Setting the agenda: what can we expect from the new government?

May152015

By Vicky O’Brien, REC policy advisor

Only a week in power and the new Conservative government has already announced a raft of measures that have the potential to transform the UK jobs market. Recruiters should keep an eye on the following which are likely to be included in the Queen’s Speech on May 27th

 Boosting economic growth

Many of our members will welcome the new government’s commitment to reviewing business rates to support small firms, as well as a new Enterprise Bill that will aim to cut £10 billion’s worth of regulations in the next five years.

Somewhat more controversial will be a new Employment Bill, which the new Business Secretary Sajid Javid has confirmed will include radical reform of strike law, including the lifting of restrictions on the use of agency staff to replace striking workers.

Reforming the EU

Recruiters may have to brace themselves for some market uncertainty in the run-up to an EU referendum – which could be any time from late 2016.

George Osborne has started discussions in Brussels aiming to reform the UK’s membership within the EU. We understand that his priories are:

  • Greater powers for national parliaments to block EU legislation

  • Free movement of labour, but restrictions on access to benefits by EU migrants

  • Reductions in red tape for businesses and opening up free trade with Asia and North America


As outlined in our Manifesto for Jobs, we advocate free movement of labour, and we will be pushing for the full implementation of the EU’s Agency Workers Directive to unlock the potential of the recruitment industry across Europe.

Getting people into work

There has been much talk this week of David Cameron’s new ‘Blue Collar’ Cabinet, and it’s true that tackling low pay will be a priority. The roll-out of Universal Credit will continue, and we can expect the NMW to rise to £8 an hour by 2020.

There are also plans to raise the personal tax threshold to £12,500, which would mean those on the minimum wage working less than 30 hours a week will pay no income tax at all.

The new Conservative government has also committed to creating three million more apprenticeships by 2020, as part of their broader drive to get two million more people into work by 2020. A new Jobs Bill is also likely to abolish National Insurance Contributions for apprentices under 25 years old and replace the Jobseeker’s Allowance for 18-21 year-olds with a Youth Allowance that will be time limited to six months.

 

Devolution

 

With a strong SNP presence in the House of Commons, it is likely that the new government will prioritise devolving further powers to the Scottish Parliament, including control over setting income tax rates and bands.

SNP Leader Nicola Sturgeon has made it clear that her party will be pushing for full fiscal responsibility, including full control over business taxes, employment, setting the minimum wage and total welfare spend, so we can expect a fierce battle in the coming months.

The rest of the UK won’t be left untouched by this devolution drive. We can also expect the new government to introduce:

  • A Wales Bill devolving control over transport, energy, and the environment as agreed in February’s St David’s Day agreement.
  • A Cities Devolution Bill where cities with their own elected mayor will be given control of local transport, housing, healthcare and crucially, skills funding. Councils in Greater Manchester look set to receive control of a further £2billion under this proposal. The REC has a formal partnership with the Greater Manchester Chamber of Commerce and we know the value this will bring to Manchester’s continued growth. 

Over the coming months the REC will be taking our Manifesto for Jobs to the new ministers to highlight what the UK recruitment industry needs the government to prioritise.


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