on new people.  Our research amongst employers shows that smaller employers in particular can face difficulties when it comes to finance, with skills shortages also high on the list.  As the 'engine of the economy', we hope this will go some way to encouraging smaller employers to take the important step of recruiting and boost our economy.

Deregulation Bill

Since the Government was formed in 2010, there has been a focus on reducing the 'burden of regulation' on business and the economy, with the Government championing its Red Tape Challenge. The Deregulation Bill aims to build on this precedent and includes measures to reduce and remove burdens on businesses, civil society, public bodies and the taxpayer; exempts the self-employed from health and safety laws, and removes the power of Employment Tribunals to make wider recommendations in successful discrimination cases under the Equality Act 2010.

29 April 2013

A new report unveiled at CIPD’s HRD conference highlights the growing need for employers take sensible, practical steps to ensure that their recruitment practices are more youth-friendly.

The report Employers are from Mars, young people are from Venus: addressing the young people/jobs mismatch, has found that many young people are currently being disadvantaged by organisations’ recruitment practices. There is a demonstrable mismatch between employers’ expectations of young people during the recruitment process and young people’s understanding of what’s expected of them in order to gain employment.

Changing recruitment practices to address this mismatch is, fundamentally, not an altruistic endeavour: it’s good for business. Many employers are inadvertently reducing the size of their potential talent pool when some are struggling to recruit the skills they need. At a time of rising youth unemployment and stagnant economic growth, employers can’t afford to cut out a significant pool of potential skills through unfair recruitment practices.

Consisting of around 30 employer case studies, several focus groups with unemployed young people and a mini-survey of Jobcentre Plus advisers about their experiences of the recruitment process, the report makes several key findings:

• there is an expectation mismatch between employers and young people

• young people with limited work experience find it difficult to market themselves to employers and employers find it difficult to assess young people without experience

• job search, recruitment and interview processes are often overly complex, frustrate and de-motivate young people

• recruitment processes are lengthy and not very transparent

• there is a lack of support for young people during the education-labour market transition.

The report offers sensible, practical guidance on how employers can begin to change the recruitment practices that disadvantage young people, and forms part of our wider Learning to Work programme encouraging employer investment in young people for the benefit of business and society.

20 March 2013

On Wednesday 20 March, Chancellor George Osborne delivered his annual Budget.

Although Office for National Statistics figures released the same day indicated an increase of 131,000 in the number of people in work, economic output fell by 0.3% in the fourth quarter of 2012, the Consumer Prices Index increased to 2.8% while wages only grew by 1.4%, and Moody’s had previously downgraded the UK’s AAA credit rating.

It was against this economic backdrop that George Osborne delivered this year’s Budget “for people who aspire to work hard and get on”, quickly revealing that the Office for Budget Responsibility had halved Britain’s 2013 growth forecast from 1.2% to 0.6%. This did not come as a huge surprise to many, reflecting the challenging conditions that still exist in the UK economy and the effect of economic stagnation in the Eurozone.

The Budget included announcements on the implementation of a new flat-rate pension, tax relief to companies that encourage employees back to work after periods of sickness and, in particular, the Employment Allowance. The latter of these proposals will reduce the cost of employing new staff for small businesses by offering up to £2,000 off employer National Insurance bills, and is particularly welcomed by the CIPD.

Other headline announcements in the Budget included:

• personal Income tax allowance increased to £10,000 by 2014 – a year earlier than planned

• a reduction in Corporation Tax from 21% to 20% in 2015

• public sector pay increases limited to 1%

• cap on social care costs confirmed at £72,000.
  

20 March 2013

The Office for National Statistics (ONS) has published the most recent Labour Market Statistics for the period covering November 2012 to January 2013. The ONS stats highlighted that, during this time, the employment rate for 16-64 year olds increased by 0.3% to 71.5%, a rise of 1.1% on the previous year. The overall number of people aged 16 and over in employment has also increased by 131,000 to 29.73 million.

However, although overall unemployment was down 136,000 year on year, between November 2012 and January 2013 the number of unemployed people actually increased by 7,000 to 2.52 million. More alarming was the decline in the number of 16-24 year olds in employment – down 30,000 from August to October, alongside a rise in youth unemployment of 48,000.

The CIPD has consistently highlighted the need for successive governments to focus on achieving higher levels of youth employment so that young people aren’t denied the opportunity to succeed in the today’s labour market. Young people must have targeted, tailored careers advice and guidance in schools, an awareness of all available routes to work including apprenticeships, and be equipped with the skills and knowledge that they need to progress in the world of work, while employers need to grow their organisations.

12 March 2013

During National Apprenticeship Week 2013 the CIPD, in collaboration with the Education and Employers Taskforce, held an event to explore and challenge obstacles surrounding the uptake of apprenticeships.

The event built on recent CIPD research contained in the latest Employee Outlook: Focus on Apprenticeships survey of over 400 working parents, as part of the CIPD’s Learning to work initiative. The research showed that although 47% of parents would recommend apprenticeships to their children, only 9% would rank them as their preferred option if given the choice. At the same time, 48% of parents would recommend apprenticeships for other people’s children.
                                                                                                                                                                                                                                                    
Parents have the ability to greatly influence the future career paths of their children, however only 18% think apprenticeships now have the same status as a university education. It is vital that we challenge such perceptions; apprenticeships enable employers to develop their own talent, engage the local community, increase youth employment, with evidence highlighting that they lead to a more motivated, productive and loyal workforce.

The survey also made it clear that schools need to do more to provide both children and parents with enough information about alternative routes to employment: only 15% of parents either agreed or strongly agreed that schools adequately informed them of alternatives to university education. The perception also exists that apprenticeships are more appropriate for manual/blue collar jobs, with only 26% of parents disagreeing. Clearly more needs to be done to educate teachers, parents and young people of the diverse array of apprenticeships on offer: from apprenticeships in business, administration and law, to arts, media and publishing.

Apprenticeships are an excellent way to create a skilled workforce and give young people, from the age of 16, the opportunity to start earning a wage whilst they learn and develop their own skills. Available are Intermediate, Advanced and Higher apprenticeships - a degree equivalent, all of which are arguably more useful than many degree courses in today’s labour market: young people can gain a combination of on-the-job experience, a wage to live on and a tailored, recognised qualification.

We believe that employers must play a central role in challenging the perceptions highlighted in the Employee Outlook by supporting apprenticeships; enabling young people to make the most of their potential and businesses to develop their workforce.

07 February 2013

Earlier this week the Minister for Employment Relations and Consumer Affairs, Jo Swinson MP, announced the long-awaited Children and Families Bill. The Bill included, amongst other things, provisions to reform childcare and extend flexible working practices for maternity/paternity leave. The CIPD welcomes the Bill as we have played a leading role in championing flexible working and the benefits it can bring to both employees and employers.

Flexible working practices have demonstrable advantages when implemented properly for organisations and their employees and should be promoted to all organisations; best highlighted in the CIPD report Flexible working: provision and uptake, flexible working can help employees achieve a better work-life balance, can encourage diversity and increase workforce retention, productivity, motivation and engagement. However, 54% of employees cite that operational pressures and cultural barriers (30%) are currently preventing the improvement and expansion of flexible working practices in many organisations.

The Government needs to do its utmost to promote best practice in the workplace to tackle the existing obstacles to flexible working, and ensure that guidance and advice is available to organisations so that they can make the best decisions around their flexible working provisions.

04 February 2013

In November 2012 the Deputy Prime Minister, Nick Clegg announced the Government’s intention to go ahead with plans to reform the current system of maternity, paternity and adoption leave and pay to ensure the law better supports families juggling work and family life, and the businesses that employ them. 

On 4 February 2013 the Government announced the introduction of these changes in the Children and Families Bill. They will allow fathers to play a greater role in raising their child, help mothers to return to work at a time that’s right for them, and create more flexible workplaces to boost the economy.

In summary, the package includes:

Flexible parental leave and pay

• New right to unpaid time off for dads to attend up to two antenatal appointments.

• Maternity leave and pay remains unchanged: up to 52 weeks’ maternity leave and 39 weeks’ statutory maternity pay or maternity allowance.

• Additional paternity leave is to be abolished.

• Working couples will be able to share leave and pay remaining when a woman ends her maternity leave or a person ends their adoption leave.  The amount of pay or allowance available will be equivalent to the amount of untaken maternity pay,  maternity allowance or adoption pay, which could be up to 50 weeks of leave and 37 weeks of pay. Each parent will need to qualify for leave and pay in their own right.

• Statutory adoption leave to become a 'day one' right: the 26 weeks’ continuous employment requirement will be abolished. Eligible adopters will also be able to take flexible parental leave.

• Statutory adoption pay is to mirror maternity pay and be enhanced for first six weeks to 90% of an adopter’s average earnings.

• Intended parents in surrogacy cases who qualify for a Parental Order will become eligible for time off for up to two ante-natal appointments, statutory adoption leave and pay, if eligible, flexible parental leave and pay.

• A separate system of unpaid parental leave (as now) for parents of children up to the age of 18. The proposal is to change the current system in two ways: first, to increase the age limit of the child whose parents may qualify for the leave from 5 to 18 years so the parents have more choice when to take it and the burden is spread over a longer period to assist employers; and second, to implement the new Parental Leave Directive, leave will be increased from 13 weeks per parent per child to 18 weeks.

• The Government will consult business fully on how to make the administration of the new system will be as light-touch and straightforward as possible.

Extending flexible working to all employees

• This will include enabling agency workers and individuals with the new employee owner status to make a request for flexible working on return from parental leave.

• Replacing the current statutory process with a duty on employers to consider requests in a reasonable manner.

• Guidance for employers on what is considered ‘reasonable’ in a statutory code of practice being prepared by Acas.

• A consultation on the code of practice early in 2013.

24 January 2013

Recent figures announced by the Office for National Statistics show that unemployment has fallen by 37,000 to 2.49million between September and November 2012 – a decrease of 185,000 compared to last year’s figures. Employment also increased to 29.68 million, an increase of 90,000 compared with June – August 2012. Although the figures highlight that the country is on track to reach 30million people in employment by 2015, the continued rise of youth unemployment is an ongoing worry.

The number of unemployed young people has risen by 1,000 to 957,000, making the unemployment rate for 16-24 year olds 20.5%. The Government needs to ensure that it puts continued emphasis on increasing youth employment or risk leaving an indelible mark on the life chances of many young people. The CIPD is playing a leading role in making sure young people are equipped for the world of work through the Learning to work initiative, however policymakers, as well as businesses, must make sure that today’s young people can gain the best available advice, guidance and access to a diverse range of employment opportunities to equip them for the future. 

29 December 2012

With unemployment falling at the fastest rate in a decade between August and October last year, the CIPD’s Chief Economist, Mark Beatson, states that further increases in employment are likely for 2013. 

The CIPD’s annual HR ‘barometer’ report highlighted that despite a challenging year, Britain’s labour market has proven buoyant, with unemployment falling to 2.51 million and employment rising by 40,000 between August and October 2012. This provides a paradox to the Office for Budget Responsibility’s most recent economic growth forecast which, alongside the Chancellor’s Autumn Statement, revised down previous UK growth estimates made in March from 0.8% to -0.1% in 2012.

The apparent disconnect between poor economic performance and strong private sector jobs creation has been difficult to explain, although the report concludes that ‘labour hoarding’ may be partially responsible. A previous CIPD Labour Market Outlook report, highlighted that almost a third of employers have retained staffing levels greater than their organisational output has demanded, with 62% doing so to preserve their existing skills base. Mark Beatson also suggests that below-inflation wages have made it easier for employers to retain staff, alongside increases in labour supply and job search activity, which combine to offer a partial explanation of the ‘jobs enigma’.

The barometer report also points to future jobs growth, and emphasises that the Office for Budget Responsibility may be being overly pessimistic in its outlook of future predicted employment levels;  the CIPD expects 30 million people in employment prior to the 2015 general election.

06 December 2012

On Wednesday 5 December, Chancellor George Osborne delivered his Autumn Statement to the nation.  The Autumn Statement is one of two occasions per year (the other being the annual Budget) when the Chancellor outlines the Government’s spending plans in the context of the public finances and economic forecasts.  Alongside the Autumn Statement, the Office for Budget Responsibility (OBR) published its updated forecasts for growth and borrowing.

This year’s Autumn Statement contained mixed news.  The OBR downgraded the UK’s economic growth forecasts for every year up to 2017, meaning that the Government is likely to miss its stated target to reduce the ratio of debt to UK GDP by 2015 – this target has been extended by a year to 2016.  The OBR also forecast that unemployment would peak at 8.3% in 2013, rather than at 8.7% this year, as was previously predicted in the Budget back in March.

However, the Chancellor also announced an extra £90m of investment for new pilots to encourage employers to take greater ownership of training programmes, in order to ensure they are meeting their future business needs.  The basic State Pension is also due to rise by 2.5% as of next year, to £110.15 per week.

05 December 2012

On Tuesday 4 December, CIPD Diversity and Inclusion Adviser, Dianah Worman, gave evidence to the House of Lords Committee on Public Service and Demographic Change on employment and retirement.  The session covered issues such as the appetite for working amongst older workers, barriers to work and the role of employers in making it easier for older workers to work past retirement.

CIPD research has shown that many older workers plan to work past state retirement age – not just for financial reasons, but also for the chances to continue developing skills and for social interaction.  Many employers operated without a Default Retirement Age long before it was legally abolished, but there still remain barriers to enabling older workers to continue their working lives.  We encourage employers to see the UK’s ageing population as an opportunity to harness talent, rather than a difficulty to overcome.  Our recent guidance on Managing a healthy ageing workforce helps employers to respond to the challenges and opportunities of an older working population.

10 October 2012

The CIPD rounded off a successful party conference season by holding a private roundtable event on education to work transitions at this year’s Conservative Party Conference.  The event focused on the respective roles of employers and the education system in preparing young people for work and enabling them to gain a foothold in the labour market.  Peter Cheese, CIPD Chief Executive, spoke on the panel alongside Harriett Baldwin MP, PPS to Employment Minister Mark Hoban MP.  Katerina Rudiger and Jo Fox of BSkyB also spoke at the event, which was chaired by Brian Groom, UK Business and Employment Editor at The Financial Times.

04 October 2012

The CIPD team has concluded another successful round of activity at this year’s Labour Party Conference.  As at the Liberal Democrats Conference, we ran an event focusing on young people’s transitions from education into work.  Business case or charity case: Why should employers recruit young people, explored whether there was a business case for recruiting young people, reasons for recruiting and engaging with them, and how more employers can be encouraged to do so.  The event drew heavily on the CIPD’s recent report looking into the case for employing young people.  Katerina Rudiger, CIPD Skills Adviser, spoke on the panel alongside Barry Sheerman MP, who chairs the Labour Party’s School to Work Commission, and Jo Fox, Director of Future Talent at BSkyB.  Nicola Smith, Head of Economics and Social Affairs at the TUC, chaired the event.

In addition, we held meetings with Ian Murray MP, Shadow Minister for Employment Relations, and Iain Wright MP, Shadow Competitiveness and Enterprise Minister.  With Ian Murray, we discussed the Government’s new Enterprise and Regulatory Reform Bill, particularly proposals relating to Settlement Agreements, as well as other developments on the employment relations agenda.  With Iain Wright, we discussed our Learning to Work campaign and how to achieve sustainable organisation performance in SMEs.

27 September 2012

This year, the CIPD attended all three party political conferences, at each conference running an event drawing on a different angle of our Learning to Work campaign.  Our Liberal Democrat fringe event, Apprenticeships: The route to future growth and competitiveness, was run in conjunction with BAA Airports.  The event explored the dual role of apprenticeships in fostering economic growth and job creation, whilst offering opportunities for young people from all backgrounds.  Dean Royles, Chair of the CIPD Board, spoke on the panel alongside Stephen Lloyd MP, a member of the parliamentary Work and Pensions Select Committee and Clare Harbord, Corporate Affairs Director at BAA.  Mark Pack, Co-Editor of the popular Lib Dem Voice blog, chaired the event.

03 July 2012

On 3 July, Employment Relations, Consumer and Postal Affairs Minister Norman Lamb gave the keynote speech at our annual Employment Law Conference.  The Minister spoke about the important role the Government has to play in ensuring that UK employment law runs as flexibly and effectively as possible, maintaining the balance of safeguarding workers’ rights whilst giving employers the confidence to create new jobs.  He singled out Employment Tribunals as a particular area the Government is seeking to reform, with the aim of streamlining the system to make it easier and more accessible to employers, whilst making available methods for alternative dispute resolution.  The Minister went on to speak about the value of the HR function to the business and the strong contribution it makes to the bottom line.  Elements of the Minister’s speech can be heard in our Dispute Resolution podcast.