Our public policy news pages provide updates on evolving public policy issues, why they matter to the HR community and links to CIPD's responses to consultations. They also cover latest public policy events, meetings with ministers and our research and policy publications that have implications for people management practice.
12 December 2013
In the run-up to this year’s Autumn statement, it was indicated that the Chancellor would not announce ‘any big giveaways’. However, it was highlighted that the Office for Budget Responsibility would increase its growth forecasts for the UK economy for both 2013 and 2014 following relatively conservative original estimates. Although the expectation was of a fairly restrained budget in terms of government spending, it was trailed in the media that the Chancellor was to announce a National Insurance break for under-21 employees alongside further cuts to non-ringfenced departmental budgets and an increase in the state pension age.
In the event, the overall message was that ‘the government’s long-term economic plan has rebuilt the UK’s financial credibility’ and that the recovery is ‘gaining momentum’. However, it was also underlined that to deviate from the current path would be irresponsible and risk a long-term, responsible recovery. The need to spot debt and housing bubbles and to make ‘hard choices’ rather than ‘write blank cheques’ was also emphasised.
Labour market and economy
The Chancellor confirmed that the Office for Budget responsibility had revised its UK growth forecasts, stating that GDP growth would be 1.4% in 2013 and 2.4% in 2014. Following on from this, the OBR also stated that the rate of inflation would return to the 2.0% target in the second half of 2016.
The OBR also revised its employment forecast, highlighting that employment is expected to reach 31.2million by 2018. Unemployment is also expected to fall to 7.0% by 2015.
Skills and welfare
One of the Chancellor’s major policy announcements was the abolition of employer National Insurance contributions for under-21 year olds earning up to £813 per week (equivalent to the point at which the higher rate of tax is charged).
It was also announced that the Government would invest £10 million a year in Jobcentre Plus support for 16 and 17 year olds to help them find apprenticeships and traineeships, alongside a pilot requiring young Jobseeker’s Allowance claimants without level 2 qualifications in English and Maths to undertake 16 hours of training per week alongside job-searching.
There will also be a cap on overall welfare spending. The cap will not include the basic State Pension or Jobseeker’s Allowance.
Pay and pensions
The Chancellor pledged to increase the basic State Pension by £2.95 per week, and told Parliament that the State Pension age will increase to 68 in the mid 2030s, increasing to 69 by the 2040s. Furthermore, current pensioners and those who reach State Pension age before the introduction of the new single-tier pension will have the option to top-up their Additional State Pension through a new class of voluntary National Insurance contributions.
View the CIPD's response to the Autumn Statement
11 November 2013
We are pleased to announce the creation of Policy at work, the CIPD’s public policy blog, providing expert commentary on issues relating to the changing nature of work, the workforce and workplace.
Written by expert advisers in the CIPD’s Public Policy team, Policy at work aims to tackle a variety of issues ranging from pay and reward, youth unemployment and diversity to employment law, the labour market and the changing employment landscape.
For further information, if there are any areas you would like to see us cover or if you would like to contribute to the blog, please contact David Banks
Visit the Policy at work blog
17 October 2013
In August 2013, the CIPD published early findings from research examining the use of zero hours contracts, which drew on data highlighting that there may be more employees using them than established in previous estimates.
The CIPD is continuing to carry out research into the use of zero hours contracts, exploring how and why they are used by different employers in different sectors, in order to gain a balanced and accurate understanding of this type of flexible hours arrangement.
As part of this, we are undertaking a series of case studies with employers and employees in order to inform our final research.
We greatly appreciate your time helping the CIPD to gain an accurate understanding of this type of employment contract.
05 August 2013
New research from the Chartered Institute of Personnel and Development (CIPD) suggests that up to one million people may be employed on zero-hours contracts in the UK, days after the ONS revised their own figures upwards from 200,000 to 250,000.
Our research, contained in a survey of over 1,000 employers, found that between 3-4% of UK workers may be employed on zero-hours contracts, corroborating the notion that ONS Labour Force figures have been a substantial underestimation. Interestingly, the research also found that only 14% of workers on zero-hours contracts would like to be offered more hours by their employer.
The large discrepancy between ONS and CIPD figures is partially due to those who are surveyed: the ONS Labour Force Survey asks employees about their own employment arrangements, many of whom are unaware of the type of contract they are on, whereas the CIPD surveyed employers themselves who often have a better understanding of the types of contracts offered to their employees.
There has been considerable criticism of zero-hours contracts in recent weeks; many have argued that they are exploitative, foster wage insecurity and should be banned. In some cases this may indeed be true, with 14% of workers stating that their employer often or very often fails to provide staff with the means to support a basic standard of living. However, it is also important to note that, for many people, zero-hours contracts offer the flexibility that they need to balance work and non-work responsibilities.
The CIPD is continuing to conduct research into zero-hours contracts in order to develop clear guidance on what good and bad employer practice looks like and to ensure that this type of flexible working works for both employers and employees.
If you would like any further information about the CIPD’s work in this area, please contact David Banks.
View the CIPD's latest research on zero-hours contracts
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.
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.
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.
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.
Find out about our Learning to Work initiative
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.
Read our full response to the Budget
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.
Find out more on the business case for employing young people and what we are doing in this area
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.
View the Employee outlook: focus on apprenticeships
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.
View our survey report Flexible working provision and uptake
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.
View the Department for Business Innovation & Skills (BIS) Consultation on Modern Workplaces
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.
Find out about our Learning to Work initiative
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