Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on key elements of today’s Queen’s Speech to Parliament setting out the coalition government’s priorities and legislative agenda:
“The Queen may have outlined a long list of parliamentary bills but it was clear from her opening remarks that the government’s overriding priority is to meet the most important bill of all – the UK’s £156 billion budget deficit. This will overshadow whatever else the coalition government does and determine the success of several key aspects of its legislative agenda.”
Additionally, Dr Philpott responds to other key economic/workplace announcements:
National Insurance Contributions Bill:
“A freeze on National Insurance Contributions is a welcome move and good for jobs while the economic recovery remains fragile. The CIPD has campaigned against the proposed rise in employers’ National Insurance Contributions since it was first signalled by the previous government in 2008. With large scale public sector downsizing now underway, everything possible must be done to sustain and support private sector job creation.”
Welfare Reform Bill:
“A crucial test of whether the coalition government will really make a difference to the UK’s economic and social landscape, and key ground on which to assess whether ‘Big Society’ thinking has legs. We have been here before. New Labour also promised ‘tough love’ welfare reform but ultimately disappointed in delivery. With the welfare reform galacticos Iain Duncan Smith, Chris Grayling, Steve Webb and Lord David Freud at the helm at the DWP, truly radical reform is on the agenda. But progress may be hampered by public spending constraints and a weak jobs market.”
Public Bodies (Reform) Bill:
“Quangos perform a useful public policy role, but there are now far too many and even the best have grown too large. Most exhibit a tendency toward mission creep and many display the characteristics of self-serving bureaucracies, spending taxpayers’ money with only limited accountability. Their collective activities could be culled substantially without detriment to the common good.”
Annual limits on Non-EU economic migration:
“A classic example of a policy proposal with widespread popular appeal that may prove difficult to make work and in any case has an economic price tag. The existing points based managed migration system already prevents unskilled migrants from outside the EU entering the UK and restricts entry of those with certain skills. If a cap is to have an additional impact on migrant numbers it will at some point bar entry to migrants with skills that UK employers need.
“Unless the government can somehow guarantee that employers will be able to meet such need from within the UK – which is a big ask, given this country’s long standing difficulty in boosting skills and employability – the result will be some combination of higher wage costs, higher prices in the shops, and slower economic growth.
“CIPD research has shown that there is an ongoing appetite among employers for migrant labour. The government needs to consider these experiences and business needs, as part of its consultation.”
Charles Cotton, Reward Adviser, CIPD, also comments on flexible working, the gender pay gap and flexible parental leave, pensions
Flexible Working and Equal Pay:
“As the Department for BIS has correctly identified, flexible working is good for businesses, individuals and society. We have campaigned for the extension of flexible working and welcome the government’s commitment to do so in the near future.
“The CIPD also welcomes that the government is committed to reducing further the equal pay gap. We believe that the government is right when it says that the causes of the gap are complex, so there can be no simple quick fixes. What we need is a coherent approach to improving the earnings opportunities for woman that takes into account the role of education and society as well as employers. In the coming months, we will be looking forward to hearing from the government how some concrete proposals on how it intends to help women.
“While it is commendable that the government has identified parental leave as a way to improve women’s earning potential, flexible parental leave will only become a reality when there is a step-change in the reward policies of UK organisations that encourages more fathers to take their statutory rights. This is something that will only be achieved through cultural change – and legislation is emphatically not the answer. The new Government will have to think imaginatively if it is to nudge and lead this change. CIPD research shows that only 40% of organisations offer working fathers 2 weeks’ pay at or near the full rate of pay, while around a quarter (24%) offer no paid paternity leave beyond the 2-week statutory level.”
Pensions and Savings Bill:
“The restoration of the earnings link for the state basic pension is a step in the right direction of meeting the CIPD’s call for a more generous and simpler pension. However, it is likely that to be able to afford this move that the existing state pension age will have to increase sooner rather than later. The increase in the pension age also needs to be linked to the abolition of the default retirement age so that people can’t be forced out of work for no good reason before they’re eligible for a state pension.”